Thursday, 27 February 2014

Little peace of mind with MediShield integrated plans

By Salma Khalik, The Straits Times, 25 Feb 2014

THE more I look into the MediShield integrated plans (IP), the more concerned I get that by the time I'm old, frail and in need of hospital care, the insurance policy I've been paying for years in the hope of good medical coverage will let me down.

Like many people, I'm insurance-naive.

I assumed that when I signed on the dotted line for coverage by a particular plan, I would at least get the coverage the insurer had promised at the time I joined.

Yes, I know insurance premiums will go up as the cost of medical care rises. That I can live with.

What I find most disturbing is the way the insurer can decide to remove some of the coverage promised - without my explicit consent.

Isn't an insurance policy a contract between the insurer and the insured? Shouldn't both parties have to agree to changes?

I now find to my dismay that I have indeed agreed to the new terms by continuing with the policy - the contract is renewed every year when I pay my premium. Should I disagree with the new terms, I can decide not to re-contract.

But is that really an option?

Of course not.

Medical insurance, unlike car or travel insurance, is one where the insurer clearly holds the upper hand. Customers can't easily shop around for a cheaper or better plan - especially if they have some chronic ailment which most insurers would happily exclude from coverage.

So for most people, changing a plan after the age of 50, when more than half have some chronic ailment like high blood pressure, high cholesterol levels or diabetes, could mean getting lower coverage.

Only their existing insurer is obliged to continue covering them - a requirement by the Government for all IPs where Medisave can be used to pay for premiums.

Thank goodness for that.

But I've heard many stories in my 14 years of covering health care for The Straits Times of how some private insurers stop renewing, and stop paying out claims, after a person is down with a major ailment such as cancer.

This would appear to make a travesty of insurance, since coverage is withdrawn at the point when you most need it.

What I don't understand, too, is this: If the contract is renewable annually and each age band pays for itself, why can't I simply enter into a similar contract with another insurer - without having to make a new medical declaration and being excluded for some illnesses?

After all, what the insurers are saying is that all the premiums I had paid in the past were meant to be used by people in my age group, for treatment of diseases already diagnosed. Of course, some money from those premiums I paid has to be kept, to continue treating patients with diagnosed problems. But why can't I take the equivalent sum for future payments from my premiums with me, and go to another insurer for the same level of coverage?

I also wish that the Government - either the Monetary Authority of Singapore, which oversees insurance, or the Ministry of Health (MOH) - had put in further conditions to ensure that people are fairly treated by insurers.

Right now, before making changes to their plans, insurers need to get approval from the MOH. Unfortunately, the MOH does not appear to be a proactive supporter of patients' needs.

It was only when The Straits Times highlighted the lower dialysis payouts by AIA and Aviva to its policyholders from March last year that the ministry stepped in and told them not to reduce the payout for people already making claims.

But this ruling is only for people already diagnosed and making claims.

Anyone claiming after the payouts were reduced has no choice but to accept the lower sums.

If insurers can reduce payouts for dialysis at will, what's to stop them from doing so for other treatments in the years to come?

After all, many of their policyholders will find it difficult to switch plans. They are essentially a captive market.

The MediShield Life review committee might want to look at how people on IPs can be protected for their own good. Two in three MediShield policyholders also have IPs.

They could insist on no reduction of payouts.

Or the MOH could come up with a guide on the minimum required for each class of plans, leaving insurers free to give more should they want to.

Since Singapore is moving towards greater dependence on insurance to cope with large medical bills, it is imperative that health insurance regulators get their act together and place restrictions on the way insurers chop and change coverage and payouts at will.

The assurance of having sufficient payouts from one's insurance scheme is vital for people's peace of mind.


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