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MediShield Life Review committee: how to make IPs work better

The MediShield Life Review Committee has proposed changes to make Integrated Shield Plans or IPs work better. Among them, allowing private IP insurers to charge higher premiums for those with pre-existing conditions.

SINGAPORE: The MediShield Life Review Committee has proposed changes to make Integrated Shield Plans or IPs work better.

Among them, allowing private IP insurers to risk load - or charge higher premiums - for those with pre-existing conditions as well as to develop key features for a standard Integrated Shield Plan targeting at Class B1 ward.

The committee says its terms of reference do not cover a review of IP, but it has studied IP-related issues in some detail in view of significant public interest.

Today, six in ten Singaporeans are covered by Integrated Shield Plans.

An IP is made up of two components - the basic MediShield Plan - which would transition to the MediShield Life in the future - and a top-up portion which is managed by private insurers.

The MediShield component will help with large bills at the basic Class B2 or C level in public hospitals.

But with the top-up, policyholders get additional coverage for Class A and B1 in public hospitals or in private hospitals.

Currently, five private insurers offer a variety of Medisave-approved IPs.

They are NTUC Income, AIA Singapore, Great Eastern Life Assurance, Aviva and Prudential Assurance.

Bobby Chin, Chairman of MediShield Life Review Committee, said: "There were many concerns raised by Singaporeans about premium affordability of Integrated Shield Plans and the confusion over the varying benefits offered by the five insurers.

"The committee has recommended to the government to work with the insurance industry to develop key features for standardised Integrated Shield Plan focused on providing coverage for the Class B1 level."

As of last year, about 21% of the total 2.34 million IP policyholders are on B1 plans.

In response, the government said it will work with private insurers to review the landscape and features of IPs, including developing a standard IP with B1 coverage.

The committee has suggested that the premiums for the standard plan form the basis for setting Medisave Withdrawal Limits, an approach that will enable older policyholders to withdraw more Medisave to pay for their IP premiums.

The committee has also proposed that private IP insurers be allowed to charge higher premiums for insurance coverage of those with pre-existing conditions.

Currently, those with pre-existing conditions are either unable to buy medical insurance of have limited coverage due to exclusions.

The Health Ministry said Singaporeans who are currently on IPs will not be disadvantaged with the introduction of MediShield Life.

And the resulting overall increase for IP premiums "is expected to be the same, if not lower than the increase in MediShield Life premiums."

Another recommendation is for the government to consider improvements to the regulatory framework for IPs and IP insurers.

For example, setting clearer guidelines in the selling and renewing of the plans as well as enhancing responsible selling requirements.

There is also a need to step up public education efforts on healthcare finance and the concept of health insurance.

This has to start from insurance buyers asking themselves which hospital ward they want to go to, said Hauw Soo Hoon, chairman of Integrated Plan Sub-Committee, MediShield Life Review Committee.

"We have seen from statistics that even though they have bought a certain plan, when they actually go to a hospital, they go to a lower ward. So the right buying, buying at the right level wasn't present," she said.

The committee also asked the government to consider measures to manage rising healthcare costs by encouraging healthy living and working with healthcare providers and insurers to manage price inflation.

The suggestions include encouraging Singaporeans to take part in health screening programmes, developing new services to reduce reliance on hospital-based care as well as more widespread use of cost-effective and proven treatments and use of generics drugs where available.

The committee also called on employers and unions to work together to reduce duplication of coverage between employer medical benefits and MediShield Life.

On employer medical benefits, the committee has suggested that the government strengthen incentives for companies which provide portable medical benefits that ride on MediShield Life for their workers.

For instance, by improving corporate tax incentives or providing grants. 

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