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MediShield Life Review Committee proposes standard integrated plan

SINGAPORE – Private insurers may have to offer a more streamlined and standardised Integrated Shield Plan (IP) targeted for treatment at B1 wards if the MediShield Life Review Committee has its way.

Comparison of current MediShield and integrated Shield plan premiums

Comparison of current MediShield and integrated Shield plan premiums

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SINGAPORE – Private insurers may have to offer a more streamlined and standardised Integrated Shield Plan (IP) targeted for treatment at B1 wards if the MediShield Life Review Committee has its way.

It has recommended that the Government work with the insurance industry to do so and allow private insurers to offer risk-loaded policies to those with pre-existing conditions, among other recommendations made in its final report issued yesterday.

Introduced in 2005, IPs comprise the basic MediShield scheme and a top-up portion that provides enhanced coverage for B1 and A-class wards in public or private hospitals.

The propose “standardised, affordable and easily understood” IP should be provided as an option to new and existing IP policyholders, including those who want to downgrade, the committee said. The Government will set the benefits, and the plan should be cheaper than those targeted for treatment at private hospitals.

Mrs Hauw Soo Hoon, chairman of the integrated plan sub-committee, said: “By recommending this, the policyholders now have a way to evaluate what they have currently and, if they want to have B1 coverage, it’ll be easier to make that decision …

“It’s easier for them to understand what they’re buying into. At the moment, you might not know what all the bells and whistles mean.”

About 60 per cent of Singaporeans have bought IPs, but there is a lack of understanding around benefits and the premium structure, said Mrs Hauw. Up to 70 per cent of IP holders who have been previously hospitalised opted to stay in wards of lower classes, while only about 10 per cent chose to go to a private hospital, the report showed. Many IP policyholders have also complained that they found out about exclusions for pre-existing conditions only when they were unable to make a claim upon hospitalisation.

The premiums for the proposed standard IP should form the basis for setting Medisave withdrawal limits for IPs, the committee said. While a rise in IP premiums due to the introduction of MediShield Life has been a cause of concern among policyholders, the Ministry of Health has reiterated that the overall increase in premiums resulting from this is expected to be the same as, if not lower than, the rise in MediShield Life premiums.

The committee also recommended that the existing regulatory and accountability framework for IPs be improved.

Healthcare policy expert Phua Kai Hong of the Lee Kuan Yew School of Public Policy noted that all developed countries, “including our Asian competitors, have developed regulatory and pricing controls for universal health insurance”.

“Even private insurance and healthcare industries share data and conform on rules regarding pricing and approved lists of drugs/technologies,” he said.

“Singapore’s private health insurance is relatively unregulated and should gear itself up for further public controls in the future.”

The Life Insurance Association of Singapore (LIA) — which represents the five IP providers — AIA, Great Eastern, Prudential, Aviva and NTUC — said the involved insurers are “aligned” on the recommendations and that consumers can expect limited impact on their IP premiums once MediShield Life kicks in.

“We would like to assure policyholders that there will be minimal impact on the top-up portion of your IP and issuers will also continue to monitor and manage the impact of medical inflation to ensure IPs remain competitively priced,” said LIA president Khoo Kah Siang, who is also the chief executive of Great Eastern Singapore.

However, it remains to be seen how private insurers would price and design their products, PwC’s insurance partner Woo Shea Leen said.

“One big uncertainty is how they will deal with pre-existing conditions. They may also have to worry about greater selling costs because they need to have more people on the ground to explain and sell these products, which are certainly quite complex and not well understood by consumers,” she added.

However, the recommendations are a step in the right direction, she said, adding: “They will open up the market a bit more, allowing insurers to tap consumers with pre-existing conditions. The introduction of the Standard Integrated Plan will also provide more options and address a gap between basic and premier insurance.”

The Singapore National Employers Federation called the recommendations a “major breakthrough” that would help more employers restructure their medical benefits into portable schemes.

Consumers TODAY spoke to appeared unconcerned about uncertainties surrounding the IPs.

Ms Chris Lim, a 31-year-old accountant, bought an integrated plan in 2006 and pays S$341 a year in premiums.

“I will definitely hold on to my plan — which paid for my $20,000 key-hole surgery at a private hospital last year,” she said. “The premium might increase, but it’ll be worth the money.”

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medishield life

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