MediShield must remain affordable

22 Mar 2007, The Straits Times

Question

MediShield should back Govt's stand

MEDISHIELD is the national medical insurance scheme - and that should make it difficult to justify denying coverage to unborn babies. But, despite the Ministry of Health's efforts to encourage everyone to take up medical insurance, the scheme excludes a particularly susceptible group.

Most babies are born healthy, but one in 20 is premature and needs intensive care. Of these, about 20 per cent - 400 babies a year - need to live in an incubator for one to three months, said Associate Professor Arijit Biswas of National University Hospital. Even at subsidised rates, the hospital bill will be huge. Then there are those born with congenital problems ranging from a minor cleft lip to a serious hole in the heart.

The estimated 200 children born with serious congenital problems each year here will find it impossible to buy insurance against related medical problems later in life. For instance, a child born with a serious disability such as Down's syndrome is immediately declared persona non grata by insurance firms. The likelihood of the child getting a payout is too high for a company in the business to want to take the risk. And who can blame them? They are, after all, not here to do charity.

But MediShield is different - or at least it should be. It is a not-for-profit mutual insurance scheme underwritten by the Government, and its priorities should not reflect those of private insurers. It was, after all, the principle of serving the national good that gave the Health Ministry the authority to insist that all Medisave-approved insurance schemes incorporate the basic Medi-Shield, to prevent cherry-picking of healthy people.

This same reasoning should apply to babies born with congenital problems. A national insurance scheme should provide coverage for anyone who wants it, so long as it is taken up at a time when a serious disease is not known about or expected. So, if a pregnant woman buys insurance early in her second trimester - if both mother and unborn child are healthy - there is no reason to deny them coverage.

Most developed countries have such insurance policies, as do some in the Third World, including India. It is time Singapore followed suit. Health Minister Khaw Boon Wan has often said he would like to see such an insurance policy in place. He is well placed to make this happen. Of course, the premiums might have to be higher. But since pregnancy is a one-off event with each child, most parents may be willing to pay a little more to enjoy peace of mind.

Also, as babies from older mothers face a higher risk of problems, it is perfectly reasonable to charge higher premiums for them. But the policy must guarantee that the children will continue to enjoy coverage even if they are plagued with life-long congenital problems. True, they could prove to be a drain on funds - but so, too, are poorly controlled diabetics and people who suffer from stroke or cancer. Surely that's what insurance is about - helping people who need more medical care than a healthy person.

Today, the parents of children with congenital problems struggle with huge medical bills. The really poor can draw on Medifund, but those in the middle class will not be able to turn to it for help. With Singapore's desire for more women to have children, such coverage will give couples a greater sense of security when they consider starting a family

Reply

Reply from MOH 

In "MediShield should back Government's stand" (ST, 17 Mar), Ms Salma Khalik urged MediShield to cover congenital illnesses so that such patients would have financial protection.  We share a similar objective but it has to be achieved in a way which is affordable to the masses without causing financial insolvency for MediShield. 

Unfortunately, actuarial studies suggest that premiums will have to go up significantly if MediShield is to cover congenital illnesses. This may render MediShield unaffordable to many. 

Ms Salma argued that since MediShield is "not-for-profit", it need not adhere to commercial discipline. Presumably her suggestion is that premiums need not be actuarially based. This is a dangerous argument. While MediShield is not-for-profit, it is also "not-for-loss". If premiums do not cover payouts sufficiently and MediShield becomes insolvent, how is MediShield going to fulfill its obligations to its policyholders?

Nevertheless, the problem identified by Ms Salma is real and we will continue to look for viable solutions. Meanwhile, there are currently private cash benefit plans such as the Prudential PruSmart Lady's Maternity Rider, HSBC Lady FirstCare, and NTUC i-Maternity, which parents can buy. These plans pay lump sum amounts if the baby is diagnosed with specific congenital anomalies.