TODAYonline

Insurers, time to sweeten the deal

Neo Chai Chin

chaichin@mediacorp.com.sg

EVEN as increased MediShield premiums and payouts kick in on Dec 1, at least three insurance companies have already proposed changes to their MediShield-integrated health insurance plans. This, as the Life Insurance Association (LIA) yesterday urged insurers to increase the plans’ benefits.

A Ministry of Health (MOH) spokesperson said NTUC Income, AIA and Prudential Assurance have submitted changes to their existing plans in recent months. Insurers that wish to market new Medisave-linked health insurance plans or vary existing ones need to get approval from the MOH.

The pricing of premiums is, however, up to insurers, the spokesperson added.

Five firms — AIA, Aviva, Great Eastern Life Assurance, NTUC Income and Prudential — currently offer Medisave-approved private health insurance. The LIA encouraged them to increase their benefits “in tandem with the enhanced coverage offered by MediShield”.

This would ensure thatpolicyholders continue to enjoy sufficient protection against rising healthcare costs, said LIA president Darren Thomson. But enhanced benefits would probably entail higher premiums.

“Such an increase in benefits is likely to lead to higher premiums as insurers will have to keep their plans sustainable while accommodating higher claim costs,” he said.

The association will leave premium adjustments to individual insurers.

The two remaining insurers — Aviva and Great Eastern — told Today that they will be reviewing their Medisave-approved plans.

Aviva said it would absorb the increase in MediShield premiums before its ongoing MyShield review is completed. Great Eastern’s assistant vice-president for corporate communications Margaret Lim said a review of its SupremeHealth plan — with almost 200,000 policyholders — would be done early next year.

Madam Halimah Yacob, chairman of the Government Parliamentary Committee for Health, said increased benefits, especially for more costly procedures, would be welcome.

Insurers wanting to go beyond MediShield’s coverage could also consider covering mental and pre-existing illnesses, she suggested. Mental illness entails recurrent costs, while people with pre-existing conditions “will increase with an ageing population”.

But even as such changes would help in healthcare coverage, because of the higher premiums they would entail, timing could be an issue.

“Any increase in the current climate will be viewed with a lot of concern, because people are already worried about their jobs, whether they are going to get any wage increase or pay cuts. We don’t want people to fall out of the coverage,” said Mdm Halimah.

Mr Leong Sze Hian, president of the Society of Financial Service Professionals, estimates that the increase should not be more than a few per cent, given the economic downturn.

He told Today that many of the private plans’ claim limits are already “very high”, and insurers should, instead, widen the scope of coverage to include more day surgery and pre- and post-hospitalisation treatments.

“While benefits have gone up, the scope of the coverage has narrowed over the years. If you don’t fall within the scope of coverage, you can’t claim anything at all,” he said.

The MOH announced in April that annual MediShield premiums will go up between $3 and $487 from Dec 1. They would go towards higher payouts for B2 and C hospital ward charges, some surgical procedures and outpatient treatments.

For example, daily claim limits for normal wards will increase from $250 to $450, while daily claim limits for intensive care wards will go up from $500 to $900.