MOH asks AIA not to reduce payouts to policyholders

AIA to review cases where benefits shrink after policyholders switch plan

By Salma Khalik, The Straits Times, 16 Dec 2013

THE Ministry of Health (MOH) has asked insurer AIA not to reduce the payout to policyholders when they switch to a different plan. Its response comes after The Straits Times alerted MOH about the affected policyholders.

A spokesman for MOH said it has directed AIA to review cases "where policyholders have seen their coverage compromised" to ensure that they meet the regulations and conditions of Integrated Shield Plans. These are medical insurance plans whose premiums can be paid for with Medisave.

AIA told The Straits Times that fewer than 20 people are affected.

One of them is Madam Esther Sim, who has been going for dialysis treatments since March last year. Her original medical insurance plan helped pay for 90 per cent of her treatment cost.

But last year, AIA told her that her plan would be discontinued and she would be moved to the AIA HealthShield Gold Max B, which has better benefits. Her premiums would go up by about $300 a year to $1,119. She felt she had no choice but to go along.

Then, to her shock, she found out the new policy covers only 70 per cent of the cost of her dialysis treatments, which she does at a private centre near her home. As a result, the amount she has to top up in cash has more than tripled.

The new policy allows full claims for public institutions, but 70 per cent for private centres. Her original policy did not discriminate between the two.

The housewife, who is in her 60s and married to a part-time taxi driver, said she was willing to pay the higher premiums, but not when she gets reduced benefits. Because she will need dialysis for the rest of her life, she appealed to AIA, only to be advised to seek treatment at a public dialysis centre. When she asked for the reinstatement of the previous policy, AIA said it was not possible.

In response to queries from The Straits Times, AIA said its new plan "has new and additional benefits, aligned with the enhanced MediShield scheme on larger bills and prolonged illnesses. For outpatient treatments, we recognise that a small group of policyholders may receive a lower payout".

But following the intervention by MOH, AIA says that it has "reviewed and enhanced" the new plan so that "policyholders in the similar situation as Madam Esther Sim receive equitable coverage for outpatient renal dialysis treatment in a private hospital or private medical institution".

MOH said: "MOH understands that AIA is now in the process of revising their AIA HealthShield Gold Max B policy and will announce the details of the revisions in due course."

Madam Sim's daughter Rachel Lim said her mother appreciates what MOH has done to help her regain her previous benefits. She added AIA has contacted them to say it will send a cheque to reimburse her mother for the additional payment she had made.

Dr Lam Pin Min, chairman of the Government Parliamentary Committee for Health, said: "It is unfortunate that such cases occur, especially when insurance companies are supposed to provide peace of mind and protect the interest of policyholders."

The MP for Sengkang West suggested having "a proper route for redress or even an independent body set up to provide unbiased and professional assessment of such appeals".

He has received numerous complaints from people who said they have been excluded from coverage, even when they have been cured of a medical condition.

He said: "The perception is that many insurance underwriters are overly cautious to the extent of being unfair or unreasonable in their risk assessment. This could either be due to the lack of understanding of the medical condition or being excessively stringent."

CHANGE IN BENEFITS

- AIA told Madam Esther Sim that she will be covered under another insurance plan and that her existing plan would be discontinued. Her premiums will go up by about $300 a year to $1,119, but the benefits are better.

- However, the claimable amount is pegged at 100 per cent for treatment cost incurred at public institutions, but only 70 per cent at private facilities under her new policy. Her original policy did not discriminate between the two.

- Previously, her co-payment was 10 per cent. Now, it is 37 per cent (30 per cent + 10 per cent of 70 per cent).

Outpatient benefits enhanced under new plan: AIA S'pore

WE THANK Mr Raymond Koh Bock Swi for his feedback ("Timely reminder to insurance companies"; Wednesday).

AIA Singapore's new Integrated Shield Plans aim to enhance both the level and scope of benefit coverage with corresponding premium rate adjustments, concurrent with the changes to the MediShield scheme in March.

Accordingly, we have moved our existing policyholders to the respective new AIA Integrated Shield Plans that provide material enhancements to key benefits.

We recently noted that for certain outpatient benefits under the new AIA HealthShield Max B plan - designed primarily for treatment at restructured hospitals - policyholders who choose to receive outpatient treatments from private hospitals may get a lower payout than under the old plan, in certain circumstances.

We have since further reviewed and enhanced the outpatient benefits under the new AIA HealthShield Gold

Max B plan to ensure that all policyholders receive equivalent or higher benefits, as were available under the old plans.

We encourage policyholders with inquiries to contact their AIA financial services consultant or call the customer care hotline on 1800-248-8000.

We will continue to work closely with all relevant parties to provide adequate coverage for families in Singapore.

Tan Hak Leh
Chief Executive Officer
AIA Singapore
ST Forum, 20 Dec 2013

Timely reminder to insurance companies

I AM glad the Health Ministry has taken affirmative action to ask AIA not to reduce the payouts to policyholders when they switch to a different plan ("MOH asks insurer not to reduce payouts"; Monday).

Health insurance is a long-term commitment, and policyholders should not change plans or insurers as they will lose out most of the time.

In the case of policyholder Esther Sim, she had no choice because AIA was discontinuing her plan.

While AIA was moving policyholders like her to another plan, did it consider the implications and whether the higher annual premiums were justified?

Most policyholders have no choice but to abide by the decisions of their insurance companies.

To avoid similar incidents, there should be a formal channel for aggrieved policyholders to raise issues with the authorities.

Singapore has an ageing population and we need to protect the public against unfair practices.

Meanwhile, this episode is a good reminder to insurance companies to place priority on the welfare of their loyal customers, instead of merely chasing profits.

Raymond Koh Bock Swi

ST Forum, 18 Dec 2013

* Aviva restores payouts for dialysis
Second insurer, after AIA, to be told by MOH not to short-change patients
By Salma Khalik, The Straits Times, 25 Feb 2014

A SECOND insurer has been taken to task by the Ministry of Health (MOH) over reduced payouts to policyholders on dialysis.

Two months ago, MOH asked insurer AIA not to reduce payouts to such policyholders, whose benefits shrank when they were moved to a different health plan. About 20 end-stage kidney failure patients on dialysis were affected.

Now, it has told Aviva not to short-change similar patients.

The moves follow queries by The Straits Times to MOH about the reduced payouts.

Aviva reduced the amount of payout for dialysis under two of its integrated MediShield plans in March last year, when the basic MediShield package was enhanced. At the same time, it raised premiums.

Payouts for dialysis were cut from 65 per cent of the dialysis fees to 50 per cent of the cost under its public hospital Class A plan, resulting in patients having to top up more in cash themselves despite having insurance coverage.

And under its Class B1 plan, only 30 per cent of the cost of dialysis became covered, down from 50 per cent.

The integrated MediShield plans, for which Medisave can be used to pay the premiums, offer plans pegged at the rates of private hospitals and A and B1 class wards at public hospitals. The basic MediShield covers people for subsidised care.

Some integrated MediShield plans pegged at the rates of A and B1 class wards continue to pay out as charged for dialysis, subject to a monthly or annual cap.

Unlike for most types of medical treatment here, where there is private, public and subsidised care, for dialysis, there are no centres in the public sector. Most are run by voluntary welfare organisations such as the National Kidney Foundation, and patients are means-tested. The rest are privately run.

So, someone who has enough money to be unable to qualify for subsidised dialysis at one of the means-tested centres has to go to a private one.

Dialysis is for life, and costs vary from $2,500 to more than $4,000 a month at private centres.

Following MOH's intervention, Mr Daniel Lum, Aviva's director of product and marketing, said it is now contacting its three affected policyholders about giving them the payouts they had enjoyed previously. They will also be reimbursed the difference between the previous payout and the reduced one dating back to March last year.

Although MOH had approved the changes to Aviva's plans as it felt that pro-rating the payout would "help to ensure that policyholders also take responsibility for their health-care needs and help to curb unnecessary claims", its spokesman said, the change was not meant to affect those already claiming the benefit.

The spokesman added: "MOH understands that some policyholders may have been adversely affected by these changes and has requested Aviva to look into the matter."

Aviva's Mr Lum said: "This is an interim measure to help with the current crunch that the dialysis centres are facing. It's not meant to encourage all customers who bought plans for government hospitals to opt for private treatments and drive up the claims, which will ultimately impact premiums for everybody."

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