MOH clarifies on Medisave-linked insurance schemes

12 Oct 2011, Today

Hospitalisation insurance drains Medisave

MY HUSBAND and I believe in insurance protection, and our parents, who are in their 80s, are insured by MediShield and IncomeShield. But the premiums have wiped out their Medisave and they have to pay in cash.

For an 81-year-old Singaporean, the MediShield premium for a stay in a C class ward is S$1,087 per year, while for IncomeShield it is $2,354. Our parents cannot continue to afford such premiums.

We wrote to the Ministry of Health and were told to use our Medisave to pay for the premiums. But for insured persons aged 81 and above, the withdrawal limit for premiums is S$1,150 per person. So we will eventually have to pay S$3,450 in Medisave and S$3,612 in cash annually for our parents, apart from our own premiums and those of our three children.

The total annual premium from Medisave would be S$4,823 annually or S$402 monthly, not forgetting that premium rates increase with age for me and my spouse.

Even if I were to earn S$5,000 monthly, my monthly Medisave contribution would then all go to paying premiums for hospitalisation insurance. What would be left in my Medisave account to pay for deductibles and co-payments or my own medical needs down the road?

What if one's salary cannot keep up with the rate of premium increase? What about the elderly who are unable to tap Medisave accounts of younger family members to pay for insurance premiums?

The MOH told us that it will review such issues later, during the policy review period.But these are pressing matters for the elderly as well as the sandwiched generation and not just for my family. It will be a pity if the elderly cannot afford insurance premiums and their policies get terminated when they are most needed.

We hope MOH can look at ways to solve such problems. Some scheme should be put in place to assist these elderly.

Reply From  MOH

Madam Kwok Hui Ying, in her letter "Hospitalisation insurance drains Medisave" (Oct 1), and Mr Dave Yap, in his letter "Lower premiums for MediShield can help" (Oct 4), asked about the cost and coverage of Medisave-linked insurance schemes.

We agree with them on the imperative to keep healthcare affordable and accessible to Singaporeans, especially the elderly.

Our healthcare financing framework is based on the combination of heavy subsidies in public hospitals, the 3Ms of Medisave, MediShield and Medifund, out-of-pocket payments and/or private insurance.

For most Singaporeans who opt for Class B2 and C wards in public hospitals, the built-in subsidies and use of the 3Ms often mean that they incur either very low or zero out-of-pocket payments.

This is not so if they choose other ward classes, unless they have private insurance plans that cover such hospitalisation episodes.

MediShield is a basic catastrophic illness insurance, with coverage pegged to Class B2/C bills. Premiums are actuarially determined and work on the principle of risk pooling - the more people in a certain group, the lower the premium for each individual.

The higher premium for the elderly is due primarily to two factors: Potentially higher claims (due to the complexity of their conditions) and a lower number of subscribers in this category.

Beyond basic MediShield, Singaporeans who want additional coverage, as in Mdm Kwok's case, can opt for private Integrated Shield or fully (not Medisave-linked) private insurance plans.

These cost more than MediShield because the claim limits are higher. Mdm Kwok's example of $2,354 per year in Incomeshield premiums is for an "as-charged" plan that is pegged at Class B1 rates.

Mr Yap asked why one should continue to pay for MediShield if one already has an enhanced MediShield plan with a private insurer, that is, an Integrated Shield plan. These plans are add-ons to the basic MediShield plan and are not designed to replace it.

The premium payable by the policyholder includes a basic MediShield component and a second component for the additional coverage under the enhanced plan. There is no double payment for MediShield.

Singaporeans should choose healthcare insurance that best fits their needs and budget. Integrated Shield plans offer higher coverage but come with a higher premium. Premiums for basic MediShield are more affordable.

We will work to ensure that the scheme remains sufficient to cover most Class B2/C bills. For elderly Singaporeans facing problems footing their medical bills, they can approach medical social workers at the hospitals to apply for Medifund Silver.

Recently, the Ministry of Health also rolled out initiatives to help middle- and low-income Singaporeans with their outpatient costs.

Our ministry is in touch with Mdm Kwok to further assist her with her query. We invite Mr Yap to contact us if he has any clarification regarding his premiums for his enhanced Shield plan.