SINGAPORE: Insurers that offer Integrated Shield Plans (IPs) will introduce a new product in May to give Singaporeans an option of additional coverage beyond MediShield Life, the Ministry of Health (MOH) said on Tuesday (Mar 15).
The Standard Integrated Shield Plan, a private insurance product, is targeted at Class B1, and will allow a more affordable option for who want to downgrade from Class A and private hospital IPs. MediShield Life provides coverage sufficient for services at Classes B2 and C wards.
During public engagement sessions in 2014, the MediShield Life Review Committee found that Singaporeans wanted affordable IPs, with coverage above the B2 and C class wards but at affordable premiums. There was also concern with rising IP premiums over time and they were confused about the difference in benefits for different plans.
Under the Standard IP, patients will stay in a four-bedded ward with air-conditioning and TVs. Patients will also be able to choose their own doctor and have 20 per cent subsidy.
Other Standard IP features include claim limits sized to fully cover nine out of 10 public hospitals' Class B1 bills, coverage for hospital stays and selected outpatient treatments and co-payment features of claim limits, deductible and co-insurance.
Dr Chia Shi-Lu says the Standard Integrated Shield Plan provides more transparency for the health insurance industry, but an expert says it does not address rising healthcare costs. http://bit.ly/1Udwy7rPosted by Channel NewsAsia Singapore on Tuesday, 15 March 2016
MOH said it will review the Standard IP from time to time to ensure that the benefits remain relevant to policyholders.
PREMIUMS TO VARY FOR STANDARD IP
Although benefits of the Standard IP are identical across all IP insurers, premiums will vary across insurers based on their pricing approach. Premiums, including the MediShield Life component, can differ by as much as S$1,862 a year.
The insurers are AIA Singapore, Aviva, Great Eastern Life, NTUC Income and Prudential Assurance, said the Life Insurance Association Singapore (LIA).
All insurers have committed to keeping the additional private insurance component of the Standard IP premium fixed for the first two years from launch.
On average, premiums for Standard IP, including the premiums for the MediShield Life component, will be:
- Approximately S$245 a year for policyholders aged 21-25
- Approximately S$377 a year for policyholders aged 36-40
- Approximately S$768 a year for policyholders aged 56-60
LIA cites various factors that influence how insurers price their products and may choose to raise premiums over time.
"The new standard plan has identical benefits. However, there are slight variances in the premiums charged by the different insurers," said Ms Pauline Lim, executive director of LIA. "The reason for this is that every insurer has to consider its own estimation going forward of the claims experienced of the portfolio, the profile of their customers, and their companies' own risk assessment and risk appetite and commercial considerations as well."
A check shows Great Eastern Life offers the cheapest premiums for the Standard IP compared to the other insurers.
The Health Ministry said Medisave can be used to fully pay for all insurers' Standard IP premiums up to the next birthday age of 75 years.
MORE AFFORDABLE PREMIUMS
Currently, there are four non-Standard IPs that offer coverage for Class B1 wards on the market.
Compared to these, the Standard IP tends to have more affordable premiums, mainly due to differences in benefits.
The Standard IP will not cover pre- and post-hospitalisation treatments, which are outpatient services related to the condition that the individual was hospitalised for. Non-Standard IPs cover such treatment for up to 120 days before and after hospitalisation.
Insurance coverage under the Standard IP will also be offered on a non-as-charged basis, which imposes claim limits on a treatment. Overall, for the full policy year, the Standard IP will have a claim limit of S$150,000, while non-Standard IPs allow policyholders to claim up to S$250,000.
"In considering the design of the Standard IP, we had to balance between the affordability of the premiums and the benefits offered," said Ms Lim. "If you have very sophisticated comprehensive benefits, benefits need to be costed and charged, reflected in the premiums. So the Standard IP is very focused in maintaining and finding this balance."
LIA said the Standard IP will likely appeal to two groups of consumers - those looking for affordable additional coverage on top of MediShield Life, and those who want to downgrade from more expensive plans.
Policyholders on these plans will be given the option to switch to the Standard IP without additional medical underwriting. The same goes for Singaporeans with Class A or private hospital IPs.
However, policyholders who switch to another insurer will need to undergo underwriting. Insurers are allowed to assess, approve with or without exclusions based on their own risk assessment frameworks.
This also applies to policyholders who only have MediShield Life. Exclusions may be applied to those with pre-existing conditions if they do not have an IP or switch insurers.
For example, if a patient with a pre-existing knee-related condition applies for the Standard IP, the insurer will provide coverage, except for knee-related conditions. If he is hospitalised for a knee injury, he will be covered under the benefits he receives from MediShield Life. However, there will be no payout by his additional private insurance coverage of the Standard IP.
The Standard IP premiums will be higher than MediShield Life premiums but more affordable than Class A and private hospital IP premiums.
For example, for those aged 36 to 40, policyholders will pay between S$358 and S$398 for a Standard IP. Compared to S$310 for MediShield Life, without subsidies, and more than S$400 for Class A and private hospital policyholders.
The Health Ministry said Singaporeans should carefully consider their preferences and affordability of premiums over the longer term, as IP premiums may increase significantly with age. They should also bear in mind that existing medical conditions that are covered under their current plan may not be covered if they switch to a new plan.