How come only one insurer provides guarantee letter?

30 Aug 2006, The Straits Times

Question

Name of the Person: Tan Siew Ko (Ms)

How come only one insurer provides guarantee letter?

IN 'NEW benchmarks to boost Shield insurers' standards' (The Business Times, Aug 16), it was stated that only NTUC Income provides a letter of guarantee to restructured hospitals and institutions whereas all the other insurers - AIA, Aviva, GE and Prudential - do not. According to the article, this letter of guarantee is an assurance of payment provided by an insurer to a hospital with regard to the portion of a hospital bill covered by insurance. And with the letter, patients need to pay a smaller amount upfront for their hospitalisation and hence reduce the financial burden on them. Without the guarantee, patients would have to pay their total hospitalisation bill upfront before claiming from the insurers of the Medisave-approved plans as the plans are on a reimbursement basis. As it is clear that a letter of guarantee will benefit policyholders of the Medisave-approved plans, why is NTUC Income the only company that is providing this letter? As all the Medisave-approved plans are overseen by the Ministry of Health, the ministry should establish some standard basic guidelines for the private insurers. The private insurers can still have 'healthy' (no pun intended) competition with regard to price and coverage but basic requirements, such as providing a letter of guarantee, the guarantee on premiums and claims return rate, should be standardised across the different insurers.

Reply

Reply from MOH 

More data to help consumers choose better insurer 

In her letter "How come only one insurer provides guarantee letter?"(ST, 30 Aug), Ms Tan Siew Ko suggested that all the Medisave-approved insurers be made to provide letters of guarantee. 

The Ministry of Health ensures that Medisave-approved insurance plans follow a basic set of guidelines. Thus, insurers have to guarantee that Medisave-approved policies are renewable and incorporate minimum deductibles and co-payment rates. This set of compulsory guidelines is carefully selected as additional requirements on insurers may cause premiums to increase. 

That said, we recognise that the letter of guarantee and faster assessment of claims can reduce the financial burden on patients. This is why we encourage the development of an open and competitive insurance industry with good service standards. The Ministry will continue to publish service indicators on our website, so that consumers can make better-informed choices