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MediShield Life may trigger cancellations for Integrated Shield Plans: Analyst

A health analyst says the proposed claims benefits in the new MediShield Life may prompt many Singaporeans to terminate their existing Integrated Shield Plans.

SINGAPORE: In the last five years, some two million Integrated Shield Plans (IPs) were sold. IPs are health insurance plans offered by private insurers that are integrated with basic MediShield plans. Many buy these private plans because they want additional benefits if they get admitted to a hospital. For instance, if they want their coverage to extend to Class A and B1 wards in public hospitals or private hospitalisation.

However, with the unveiling of recommendations for higher claims for MediShield Life on Thursday (June 5), one analyst says this puts a question mark on IPs.

Said Associate Professor Phua Kai Hong, an expert on health policy and management from the Lee Kuan Yew School of Public Policy: "The big question we still have is -- come end of 2015, when the MediShield Life scheme comes in (and) which will cater for the majority -- what will happen to those people who already bought the current plans? 

"So that is subject to the renewal. In other words, when the plans which are at the end of their term, within this one year, then it is up to the private insurance companies to offer new products and services. They could add frills and give more than this basic MediShield plan, so we don't know how the market is going to respond." 

He also cautioned that IP premiums increase with age. And when Singaporeans retire, they will face difficulties paying for them if they do not enough savings. 

"This MediShield Life plan, that the Government has already guaranteed that "for life we are going to cover you and we will cover you through the basic care and that's good enough". 

"If you want to carry on with your Integrated Shield Plan, be aware that your premiums are going to be raised more and you may not be allowed to use more of your Medisave to buy these plans. This means that you have to have the disposable income (to cover it)."

Currently, people can use Medisave to pay the premiums for private Medisave-approved plans. For those aged 65 and below, they can withdraw S$800 from their Medisave per policy each year. This amount goes up to S$1,000 for those aged 66 to 75, to S$1,200 for those aged 76 to 80, and to S$1,400 for those who are 81 and above. 

The premium amounts for MediShield Life are still being finalised and will be released later this month. While the Life Insurance Association that represents the five insurers offering Integrated Shield Plans has said that there will be minimal impact on the private insurance premiums component of Integrated Shield plans, observers Channel NewsAsia spoke to said premiums for such plans are likely to go up. And if the Medisave withdrawal limits remain unchanged, many will end up paying more out of their pockets.

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