REMARKS BY MR ONG YE KUNG, MINISTER FOR HEALTH AND COORDINATING MINISTER FOR SOCIAL POLICIES, AT DOORSTOP INTERVIEW ON INTEGRATED SHIELD PLAN RIDER CHANGES

1.               I thought to give an update on the Integrated Shield Plan (IP) rider policy changes that we announced earlier, about two weeks ago. Since then, I think the public reaction largely has shown a lot of appreciation and understanding. Of course, there were also a lot of questions. We appreciate those questions and I thought today I will spend some time addressing some of the questions that I have received – some from the public, some from forum letters, and some from colleagues and friends – which I think are more commonly still in people’s minds.

2.               Number one, one reaction I heard, is that some will say, “No, all these policies should not affect those of us who go to public hospital for subsidised healthcare”. I totally agree. This is why this policy on IP rider changes affect only new policyholders who basically need IP riders to go to private healthcare. It actually does not affect public subsidised hospital healthcare.

3.               There is a second question, which is “why target us insurers and target our policyholders as patients?” I totally agree as well. This is an issue that is caused by the natural behaviour and responses of every party, which is why we need to take a holistic approach. Running up to this policy change, we have done quite a few things:

               a.     We strengthened MediShield Life through a major review.

               b.     We strengthened many segments of public healthcare subsidies.

               c.      We started to introduce hospital benchmarks as well as professional fees benchmarks to regulate, or to instil more discipline among private healthcare providers and doctors.

               d.     We started taking some enforcement actions on that small proportion of doctors and surgeons who have submitted inappropriate claims.

               e.     But I think we cannot run away from the last piece of the jigsaw puzzle, which is that insurance also plays a part, and therefore we are making these changes to new IP rider policies.

4.               Then thirdly, there is another piece of feedback – and this is the more frequent feedback you hear – with more co-payment and higher deductibles, would it lead to more private healthcare patients moving to public healthcare, causing long queues and longer waiting times? I totally agree as well. In fact, this is one of the key motivations why we are making this policy change. Because in private healthcare, hospital bills are going up so fast and premiums are going up so fast. Every year, we are already seeing 100,000 people who supposedly bought IP riders to use private healthcare, they find that they cannot afford the premiums anymore, so they either cancel their IP riders or downgrade. And these 100,000 people will potentially shift over to subsidised public healthcare. It is something that is already happening and may be happening at an increasing pace. We need to address this, which is why we are introducing this policy to moderate private healthcare cost escalation and premium escalation. This hopefully persuades people to downgrade their rider to something more affordable with 30% reduction in premiums, and maybe they can hold on to it and stay with private healthcare.

5.               In the short term, certain procedures, some cited things like colonoscopies, may shift over to public healthcare, but it will only affect new policyholders. It should be a small number. We will monitor the situation closely, and if need be, we will take the appropriate measures to manage the increase in workload. But I think what we are doing is for the long term, to address this issue so that we do not have a big and continued influx of private patients coming into public healthcare. As it is, public healthcare runs 80% of the hospital beds in Singapore, catering to 90% of the patients. I think we need to address this.

6.               Finally, individuals have always come to me to say “So after all these policy changes, do I give up or downgrade my riders?” I will say the key response is to talk to your financial advisors. If your financial advisor sits you down and says, “Buy everything for absolute peace of mind”, do not take that as the answer. Tell your financial advisor, “Do your work. Break down for me what are exactly the policies you are selling me. For each policy, what is the premium and what am I covered for?” Make sure you break down and understand which policies you should keep, which one you may not need to keep, and which one you can downgrade. The chances are, you will discover for IP riders, it is the most expensive, with premiums of about $10,000 if you are late 60s or 70s, but it covers actually a small proportion of your hospital bill. So most likely you may find it is not worth it and that is when you may want to downgrade.