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New withdrawal limits will help S’poreans make wiser decisions

SINGAPORE — Setting limits on how much can be taken out of Medisave to pay for the private-insurance portion of Integrated Shield premiums will help make it clearer and more transparent to consumers where their money is going, said Member of Parliament Chia Shi-Lu.

It will also help Singaporeans make better decisions on whether they can afford an Integrated Shield plan, added Dr Chia, who chairs the Government Parliamentary Committee for Health.

Integrated Shield policyholders may use a maximum of S$300 to S$900 from Medisave to pay for the private-insurance component of their premiums, depending on their age group, the Ministry of Health (MOH) announced yesterday. These caps are called Additional Withdrawal Limits.

Currently, Medisave withdrawal limits apply to the entire Integrated Shield premium, so people do not know how much is going towards MediShield (which will be replaced by MediShield Life at the end of the year) or the private-insurance portion, said Dr Chia.

Despite more than six in 10 Singaporeans — or about 2.4 million — having Integrated Shield plans, some confusion lingers over the relationship between Integrated Shield plans and MediShield Life, he said.

Although offered by private insurers, Integrated Shield plans are made up of MediShield/MediShield Life — a basic universal insurance scheme to protect against large hospital bills — and a private-insurance component that covers stays in B1 and A Class wards and private hospitals.

“Most Singaporeans would want to finance their premiums completely from Medisave, if possible, and have as little out-of-pocket as possible. If they know the limits they can use, it may help them make wiser decisions about what plan to choose,” said Dr Chia.

The MOH said it needed to change the approach of Medisave withdrawal limits applying to the entire Integrated Shield premium. This is because people in the same age band may be given different MediShield Life premium subsidies because of unique circumstances, such as monthly household income per person. Those with serious pre-existing conditions will also need to pay higher MediShield Life premiums for 10 years, which means their Integrated Shield premiums will differ from other policyholders in the same age band. The new limits ensure the same amount of Medisave can be used for the private-insurance component of the Integrated Shield premium by each age band, the ministry said.

This gives clarity to policyholders, it said. At the same time, having Medisave fully pay for MediShield Life premiums provides certainty to Singaporeans.

Asked if allowing those aged above 40 to use more from their Medisave for the private-insurance component of Integrated Shield plans would lead to a rush to buy such plans, MP Tin Pei Ling felt any increase would not be significant, given how MediShield Life would provide better coverage than MediShield.

“The Additional Withdrawal Limits are perhaps more helpful for those who are already on Integrated Shield and hope to continue being covered by Integrated Shield,” she said.

Health economist Phua Kai Hong of the Lee Kuan Yew School of Public Policy said while the Additional Withdrawal Limits are based on insurance claims experience, it “may not indicate real health needs or demand, but merely reflect medical practices on the supply side”.

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