MediShield Life duplication: MOH replies

MOH's Reply

The Straits Times, 5 March 2015

MediShield Life duplication: MOH replies

MR WONG Boon Hong felt that there is an overlap between MediShield Life and the additional private insurance coverage (top-up portion) by third-party insurers ("Insurers should complement, not compete with, MediShield Life"; Forum Online, Feb 11).

Integrated Shield Plans (IPs) consist of a basic MediShield tier - which will be replaced by MediShield Life - and additional private insurance coverage.

The design of IPs to integrate with MediShield is to avoid duplicate coverage. Mr Wong is right in saying that MediShield Life will take on a larger share of IP payouts compared with MediShield, due to the enhancement in MediShield Life claim limits.

We have asked the IP insurers to take this into account in setting their premiums, in addition to other considerations, such as the claims experience of their plans.

However, MediShield Life coverage remains sized for subsidised (B2 or C class) wards, where patients' bills are subsidised by up to 80 per cent.

In comparison, IPs are sized for Class B1 or A wards in the public or private hospitals, where there is minimal or no subsidy. Hence, even though MediShield Life limits are higher, the additional private insurance coverage helps to cover the higher bills at Class B1 or A wards or private hospitals.

The additional standard 30 per cent for MediShield Life coverage of pre-existing conditions is a nominal sum that does not reflect the true and much higher cost of such coverage.

To support this, the Government will be contributing the bulk of the cost of universal MediShield Life coverage.
Requiring all IP insurers to provide similar coverage for private plans would likely require very much higher premiums for all IP policyholders.

Transitional subsidies will apply to the difference in net premiums between MediShield and MediShield Life.

What this means is, in the first year of MediShield Life, citizens will pay only 10 per cent of the premium increase that they would otherwise have had to pay. This means that citizens who are fully insured under MediShield today will pay $3 more per month, but with significantly enhanced benefits under MediShield Life.

IP policyholders who are Singapore citizens will receive transitional subsidies automatically for the MediShield Life portion of their plans.

Lim Bee Khim (Ms)
Director
Corporate Communications
Ministry of Health

Forum Letter

The Straits Times, 11 February 2015

Insurers should complement, not compete with, MediShield Life

ALTHOUGH the Health Ministry has stated that there is no duplication between MediShield or MediShield Life and the Integrated Shield Plan, there is clearly a huge overlap between MediShield Life and the current top-up portion by third-party insurers ("No health-plan duplication: MOH"; Jan 30).

From the consumer's perspective, MediShield Life is acting like a top-up portion of MediShield.

While it is fair to pay increased premiums for increased coverage of MediShield Life, there should be a reduction in the top-up premium from third-party insurers to account for the coverage that overlaps with MediShield Life.

If not, those who already have 100 per cent coverage by the top-up portion will end up paying more but without any added benefits. This will encourage policyholders to drop their top-up portion to retain the affordability of their health-care policies.

Switching policies is out of the question for those who are no longer in the pink of health as pre-existing conditions will no longer be covered.

Premiums and coverage have to be adjusted so the top-up portion complements rather than competes with MediShield Life.

A good way to do this is to increase the coverage to cover pre-existing conditions, with a similar 30 per cent increment in top-up premiums.

With regard to the transitional subsidies for the first four years, is the full cost of the MediShield Life premium covered or just the price difference from the MediShield premium? Will third-party insurers take this into consideration when billing us?

I hope the Ministry of Health and third-party insurers can come up with a more complementary top-up portion for the new MediShield Life.

Wong Boon Hong