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MediShield Life: Balance between enhancements and premiums

The MediShield Life Review Committee said it had carefully considered the balance between benefit enhancements and the resulting indicative premium levels.

SINGAPORE: The MediShield Life Review Committee said it had carefully considered the balance between benefit enhancements and the resulting indicative premium levels.

It said it had decided on a few key principles to guide their discussions and recommendations, such as the importance of MediShield Life as insurance to give Singaporeans peace of mind against large medical bills.

Taking that into account, the committee said it recommended that bills of up to the 90th percentile were covered, ensuring that nine in 10 Singaporeans admitted to B2 or C class wards are fully covered by MediShield Life.

Premium affordability was the other guiding principle.

More than 1,200 Singaporeans have participated in 36 dialogues and focus group discussions, held between December 2013 and May 2014, sharing what they hope to see in MediShield Life.

Another 280 participants also shared their views through email.

Several of these sessions were targeted at specific groups including voluntary welfare organisations, academics, and those from the lower income group.

Participants expressed a variety of views. These include concerns of premium affordability at old age and out-of-pocket cost even after insurance coverage.

At the same time, participants had also expressed the desire to see more benefits. Therefore, the committee said a balance had to be struck.

"Many Singaporeans know they can't have everything and there's a need to balance and to prioritise and they realise that while additional coverage in areas and additional benefits could help a smaller group of Singaporeans, fulfilling all the requests would mean premiums would have to increase significantly,” said Bobby Chin, chairman of the MediShield Life Review Committee.

“We all agreed that MediShield Life had to strike a balance… with premium affordability. We have to focus on the most meaningful enhancements that benefit Singaporeans as a whole."

The committee said one of the most intense discussions was on trade-offs in certain areas.

This includes whether to lower deductibles to improve benefits or to raise the claim limit and reduce co-insurance instead.

"Yes we realise, reducing deductibles will have a large impact on premiums. Many more bills will be claiming payouts from the fund,” said Mr Chin.

“In comparison, raising claim limits and co-insurance will benefit the largest bills where out-of-pocket payment is of greatest concern and therefore it's more critical to focus on enhancing protection on the large bills that cause Singaporeans to worry which are most difficult for us to plan and save up for."

The committee also said it had decided against the idea of a "no-claim bonus" as that would have also meant premiums would need to increase.

"You are effectively funding your own no-claim bonus, unlike motor insurance where there's a direct co-relation between the claims and behavior, and for medical insurance,” said Mr Chin.

“We also do not want to recommend or encourage people not to claim when they are ill just to entitle them to get the no-claim bonus because that's not the right thing to do because when you're sick, you go to hospital, you go to get medical attention. But having said that you want to add that in, premiums will go up."

The committee said that in its final report, it will be recommending that the government promote healthy lifestyles through other channels instead.

"We will be recommending to the government to actually promote healthy lifestyle not via the Medishield framework but through the Ministry, the Health Promotion Board,” said Mr Chin.

“That's very important because, you know, Singaporeans must live a healthy lifestyle. But we do not want to put it into the MediShield Life and therefore unnecessarily jack up the premiums."

The committee will be finalising its recommendations and premium details over the next month. 

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