MediShield Life premiums set separately from private insurance premiums

MOH's Reply

The Straits Times, 7 July 2018

MediShield Life premiums set separately from private insurance premiums

We thank Ms Christie Loh for her letter (Clearer picture of IP premiums needed; June 27).

MediShield Life is a basic, not-for-profit scheme that covers all Singaporeans.

Payouts are based on the cost of subsidised bills in Class B2/C wards. The premiums are set by the Ministry of Health (MOH) and the scheme is managed by the Central Provident Fund (CPF) Board. 

To keep the premiums affordable, the Government provides permanent premium subsidies for the lower- to middle-income and additional premium support for the needy.

In addition, the Government has provided transitional subsidies for the first four years of MediShield Life (until 2019) to help Singaporeans transition into MediShield Life.

Integrated Shield Plans (IPs), on the other hand are offered by private insurers. 

IPs comprise a MediShield Life component and an additional private insurance component managed by private insurers.

The private insurance component provides higher coverage, such as to cover Class A/B1 wards and private hospitals.

This component is optional and is not subsidised by the Government. The recent reports on insurers’ financial accounts are in relation to this private insurance component of the IPs.

Premiums of IPs are set, reviewed and adjusted by private insurers.

For the convenience of policyholders and to ensure that there is no duplication in cover, the private insurers administer the IPs as an integrated plan with MediShield Life, even though both components are managed in separate funds.

Singaporeans should carefully consider if they require the coverage offered by IPs, and the higher premiums associated with it.

Health insurance premiums tend to increase with the age of the policyholder, and also with increased claims incidence.

MOH recently introduced co-payment requirements for new IP riders, to encourage prudent use of healthcare services among patients, and more measured treatment and charging decisions among doctors.

The Health Ministry has also encouraged insurers to develop panel and pre-authorisation arrangements, which will also help to control costs. 

All stakeholders – healthcare professionals and providers, insurers and policyholders, employers, patients and caregivers, and the Government – have a part to play in keeping healthcare costs affordable and sustainable for all Singaporeans. 

Lim Siok Peng (Ms)
Director, Corporate Communications
Ministry of Health

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Forum Letter

The Straits Times, 27 June 2018

Clearer picture of IP premiums needed

I refer to the report (IP insurers' losses raise possibility of premium hikes; June 25).

Back in 2015, when MediShield Life was launched with great fanfare, I was greatly alarmed that it was going to lead to incessant premium hikes.

While MediShield Life was a praiseworthy social achievement in that many who were previously uninsured were roped in, it was manifestly unfair to those of us who had paid for Integrated Shield Plans (IPs) for many years.

The promised government subsidies did not placate me as they were good for only the first few years, while I would be paying premiums for the rest of my life.

Given that this is a matter of great concern to all Singaporeans, it is critical that the complete picture be reported and tracked.

For instance, why report on only the losses for 2016 and last year?

Why not the profitable 10 years before that?

How much surplus has been accumulated?

Is the imminent hike warranted, or a case of jumping the gun or, worse, blatant profiteering? Policyholders are really at the mercy of insurers.

The least that can be done is more transparency and some help from the press to explain the numbers as few of us can competently crunch the data on the Monetary Authority of Singapore website.

Christie Loh (Ms)