1 in 8 drops out of MediShield integrated plans if cash top-up is needed

Reasons include reluctance to use cash, late payment and life changes

By Salma Khalik, The Straits Times, 13 Feb 2014

ONE in eight people dropped out of their MediShield integrated plans (IP) last year, after being required to top up cash when premiums exceeded the amount covered by Medisave.

Some were reluctant to pay the premium increase, while others, like Madam Lucy Bek, realised the need to top up too late and found themselves no longer insured.

When the 66-year-old received the first letter telling her to top up her IP premium, she tossed it into the bin, thinking it was junk mail. It was only when she got the final third reminder from her insurer NTUC Income that she realised that her annual premium had crossed the $1,000 mark - the maximum for which her Medisave account could pay.

The Medisave cap is $800 for those aged 65 and younger, and increases up to $1,400 for those who are 80 and older.

Madam Bek contacted Income to ask about the increase, and if the higher premium of $1,192 would be permanent. By the time she decided to stay on the plan and sent Income a cheque, however, it was too late. The retiree, who lives in a three-room flat with her husband, also 66, was out of the scheme and no longer covered.

She was not the only one who found herself without coverage because she did not pay on time. Insurers said they do see such incidents, and treat them on a case-by-case basis. The main excuses given are forgetfulness, or that they were travelling when they missed the deadline.

A spokesman for the Life Insurance Association Singapore (LIA), which provided the dropout figures, stressed that not all who dropped out last year did so because they were late with their top-up.

She said: "They could have become unemployed, entered into a different stage of life, or discontinued and bought a product from another insurer."

Still, feedback from recent focus group discussions on the upcoming MediShield Life found that many people were unhappy about paying premiums with cash, preferring the payments to come entirely from their Medisave.

Claims under MediShield, the national health insurance plan, are pegged to rates of subsidised wards in government hospitals. IPs, however, cover inpatient care at private hospitals or wards.

Of the 92 per cent of people on MediShield, two in three are on these enhanced plans. But IPs are also more expensive, with annual premiums of $8,000 in some cases.

For Madam Bek, this was the first time she had to use cash to pay a part of her annual premium.

"All this while, my premiums have been paid by Medisave, so I was not aware that I needed to pay cash to top up. I was also shocked at the amount, so I wanted to find out more."

But Madam Bek exceeded the 60-day grace period that Income allows. A spokesman for Income said it sends three reminders, but does not follow up with a phone call. The LIA mandates a 30-day grace period, though some insurers give up to 90 days.

When she went down personally, she was told that she could be reinstated, but had to make a new medical declaration. This meant applying for the coverage the same way a new member would.

She said that while she did not make any claim in the 13 years that she was covered, she does suffer from hypertension and high cholesterol levels, although both are well controlled. She feared re-applying for the IP might leave her uncovered for heart attacks, strokes and other illnesses related to her conditions.

She was also unhappy that Income did not suggest moving her to a cheaper plan so she could retain her insurance coverage.

Without the fresh medical declaration, the insurer rejected her appeal and returned her cheque on Jan 29. She then told The Straits Times about her problem.

On Monday, she received a call from Income to tell her that she has been reinstated under the original plan.

Income's spokesman said the decision was made independently and before it received a query from The Straits Times.

Problems faced by policyholder: Income replies

THURSDAY'S article ("1 in 8 drops out of MediShield plans if top-up is needed") related the problem an NTUC Income policyholder faced after she failed to top up her premium payment by cash.

It was reported that Income sent three reminders but did not call the policyholder.

In fact, we exchanged e-mails with the policyholder before the policy was terminated. We explained why the premium top-up was necessary and highlighted the outstanding cash portion and the payment options available.

The article also mentioned that our policyholder was unhappy that Income did not suggest the option of moving to a lower plan.

In fact, we provided details of the lower plans that policyholders could downgrade to in our renewal letter. Unfortunately, we noted from the article that this letter and a second letter were overlooked.

We make reinstatement decisions based on case merits. Our decision to reinstate the policy on standard terms was made three days before we received the reporter's query.

We recognise that health-care affordability is a real concern for our community, and try to be as helpful and reasonable as possible to all our customers.

Lau Sok Hoon (Ms)
Vice-President
Group and Health Division
NTUC Income
ST Forum, 15 Feb 2014