Speech by Dr Lam Pin Min, Minister of State for Health, on the MediShield Life Scheme Bill, on 29 January 2015

Madam Speaker, I am happy to hear the warm support from Members for the universal coverage and protection that MediShield Life will provide to all Singaporeans.  Universal coverage is a key feature of MediShield Life and is a big step forward in providing greater assurance and coverage for all, for life, including those with pre-existing conditions.  Let me elaborate on MOH’s approach to this. 

Universal Coverage

2.     When MediShield Life is introduced at the end of this year, universal coverage for all Singaporeans will become a reality.  Under MediShield Life, insurance coverage will be extended to those who are currently uninsured, or are excluded from coverage today due to pre-existing conditions.  No Singaporean will be left out of MediShield Life.      

3.     With universal coverage, there will be higher costs for MediShield Life due to the higher expected claims from those with pre-existing conditions.  This is estimated to total $1.1 billion over the first 5 years of MediShield Life.  The MediShield Life Review Committee had recommended the following approach towards bringing in those with pre-existing conditions under MediShield Life which was accepted by the Government:

a. First, to ease the shift to MediShield Life and ensure that the premium impact is manageable for all other Singaporeans, the Government will bear the bulk of the higher costs of universal coverage, at an estimated $850 million over the next 5 years.

b. Individuals with pre-existing conditions will also bear part of the costs by paying Additional Premiums of 30% over 10 years, to reflect their higher risks.

c. Lastly, all Singaporeans will co-share a small part of the costs as part of their premiums.  This is in line with the philosophy of greater collective responsibility, and reflects each person’s contribution towards an inclusive society.

4.     This approach that we will be taking to move towards universal coverage under MediShield Life strikes a balance between shared responsibility and inclusivity, while keeping premiums manageable. 

Paying Additional Premiums

5.     Some Members, including Mr Zaqy Mohamad have asked whether the Additional Premiums of 30% over a 10 year period, for those with serious pre-existing conditions, would impose too heavy a burden on these individuals.  I would like to explain that the MediShield Life Review Committee had made their recommendation on this issue only after serious and in-depth consideration of the extensive feedback from members of the public.  The Additional Premiums strike a balance between reflecting the higher risks of those with pre-existing conditions, while at the same time avoiding placing too much financial burden on them.  In fact, to fully reflect the costs of their higher risks, individuals with serious pre-existing conditions would have to pay a lot more than 30%, if it were not for the Government bearing the bulk of these costs.  Ms Denise Phua and Ms Lee Li Lian have asked if the Additional Premiums would continue to be required after 10 years.  I wish to confirm that individuals subject to Additional Premiums will only need to pay these for 10 years, following which they will pay the same standard premiums as the rest in their age group, regardless of their health condition at that time.        

6.     Most of these individuals would not be able to purchase insurance from private insurers and would have been bearing high medical costs without any insurance protection over the past years.  With MediShield Life, they can now be covered for life and receive help with their large medical bills.  Many of them have told us how relieved they are that they can finally be protected, and that they do not mind paying the Additional Premiums for the assurance of the peace of mind for life. Likewise, A/Prof Fatimah Lateef has also shared that her patients are looking forward to MediShield Life as they can now receive help with some of their large medical bills.

7.     Let me share an example with the House. Mr Ong, 48 years old, suffers from end-stage renal disease. He does not have any insurance coverage.  Currently he pays about $700 every month for his dialysis treatment using Medisave and cash, which is a significant drain on his Medisave and cash savings.  With MediShield Life, he will be able to claim up to $1,200 per month for his dialysis treatments and related drugs, or up to $14,400 per year.  In comparison, the Additional Premiums that Mr Ong will need to pay for the year, before taking into account any Government subsidies that he is eligible for, is about $130 per year.  Mr Ong will also benefit from MediShield Life coverage should he be hospitalised in future. 

8.     For Singaporeans who need help with their MediShield Life premiums, including the Additional Premiums, they can benefit from the MediShield Life subsidies that Government will provide.  These include Transitional Subsidies for all Singapore Citizens, Pioneer Generation Subsidies and Premium Subsidies for the lower-to-middle income.  For the needy who face difficulties in paying premiums even after subsidies, the Government will provide Additional Premium Support.  

Pre-existing conditions that require Additional Premiums

9.     A few members have raised questions about which serious pre-existing conditions will require Additional Premiums.  MOH is currently reviewing the list of serious pre-existing conditions, with specialist advice from clinicians.  More details on the serious pre-existing conditions that will result in Additional Premiums will be made known at a later date.  There will also be separate notifications to individual policyholders who are required to pay the Additional Premiums.

10.     I wish to emphasise the Minister for Health’s point that we will take a fair and compassionate approach in the assessment for Additional Premiums.  Our focus would be on the more serious conditions which require intensive medical intervention to treat or manage; or have high risk of future complications or recurrence, and therefore may require prolonged treatment.  These conditions will result in much higher costs and risks to the scheme and should rightly incur Additional Premiums.

11.     We have heard concerns from members of public on whether they will be required to pay Additional Premiums even if their medical conditions are minor.  These concerns could have arisen due to their previous experiences in purchasing private insurance plans. 

12.     I would like to highlight again, that the MediShield Life approach for identifying serious pre-existing conditions will be different from, and more compassionate than the approach used by private insurance schemes.  For example, under MediShield Life, serious pre-existing conditions that may be subjected to Additional Premiums include stroke, cancer, kidney failure and heart diseases, just to name a few.  Today, Singaporeans with these conditions will not even be accepted for coverage by a private insurer.  On the other hand, less severe conditions such as pre-cancer, well-managed hypertension and diabetes with no complication, will not be subjected to Additional Premiums as they generally have no long-term treatment impact.

13.     Ms Chia Yong Yong asked if the rate of the Additional Premiums would vary according to the type of pre-existing conditions.  There is only one rate – 30% for 10 years, and this will apply to those with identified serious pre-existing conditions, so that we keep the approach simple.  Those who are assessed to be without these conditions will not need to pay the Additional Premiums. 

14.     Ms Denise Phua asked whether developmental disorders such as Down Syndrome and autism will incur Additional Premiums.  I would like to assure Ms Denise Phua that developmental disorders which do not result in higher risks of future complications or recurrence that require prolonged hospitalisation or expensive outpatient treatments will not attract Additional Premiums.  In other words, the mere existence of autism on its own is not the basis for imposing Additional Premiums.  However, if the person with autism also has a serious medical condition requiring prolonged hospitalisation or dialysis treatment, then Additional Premiums will apply  on account of the serious medical condition.

15.     With regard to A/Prof Fatimah Lateef’s question on whether HIV/AIDs patients will be covered under MediShield Life, these patients will be covered under MediShield Life, subject to the MediShield Life benefit coverage for hospitalisation and selected outpatient treatments. As with other serious pre-existing conditions, those who were diagnosed with HIV/AIDS prior to the start of their insurance coverage will have to pay Additional Premiums.

16.     I also wish to provide the strong assurance to Er Dr Lee Bee Wah that Singaporeans who are currently insured under MediShield or an Integrated Shield Plan and developed medical conditions only after their insurance coverage started, will not need to pay any Additional Premiums.  For example, if you have been covered by MediShield since you were born and developed cancer this year, you will not have to pay Additional Premiums when MediShield Life starts. 

Identifying individuals who have to pay Additional Premiums

17.     Many MPs sought clarifications on the powers to access health records and financial information of patients.  To minimise inconvenience to Singaporeans, the process of identifying individuals with pre-existing conditions will be made as convenient as possible, so that Singaporeans need not undergo separate medical assessments or produce medical records.  As shared by Minister Gan, the assessment will be carried out using existing medical information in Government administrative databases.  These databases include the ones used to process various types of claims submitted by both private and public medical institutions.  With these checks, the vast majority of Singaporeans will not have to have to step forward to undergo further health assessment or produce their own medical reports, as queried by Dr Lily Neo.  For those whose medical records will be accessed under this approach, they will not need to undertake any statutory Health Declarations.

18.     For those who feel uncomfortable with the Government accessing their medical information, they may decline access to their medical information.  More details on how to do so will be released at a later date.  However, as we will not be able to ascertain if such individuals have a pre-existing condition, therefore, to be fair to other policyholders, they will need to pay the Additional Premiums under MediShield Life.  Should they change their mind, they can either allow access to their medical information, step forward to submit the necessary documentary proof like medical reports, or submit statutory Heath Declarations, as suggested by Mr Gerald Giam, for review and assessment.  However, we also note that as highlighted by Dr Lily Neo, some individuals could find it difficult to ensure that the relevant medical information is fully and correctly reflected within the Health Declarations.    

19.     In response to Ms Chia Yong Yong’s question, for those required to pay Additional Premiums and who wish to step forward to seek a review of their health condition and Additional Premiums, for example if their health has improved significantly, do have the option to do so. These individuals may have to undergo additional checks or request for updated medical reports from their doctor.

Integrated Shield Plans

20.     Madam, I will now speak briefly about Integrated Shield Plans.

21.     About 60% of Singaporeans today purchase additional benefits and coverage through Integrated Shield Plans, or IPs, for additional benefits and coverage.  We understand that that many IP policyholders are not clear about how MediShield Life will affect them.  Some are concerned that they will need to pay “double premiums” when MediShield Life is introduced.

22.     We need to explain to IP policyholders that their Integrated Shield Plans today such as AIA HealthShield, Aviva MyShield, NTUC IncomeShield, Prudential PruShield or GE SupremeHealth, already come with a MediShield component.  An IP is made up of 2 parts – the MediShield component, run by CPF Board, and the top-up component, run by private insurers. The top-up component provides the additional benefits and coverage (e.g. for Class B1, A and private hospitals hospitalisation).  There is no duplication between MediShield and the IP top-up components today.  You do not need to pay double.  An IP policyholder pays one total premium to his private insurer, and the insurer will pass the MediShield portion of the premium to CPF Board to manage.

23.     When MediShield Life is implemented, the MediShield tier in the IP will be replaced by MediShield Life.  All IP policyholders will be covered by MediShield Life, with no duplication with their current IP coverage. They will enjoy MediShield Life coverage for life, as well as coverage for any pre-existing conditions, even if these conditions were excluded from their IP coverage.  IP policyholders will therefore have greater peace of mind, as they will continue to be fully covered by MediShield Life, even if they have exclusions on their IPs or decide to drop out from their IP plans later.

24.     A/Prof Fatimah Lateef has asked specifically about Integrated Plans and when MOH will share more details about developments in the industry arising from the Review Committee’s recommendations.  MOH is working with the insurers on various initiatives, and more details will be shared when they are ready.

25.     The Review Committee recommended that the Government allows private insurers to manage those with pre-existing conditions differently, including allowing for risk-loading.  MOH will allow the insurers to risk-load policyholders with pre-existing conditions.  We recognise that some policyholders may prefer to pay higher IP top-up premiums for the peace of mind that they are also covered for their pre-existing conditions by their IPs.  We are working with the insurers to develop an appropriate framework.  More details will be shared when they are ready.

26.     Er Dr Lee Bee Wah had a question on whether the insured have to pay for medical reports that are required for the submission of claims to the private insurance company.  Most IPs absorb costs of medical reports needed to make claims, however as the private insurers would have differing practices, we encourage Members and Public to check back with their IP providers whether there is a need to pay for medical reports.

27.     Many Singaporeans with IPs have sought our advice whether they should drop their higher coverage now that MediShield Life is available.  This is a personal decision that each of you have to make for yourselves.  However, I can offer 3 questions that can help to guide you in your decision-making: First, do you want to choose your own doctor or require an air-conditioned ward if you are hospitalised?  If so, you may wish to consider an IP.  Second, do you prefer to seek treatment at a private hospital or would a public hospital be sufficient?  This would determine the type of plan that you should buy.  The third consideration is affordability.  Are you able to afford IP premiums in the long term, as IP premiums do rise significantly with age?

Conclusion

28.     Madam, with universal MediShield Life, every citizen plays an important role in contributing to our national risk pool and benefitting from the lifelong coverage.  This will further strengthen our social safety nets, as we move towards building a more inclusive and compassionate society together. 

29.     Madam Speaker, I support the Bill.