Higher premium option won't work

17 Mar 2011, The Straits Times

Question

Name of the Person: Tan Kin Lian

Remove uncertain component of means testing in MediShield use

MANY elderly people opt to be insured under basic MediShield to cover their medical expenses at an affordable premium ('Stumped by low MediShield payout' by Ms Goh Poh Kheng; yesterday). They accept treatment in a subsidised ward and must pay the deductible and co-insurance of 20 per cent from their Medisave accounts.

They should not be subject to the further uncertainty caused by the pro-ration of the bill due to means testing.

The Ministry of Health should allow patients to pay a slightly higher premium to be excluded from this pro-ration formula. This will allow for greater transparency and give them more certainty on the coverage under basic MediShield.

Many people are now advised to transfer to a private Shield plan to obtain higher coverage. However, the premium for such a plan can be much costlier and the co-payments, in the event of a claim, can also be higher.

This will be outside the financial means of many elderly patients, who need to conserve their Medisave for their old-age needs. Private Shield plans should be only for those who are well-off.

I hope the ministry will consider making basic MediShield the default plan for the large number of seniors who cannot afford to use their Medisave for higher insurance premiums and co-payments.

Reply

Name of the Person: Julie Sim (Ms)

Deputy Director, Corporate Communications

Ministry of Health 

THERE are practical difficulties to Mr Tan Kin Lian's suggestion ('Remove uncertain component of means testing in MediShield use'; March 8) which advocates getting policyholders to 'pay a slightly higher premium to be excluded from (being subjected to) this pro-ration formula'.

First, policyholders may not agree to the higher premium. Second, whether the premium will really be only 'slightly higher' will depend on the take-up rate of this proposed variation in MediShield policy.

In fact, as pointed out by Mr Tan, the current system is already designed to provide this variation through private integrated Shield plans. Those who are well-off and will face means testing can purchase these plans to protect against this uncertainty.

Under our current approach, all policyholders of the same age band and gender pay the same premiums and receive the same MediShield payouts for identical hospitalisation treatment. This is achieved through pro-rating. It is the fairest approach.

If there is no pro-rating, the few patients who receive lower subsidies due to their higher income would end up getting higher MediShield payouts. The extra payouts would then be funded by the majority of the subsidised patients who are less well-off.