Monday 16 June 2014

MediShield Life Q&A

The Straits Times’ invitation to readers to send in their queries on MediShield Life saw them raising concerns on who will be included in the new health insurance scheme to what will happen to existing integrated shield plans.

The following are some of the questions received by ST, with the responses provided by the Ministry of Health (MOH):

Pre-existing illness: Who must pay extra?

Singaporeans who developed their health condition after they were insured under MediShield would not have to pay the additional 30% premium loading for the MediShield Life, said MOH, responding to a query from a ST reader on whether the extra 30% under the upcoming MediShield Life be applicable to him, given that he is already using Medisave and MediShield in partial payment of hospital charges relating to his cancer treatment.

Currently, 93 per cent of Singaporeans are covered by MediShield, while the remaining 7 per cent of Singaporeans who are currently uninsured may have to pay the extra 30 per cent if they are found to be in ill health before the compulsory MediShield Life kicks in next year.

The Government has promised subsidies and Medisave top-ups to help Singaporeans cope with higher premiums.

Members from the Pioneer Generation will also receive further help. The Government will provide MediShield Life premium subsidies starting at 40 per cent for those aged 65 and above this year, namely the pioneer generation. Those above 80 will have their premiums fully paid for by Medisave top-ups and subsidies.

Under MediShield Life, pioneers aged 65 to 79 who are fully insured under MediShield today will pay "about half of their current MediShield premiums after premium subsidies and Medisave top-ups", the MOH said.

* MediShield Life Review Committee Report

MediShield Life Premiums Unveiled

* MediShield Life Premium Calculator

Premium subsidies for lower to middle-income families

I am a person with disabilities. I have nothing in my Medisave. Since MediShield Life is for everyone, I presume I am included. But how am I to pay for the premium?

The Government will put in place a range of additional support measures to help Singaporeans, especially those on lower to middle incomes and the elderly. For instance, there will be premium subsidies for lower- to middle-income households, which will cover up to two-thirds of the population.

These premium subsidies will be a permanent feature of MediShield Life and will not be phased out after a few years. For those who need help with their premiums even after the subsidies, the Government will provide additional premium financial assistance.

The Ministry of Health will finalise the subsidy measures and provide more details after the Committee has submitted its final report and recommendations.

Singaporeans working and living overseas – do they need to have MediShield Life? What if they have very little in Medisave?

In line with the principle of universal coverage, the Committee has recommended that all Singaporeans should be covered under MediShield Life for life.

Singaporeans working and living overseas will benefit from the MediShield Life protection for life at any point that they choose to return to Singapore for medical treatment. 

Why do people who are fully covered by their companies need to have MediShield Life – isn't it a waste of money for nothing?

All Singaporeans have to join the scheme and do their part. This includes those who receive benefits from their employer. The Committee encourages employers to recognise the mandatory universal nature of MediShield Life and study how best to support their employees’ participation in the national insurance scheme.

MediShield Life will ensure that all Singaporeans will be protected against large hospital bills regardless of how their life and health circumstances change over time, even during unemployment, or if the medical benefits provided by the employer is not portable.

Nonetheless, the Committee is studying the issue of Employer Medical Benefits and how they interact with MediShield Life and will share their observations when ready.

Will Singaporeans who are currently under the pension scheme still be included in MediShield Life?

MOH clarified that pensioners would not lose out, although MediShield Life will apply to all Singaporeans and permanent residents, including those who are currently receiving employer benefits like pensions. The Government has indicated it will study the issue carefully together with the unions, and ensure that pensioners will not be adversely affected with the introduction of MediShield Life.

I am not covered by MediShield. I have kept myself healthy all these years. Do I still have to pay the additional 30 per cent premium under the MediShield Life scheme?

No. The 30 per cent top-up in premiums for 10 years applies only to people with pre-existing diseases that would exclude them from full coverage.

You can join MediShield today, or MediShield Life when it starts at the end of next year as a healthy individual paying the normal premium rate.

However, if you wait till MediShield Life is launched, and you are unfortunate to develop a medical condition before the end of next year that would result in exclusion, then you would be liable for that 30 per cent additional premium.

It might be a good idea to join MediShield today to avoid such a possibility.

I am a pensioner with full lifelong medical benefits. I need to pay only 20 per cent of the ward charges should I be hospitalised and I get full reimbursement for treatment at polyclinics. Will I be better off with MediShield Life than with the current medical benefits that I am entitled to?

MediShield Life applies to everyone, including those who receive benefits from their employers such as pensioners.

The Government has indicated that it will study the issue carefully together with the unions, and ensure that pensioners will not be adversely affected with the introduction of MediShield Life.

As MediShield Life is for critical illness, it will not cover the cost of polyclinic treatments. However, your current coverage for this should not be affected.

I'm a permanent resident. Will MediShield Life be compulsory for me?

Yes, it will be compulsory for all Singaporeans and permanent residents.

I have a Class A ward Integrated Shield Plan, but have an exclusion clause for pre-existing heart condition. Will I be covered by MediShield Life if I'm hospitalised for a heart problem - since it's supposed to cover even pre-existing diseases?

An Integrated Shield Plan (IP) comprises two parts - the basic MediShield plan and a top-up portion. IP policyholders enjoy the combined benefits of MediShield, which is run by the CPF Board, and the enhanced benefits of the top-up portion, which is run by private insurers. 

MediShield Life provides a basic level of coverage, aimed at Class B2 or Class C wards in the public hospitals. Your IP adds on to this coverage so that you can be adequately covered when you seek treatment in Class A wards in the public hospitals. 

Because MediShield Life will provide coverage for all pre-existing conditions, all IP policyholders will also enjoy the MediShield Life coverage, for life, including for any pre-existing conditions.

In your case, MediShield Life will provide basic coverage for your pre-existing heart condition, even if this is excluded from the top-up coverage by your private insurer. 

What this means is that should you need treatment for your pre-existing heart condition, and your IP continues to exclude it, you will still enjoy insurance coverage at Class B2 or Class C in the public hospitals, provided by MediShield Life. If you are treated in a Class A ward, MediShield Life will reimburse you the amount you would have received in a B2 ward.

I am covered under IncomeShield rather than IncomeShield Life. Since, as a citizen, I am automatically covered under MediShield Life, should I give up IncomeShield, especially as I don't plan to opt for anything higher than Class B2 if hospitalised?

If I don't, will I be wasting money on premiums for IncomeShield?

Can you please explain how I can switch from an Integrated Shield Plan to MediShield Life in future when circumstances warrant it?

Singaporeans should carefully consider their choice of ward class and purchase insurance coverage accordingly.

If you want to stay in private hospitals, or in Class A/B1 in public hospitals, you may wish to purchase a suitable IP. However, your premiums will be higher.

If you plan to stay in a Class B2 or C subsidised ward, MediShield Life will be good enough.

If you give up your IP, you will be automatically covered by MediShield Life when it is implemented at the end of next year.


Amy Khor answers MediShield Life queries in webchat
By Joanna Seow, The Straits Times, 3 Jul 2014

WHY incomes above $2,600 are considered high and don't qualify for MediShield Life subsidies, and whether people would be paying twice for health insurance when the Government's lifelong health insurance kicks in - if they already have additional insurance - were hot topics during a webchat with Dr Amy Khor last night.

Around 90 people quizzed Dr Khor, chairman of the Government feedback unit REACH and Senior Minister of State for Health and Manpower, during a 90-minute chat on the REACH Facebook page.

Responding to questions on why incomes above the $2,600 ceiling for premium subsidies are classified as high income, Dr Khor said that the amount is for each person in the household. So for a four- member household, the total income would be $10,400. Using this yardstick, two-thirds of the population will receive the subsidies.

"We used per capita household income to take into account households with more members who would need more help," she said.

Another concern raised was about "double paying" if the person already has private health insurance.

Participant Wong Boon Hong brought up the issue of those who already had complete coverage - such as 100 per cent of hospitalisation costs covered through riders and add-ons - and asked if they should cancel these riders where the person pays more to get added coverage.

A Ministry of Health representative explained that riders are usually on top of Integrated Shield Plans, which already include MediShield today - which will automatically become MediShield Life next year.

Speaking to the media before the session, Dr Khor said REACH had received about 250 comments on its MediShield Life microsite, Facebook page and via e-mail after the MediShield Life Review Committee's report was released on June 27.

A common misperception was that MediShield Life coverage was only for those who used the cheaper Class B2 and C wards. Dr Khor pointed out that MediShield Life covers all Singaporeans regardless of the class of ward they choose.

"MediShield Life coverage is pegged to expenses in subsidised B2 and C class wards, so if they were to opt to go to a higher ward class or to private hospitals, they can still claim the same benefits from MediShield Life," she said, but added that they would have to top up more.

The Government will spend $4 billion over the next five years on subsidies for MediShield Life, which kicks in at the end of next year. Benefits of the new scheme include raising daily and annual caps and removing the lifetime claims limit.

Some who took part in the Facebook chat also said the fact that the scheme covered them for life and included those with pre-existing medical conditions, gave them peace of mind. Reach will compile commonly asked questions from the chat on

MediShield support for asset-rich, cash-poor
They can get transitional subsidy for MediShield Life premium rises: Gan
By Kash Cheong, The Straits Times, 3 Jul 2014

HEALTH Minister Gan Kim Yong yesterday assured Singaporeans with annual home values above $21,000 that they will be able to apply for additional help if they struggle to cope with increased MediShield Life premiums.

About a fifth of all properties here are estimated to have annual home values (AV) - the amount an owner would get in a year if he were to let out the property - over this figure.

However, they will not receive a permanent subsidy.

There had been complaints that the system penalises people who are asset-rich but cash-poor, such as those who have inherited property but have little income.

Mr Gan responded by saying that MediShield Life subsidies have been means-tested according to per capita household income and a person's asset value, as this makes best use of limited resources.

For two-thirds of households - who have a monthly per capita income of $2,600 or less - the Government will provide permanent MediShield Life subsidies, means- tested according to their income.

They must stay in properties of annual values of $13,000 or less to qualify for the full subsidy. This would cover almost all in Housing Board flats, Mr Gan said.

Those with homes of annual values of $13,101 to $21,000 receive 10 percentage points less permanent subsidies than those in a similar income tier with homes of AVs of $13,000 and below.

But Mr Gan stressed that all Singapore citizens would receive transitional subsidies, to offset premium increases by 80, 60, 40 and 20 per cent respectively from 2015 to 2019.

For the asset-rich, cash-poor, "we have additional premium support that will consider their situation on a case-by-case basis," he said, and encouraged anyone needing help to write to the government.

Remisier Teo Hoon Seng, 63, who lives in a property of over $21,000, wishes the scheme was "more equitable". People who have higher-value properties but really need help have to "deal with bureaucracy" in order to get it, he said.

Mr Gan spoke about the new national medical insurance scheme at a topping-out ceremony of a patient rehabilitation facility in Simei, to open in December.

Jointly managed by Changi General Hospital and St Andrew's Community Hospital, it will have 280 beds and provide rehabilitation to patients recovering from illnesses or accidents.

Must I pay more if I have a pre-existing illness?
Senior Health Correspondent Salma Khalik answers some of the big questions about the new national insurance scheme MediShield Life.
The Sunday Times, 29 Jun 2014

Q: Isn't the maximum per capita income level of $2,600 to qualify for permanent subsidies rather low if two out of three people are to get them?

According to SingStats, 67 per cent of residents live in households with this or lower income level.

A working couple with two kids and an elderly parent, earning a total of $12,000 a month, would qualify, as their per capita income is $2,400.

Q: I am a permanent resident. Can I participate in MediShield Life and do I get any subsidies?

As a PR, you must join MediShield Life. You can get a subsidy if your income level entitles you to it - but at half the amount a Singaporean gets. However, you will not get the four years of transitional subsidies which will only be for citizens.

Q: I have heard that Singaporeans who live in condominiums and landed property will get less or even no subsidy, even if their per capita income is low. Is this true?

That depends on the value of your property. If the annual value - the amount you would get if the place was rented out - is less than $13,000, you will get the full subsidy. If it is $13,000-$21,000, you get 10 percentage points less - this means that if someone your age and income bracket gets a 30 per cent subsidy, you will get a subsidy of 20 per cent. Those living in homes with annual values of more than $21,000 will not get any subsidies.

Q: How do I find out the annual value of my house?

If you are the owner, you can go to the website and sign in with your SingPass to find out the value.

Q: I have a pre-existing illness and am glad to now qualify for MediShield Life. But how much more in premiums will I have to pay, and will I also get the government subsidies?

You will have to pay 30 per cent more in premiums than others in your age band, for the first 10 years.

If your per capita income entitles you to a subsidy, it will also apply to the additional 30 per cent you need to pay.

So for example, you are entitled to a 50 per cent subsidy, and people in your age band pay a premium of $500 a year. Your premium will be $650. But because you get a 50 per cent subsidy, you only need to pay $325 - which can come from your Medisave.

Q: How do the higher premiums for MediShield Life affect the premiums I pay for my Integrated Shield Plan (IP)?

The changes, if any, will only come when MediShield Life is launched at the end of next year. Health Minister Gan Kim Yong has given the assurance that you should face similar, or even lower, increases than people on the basic MediShield.

Q: When is the Government setting up this new standardised Class B1 Integrated Shield Plan? Should I take it up?

There are no details yet, but it is likely to be timed with the launch of MediShield Life at the end of next year.

Whether you should take it up will depend on what class of hospital ward you are likely to go to should you be seriously ill. You should buy an insurance plan for the class.

Q: If I am already on a Class A or private hospital IP, can I downgrade to this new standardised IP? If I change plan, do I have to have a medical all over again? Can I transfer the premiums paid on my current IP to this new IP or do I start all over again?

Yes, you will be able to downgrade, if your insurer offers a B1 plan. There is no need for a medical when you downgrade. Premium is paid for each year and is not cumulative. When you stop a plan, you will be refunded the balance.

Q: Can those with pre-existing illnesses take up this new standardised IP or any other IP if they want to upgrade their coverage?

It is up to the individual insurer if it wants to cover you fully, or with exclusions for your medical condition. It may charge you a higher premium than others in your age band to cover you for your pre-existing illness.

Q: I had been fully covered on a B1 class IP. But when I upgraded it to an A Class plan, I was excluded for conditions I had recently acquired. Will I need to pay the 30 per cent loading for pre-existing conditions for MediShield Life?

No, because you have been covered all along by MediShield under your B1 plan.

The ABCs of MediShield Life
Should you keep your integrated plan? Opt for lower-class ward? We look at the options
By Mok Fei Fei, The Sunday Times, 6 Jul 2014

Insurers now working on B1 coverage plan

Now that the dust is settling on the announcement of the new MediShield Life premiums, it would be a smart thing to do a stock-check on just where you stand on medical insurance.

The premium increases unveiled a week ago give certainty about how much you will need to pay for coverage but that is just one part of the story.

These across-the-board premium hikes for the basic scheme proposed by the MediShield Life Review Committee are to pay for the enhanced benefits that will provide lifetime coverage for all.

Government subsidies of about $4 billion will kick in over the next five years to take the sting out of some of the increases but we will all have to pay more.

In percentage terms, the biggest rise hits those in the 21 to 30 and 31 to 40 age ranges - people who are likely to be economically active.

The annual premiums before subsidies for these age groups will soar by 195 per cent.

Those between 21 and 30 will have to fork out $195 in annual premiums next year before subsidies, up from $66. If subsidies are factored in, the annual premium will drop to $82 per year for the lower-income group and to $92 for high-income earners.

The annual premium for those 31 to 40 will be $310 before subsidies, up from $105. Subsidies will bring the premiums down to between $131 and $146.

Conversely, those aged 81 to 83 will face the smallest premium rise of just 11 per cent, from $1,123 to $1,250. Subsidies will reduce the premiums to between $750 and $1,148.

The premiums will be used to help provide coverage against large hospitalisation bills for those previously deemed uninsurable people with pre-existing illnesses or those above 92, for example.

The extra cash will also go some way towards helping to fund other benefits under MediShield Life, such as the removal of lifetime claim limits and increasing the policy year claim limits.

While the enhanced MediShield Life benefits are a welcome relief for many, a key question is raised: Should you keep your Integrated Shield Plan (IP) or buy one, if you do not have one, to complement the basic plan?

The Sunday Times checks out the ABCs of MediShield Life.

Affordability, as-charged riders

Affordability is the key to the question if you are considering upgrading your MediShield Life basic plan to an IP.

Instead of just looking at your annual premium in isolation, consider the lifetime premium cost, says Mr Ong Lean Wan, chief executive of Life Planning Associates.

"The concept of lifetime premium cost for IP gives you a better gauge of the total funding amount for a long-term health insurance plan that charges you age-related premiums."

The lifetime premium cost calculates the cumulative premiums from a starting age to an end one.

Based on the cheapest IP for private hospitals and assuming the current annual premium remains constant throughout, Mr Ong found that the lifetime premium cost from age one to 85 is $102,407.

If you start an IP later in life, from 30 to 85, which is the average life expectancy of Singaporeans, the lifetime premium cost is $96,267.

Mr Ong also notes that six in 10 people with an IP for private hospitals, which is the most expensive type of IP, opt for a public hospital when they need treatment.

And seven in 10 of people with an IP for public hospitals choose lower ward classes than their coverage provides.

"This is akin to a person who buys an expensive business-class airline ticket but chooses to sit in the economy class when he boards the plane," says Mr Ong.

Sales manager Anna Chow, 49, chose to stay in a B2 ward at National University Hospital when she caught dengue in March although she was eligible for B1- and A-class wards.

"I was told by the staff that if I stayed at the higher-class wards, all my follow-up treatment and medication post-hospitalisation would be priced at the higher-class wards, which is very costly."

But Ms Chow was able to tap her IP to avoid out-of-pocket expenses as she had a rider that paid out on an as-charged basis, meaning she did not have to fork out any deductible or co-insurance payment.

She also received a pleasant surprise as her insurer paid her a $300 cash reward for staying at a lower-class ward as it helped the company save costs.

Mr Daniel Lum, Aviva Singapore's director of product and marketing, points out that MediShield Life and IPs are complementary as IPs give people a choice of hospitals and wards.

"While the MediShield Life component provides basic financial protection against large hospital bills at Class B2 or C wards of restructured hospitals, IPs provide Singaporeans with choices and the option to increase their level of coverage so as to minimise out-of-pocket expenses," he adds.

B1 standardised plan

To B1 or not to B1, that is another question to ponder.

This is because the Health Ministry accepted the recommendation to work with the industry to develop a standardised B1 hospitalisation plan.

Two-thirds of all admissions are to B2 or C class wards but with an increasingly affluent population used to creature comforts like air-conditioning, demand for higher-class wards will likely rise.

The Life Insurance Association (LIA) told The Sunday Times that the five IP insurers - AIA, Aviva, Great Eastern, NTUC Income and Prudential - are collaborating with the ministry to develop the standard B1 plan.

NTUC Income chief executive Ken Ng says: "We will also be working with the Health Ministry, the MediShield Life Review Committee and the LIA to look at how our IncomeShield plans will continue to play an important and complementary role in ensuring that all Singaporeans have adequate health coverage."

A Prudential spokesman said: "Prudential will be offering B1 plans as we want to offer our customers choice."

Independent financial adviser Roy Varghese notes: "IP will come in handy if you choose to have a B1- or A-class ward and a stay in a private hospital, but if you are satisfied with B2- or C-class wards, then MediShield Life is adequate.

"Where you draw the line on which plan depends on your needs, but I would say if you belong to the top half of the income bracket, above the median household income of some $8,000, you should consider getting an IP."


Controlling hospitalisation costs is also central to keeping premiums affordable.

But economic theory shows that there is moral hazard at work: Insured people tend to use more health-care services because they have insurance.

For example, they ask for more tests than necessary, particularly at the pricier wards and private hospitals.

That's why medical inflation seldom obeys laws of gravity: It goes up and almost never comes down.

A study by Roland Berger Strategy Consultants last year found that the average Singaporean spent US$1,785 (S$2,223) on health care in 2010 and is expected to spend US$3,232 by 2020.

The study also estimated that net medical inflation here is 4.9 per cent a year, outstripping general inflation.

A check of the MediShield claims on the CPF website reflects the rising trend.

From January to March this year, there were 72,181 claims totalling $88.6 million or an average of $1,227 per claim.

That's higher than last year's $1,189 per claim. Indeed, the number has been rising steadily every year since 2009, the earliest date available on the website.

AIA Singapore CEO Tan Hak Leh says: "The long-term success of IPs ultimately depends on the effectiveness of claims management and the ability to promote healthy living."

A Great Eastern spokesman says: "We are committed to work towards introducing better plan designs and will work with government bodies administering MediShield Life for better cost containment.

"Individuals need to take responsibility to stay healthy, use appropriate levels (of medical care) and avoid over-consumption of health-care services."

Readers query impact of MediShield Life
Questions range from who it covers to fate of integrated shield plans
By Linette Lai, The Straits Times, 12 Jun 2014

CONCERNS about MediShield Life range from who will be included in it, to what will happen to existing integrated shield plans, according to readers responding to The Straits Times' invitation to send in their queries about the new health insurance scheme.

The most common question was raised by retired civil servants already on pension schemes.

They asked how MediShield Life would benefit them, since the majority of their health-care bills are already taken care of.

The Government used to pay out pensions to civil servants that included generous health benefits but stopped placing junior civil servants on the scheme in 1973. Last year, some top civil servants also had their pension schemes replaced by different plans.

Mr Raoul Sequeira, for instance, who retired from the Singapore Armed Forces in 1995, is now under a pension scheme that gives him and his wife free lifetime medical coverage for most conditions. It also subsidises 80 per cent of ward charges if either of them is hospitalised.

He is currently covered by MediShield but has hardly ever needed to use it. And when MediShield Life kicks in next year, his premiums will probably go up because of the improved benefits and universal coverage.

"I presume it's going to be affordable but why should I have to pay for something that I don't need," asked the 67-year-old.

"I don't think that should be the case," he added.

Another pensioner asked if the Government would pay for the increase in their premiums, and whether they would be compensated.

Responding to the questions, the Health Ministry said pensioners would not lose out, although MediShield Life will apply to all Singaporeans and permanent residents, including those who are currently receiving employer benefits like pensions. "The Government has indicated it will study the issue carefully together with the unions, and ensure that pensioners will not be adversely affected with the introduction of MediShield Life," said a spokesman for the ministry. More details will be announced at a later date.

Pre-existing illness: Who must pay extra?
It won't apply to those who got sick after being covered by MediShield
By Kash Cheong, The Straits Times, 14 Jun 2014

PART-TIME data entry worker Yuen Ho Wah was covered by MediShield when he found out he had colon cancer four years ago.

Along with Medisave, it has paid "most" of the $100,000 his treatment has cost since.

So when the MediShield Life Review Committee recommended recently that people with pre-existing conditions pay higher premiums to reflect their higher risks - namely an additional 30 per cent for ten years - Mr Yuen was worried.

"Will the extra 30 per cent under the upcoming MediShield Life be applicable to me?" asked the 66-year-old in an e-mail to The Straits Times. "I am already covered by MediShield and I hope I won't be paying much more extra in the new scheme."

However, the Ministry of Health (MOH) has assured people like him that, under the plans, they would not need to fork out an additional 30 per cent in premiums when MediShield Life starts late next year.

If your health condition developed only after you were insured under MediShield, the additional premium loading of 30 per cent would not apply, the MOH said, adding the extra amount would apply only to those "who are already in ill health before the start of their insurance coverage under MediShield or MediShield Life".

Currently, 93 per cent of Singaporeans are covered by MediShield.

The uninsured 7 per cent includes over-65s, low-income or jobless Singaporeans who cannot afford to pay the premiums and people who opted out because they have private insurance or are covered by their employers.

If these people are found to be in ill health before the compulsory MediShield Life kicks in next year, they would have to pay the extra 30 per cent.

The Government has promised subsidies and Medisave top-ups to help Singaporeans cope with higher premiums.

As he is part of the pioneer generation, Mr Yuen will receive further help. The Government will provide MediShield Life premium subsidies starting at 40 per cent for those aged 65 and above this year, namely the pioneer generation.

Those above 80 will have their premiums fully paid for by Medisave top-ups and subsidies.

Under MediShield Life, pioneers aged 65 to 79 who are fully insured under MediShield today will pay "about half of their current MediShield premiums after premium subsidies and Medisave top-ups", the MOH said.

"It's a relief to know that I don't have to pay the extra 30 per cent and pioneers like me will be getting more help," said Mr Yuen, whose condition is improving. "It gives us greater assurance in our retirement years."

Relief for those with pre-existing illnesses
MediShield Life will ease financial burden of dialysis patient
By Salma Khalik, The Straits Times, 19 Jun 2014

RETIREE Lee Sim Booy has been on dialysis for decades, since a reverse flow of urine damaged his kidneys in 1984.

Because of this serious illness, he was not able to join the national medical insurance, MediShield, when it was launched in 1990.

The widower, 73, goes for dialysis three times a week at the Kidney Dialysis Foundation (KDF) centre at Bishan, and pays a subsidised rate of about $900 a month.

He has not been working since he retired at the age of 55 in 1997.

He said: "The dialysis is a strain on me as I have to dig into my savings and rely on the allowance given by my son who lives with me."

Mr Lee's condition worsened earlier this year and he has not been able to walk well since April.

He now needs a live-in maid - which has added to his financial burden. He said he might soon have to sell his home and move into a rented flat.

But there is light at the end of the tunnel for Mr Lee, with the launch of MediShield Life at the end of next year.

The extension of the insurance to cover everyone, sick or healthy, for as long as they live, means that he will be able to claim $1,000 a month in insurance payouts.

Because he has a pre-existing disease, he will need to pay the "penalty premium" - or 30 per cent more than the normal premium - for the first 10 years.

But as he is part of the pioneer generation, Mr Lee will get both a permanent premium subsidy as well as Medisave top-ups that should take care of a large part of the premiums he will have to pay.

If he also qualifies for the permanent subsidy, which will be given to about two-thirds of the population, it will ease his financial burden further.

Details of how much he will get in subsidies will be released later.

Totting up the bill for Integrated Shield policies
High premiums may see many give up private plans when MediShield Life starts
By Linette Lai, The Straits Times, 21 Jun 2014

MADAM Niki Liu never realised how much her Integrated Shield Plan (IP) was costing her until this year.

After doing the sums, the 45-year-old discovered that her Medisave account - which she had been drawing on to pay the premiums - would run dry in about 10 years.

"I used to work, so at that time I didn't do the calculations," said the former bank teller. She stopped work when her youngest child, Rey Phua, was born six years ago.

Madam Liu started working out the sums only when her insurer told her her premium would go up to more than $600 a year - an increase of about $200.

"Ten to 12 years down the road, I won't have enough," said the mother of three.

Her husband, the family's sole breadwinner, earns about $1,800 a month.

IPs started in 2005 as an add-on to the basic MediShield.

Offered by companies such as Aviva and Prudential, they give policyholders extra benefits such as coverage for private hospital stays.

Around two-thirds of those insured under MediShield are on such plans. But, like Madam Liu, not everyone realises how pricey IPs can get over a lifetime.

"A lot of them now realise they cannot sustain this when they are retiring, when suddenly the premiums shoot up," said health economist Phua Kai Hong of the Lee Kuan Yew School of Public Policy.

He pointed out that IPs became popular as MediShield did not provide adequate coverage for big hospital bills.

But he expects many policyholders to terminate their private plans once MediShield Life, with its better terms, kicks in next year.

More details about how IPs will work with MediShield Life are set to be released at the end of this month.

Dr Chia Shi-Lu, head of the Government Parliamentary Committee for Health, added that anyone in Madam Liu's shoes should consider carefully before opting for IPs, especially if they do not intend to make use of the additional frills.

"These are nice to have, but not essential as the overall quality of care itself would be similar in restructured hospitals," he said.

And since the news of her premium increase, Madam Liu has been thinking twice about maintaining her private plan.

She has already decided to opt for a Class C ward in the event of her hospitalisation.

"I wouldn't want to drain the family, just because I'm lying down in a bed," she said.

Questions to ask about MediShield Life
Will premiums be affordable? Should you go private? What about co-payment?
By Mok Fei Fei, The Sunday Times, 15 Jun 2014

What the insurers say

Proposals unveiled recently by a committee tasked to look at enhancing the national health insurance scheme MediShield contained much good news.

MediShield Life - enhancements to the MediShield scheme - would offer higher payouts and, therefore, lower out-of-pocket expenses for CPF members.

But there are concerns that the increase in premiums, the details of which which have yet to be released, may be substantial for some. Throw some insurance terms such as "deductible" and "co-insurance" into the picture and it's no wonder many are left with fuzzy ideas of what the reforms are all about.

A tongue-in-cheek way to remember MediShield Life is to think of it as a Look Into Future Expenses, specifically large hospital bills.

The Sunday Times checks out how the new plans could affect you.

Basic plan

First, MediShield Life will ensure that everyone, even those with pre-existing conditions previously not covered under MediShield, will be insured.

Senior citizens can also heave a sigh of relief as all of them - a group more likely to need the insurance - will be covered. Currently, MediShield's coverage is extended only to those up to 92 years of age.

Other MediShield Life recommendations include the removal of the lifetime claim limit of $300,000, increasing the policy year claim limit by 40 per cent from $70,000 to $100,000, and higher claim limits for expenses like outpatient cancer treatments.

Under the proposals, there would also be lower co-insurance rates from between 10 per cent and 20 per cent, to between 3 per cent and 10 per cent.

"Co-insurance" is the amount of money in a large hospitalisation bill that you have to bear above the deductible.

A "deductible", meanwhile, is the initial sum that you have to pay for claims made in a policy year, before you receive a MediShield payout.

The deductible ranges from $1,500 to $3,000 and is put in place by the authorities to sieve out small claims, since the aim of MediShield is to help pay for large hospitalisation bills.

MediShield Life will continue to cover only Class B2 and C public hospital bills.

People who wish to stay in private hospitals or Class A and B1 wards in public hospitals should note that MediShield Life will cover only the amount it would for a B2 patient. It will not be able to pay the bulk of your bill, so you would need additional coverage on top of MediShield Life, known as Integrated Shield Plans (IPs).

Integrated Shield Plans

On top of the basic MediShield scheme, there are currently five insurers - AIA, Aviva, Great Eastern, NTUC Income and Prudential - which provide Medisave-approved IPs. About two in three Singaporeans are on Integrated Shield Plans.

This means you can use your Medisave savings to pay for the IPs, which are combined with basic MediShield to form a single integrated plan.

IPs provide benefits above and beyond what the basic MediShield scheme provide.

For instance, some IPs already offer lifetime coverage, coverage for certain pre-existing conditions, overseas medical treatments and the like.

With the enhanced MediShield Life scheme, there may be some overlaps with the IPs.

The Sunday Times understands that the MediShield Life Review Committee is in talks with the five insurers, reviewing the issues related to IPs, and will share its recommendations soon.

Mr Sumit Narayanan, partner for advisory services at consultancy firm EY in Singapore, said: "With the recent MediShield Life proposals, some uncertainty in the near term is to be expected as the proposals are being finalised."

He added: "This is a good opportunity for IP providers to launch more innovative products to cater to the different needs of the population."

Mr Andrew Taggart, PwC's South-east Asian insurance consulting leader, said: "The risk for IP providers is that their customers get confused by the new proposals in transition, so clearly articulating the impacts and reminding customers of the value of the plans will be an important activity for providers in the short term."

IP providers will also have to make sure they raise their game, not just their premiums, to ensure the enhanced MediShield Life scheme does not erode their competitiveness.

"The IP providers will need to work through the product and pricing implications of the changes particularly around pre-existing conditions to decide if they will cover them and if so at what price," said PwC consulting partner and actuary Steven Lim.

Reactions from the IP providers to the changes being made to MediShield are generally supportive.

AIA Singapore chief marketing officer Ho Lee Yen said: "AIA Singapore is working very closely with the authorities and will continue to review our policies to help ensure that insurance will remain easily accessible and that our customers' needs are addressed."

Industry players also stressed that the IPs are not competing against the basic plan.

NTUC Income chief executive Ken Ng said: "MediShield Life and Integrated Shield Plans will continue to serve Singaporeans in complementary ways, catering to different needs."

Mr Daniel Lum, director of product and marketing at Aviva Singapore, said premium rates for IPs change periodically as they are highly dependent on factors such as past claims experience and medical inflation. "These premium adjustments ensure that the premiums collected are sufficient to cover the amount of claims paid out," he said.

Great Eastern chief product officer Lee Swee Kiang said: "While some may choose not to continue with their IP, we do not expect a large percentage to do so and we will be proactively explaining and educating our policyholders on the importance of retaining their IP."

Prudential Singapore chief marketing officer David Ng said: "We are confident that even with the changes that are eventually made to MediShield, our policyholders will continue to enjoy the additional insurance protection that they are covered for."

What next?

All eyes are now on that critical premium number. It's been reported that the final submission from the MediShield Life Review Committee will be handed to the Government by the end of this month.

A debate on the proposed landmark changes will then be held.

Once that information is available, those with basic MediShield as well as the integrated plans can then sit down and work out their sums.

Ask pertinent questions such as whether you need to stay in a private ward, whether you can afford the premiums not just now, but in future.

If your company also provides health insurance coverage for you, check how best that complements the MediShield Life plan and then see if you need to upgrade to an integrated plan.

Remember though, that not every company-sponsored insurance plan has portable health benefits, so if you leave that firm, you may lose those benefits.

You would then have to start a new plan at an older age and possibly in poorer health, which will in turn mean higher premiums for your new health plan.

Policyholders want health-care providers and insurers to control any ballooning of medical costs, by controlling costs at the treatment and premium levels. The likely higher premiums will come on top of premiums which were already raised last year by IP providers, owing to the enhanced MediShield package that gave higher annual payouts, among other things.

However, Dr Khoo Kah Siang, president of the Life Insurance Association, told The Sunday Times: "There will be minimal impact on the IP component of premiums.

"For IP benefits, the premium rates are subject to change as per normal, taking into account claims experience, future consumption trend and medical inflation rate.

"IP insurers will continue to monitor and manage these factors, to ensure that their plans remain competitive and affordable."

Still, do compare across insurers and figure out which plan best suits your needs. It is after all, a matter of life and death.

How the Shield was forged
Sparks flew over issues such as deductibles, but the MediShield Life Review Committee and the Ministry of Health's number-crunchers together managed to pull off a bold new direction in national health-care coverage, as Insight finds out
By Salma Khalik, The Straits Times, 5 Jul 2014

IT TOOK seven months, 36 focus-group discussions, considerable burning of the proverbial midnight oil and some fireworks to produce the 116-page final report on MediShield Life.

And the only things the MediShield Life Review Committee chairman Bobby Chin is sure of, he says, are that "the journey has been very tough" and that the final report "does not deliver everything people want" - but is what he and his committee felt was best for all Singaporeans.

Delivering everything people wanted would have been impossible, says Mr Chin, former managing partner of international accounting firm KPMG Singapore and a member of the Council of Presidential Advisers.

The 1,700 people who attended discussions or sent in their views had asked for everything under the sun - reducing or removing deductibles (the portion people have to pay before insurance kicks in), better benefits, no-claims bonus for those who keep healthy, lower co-payment (the patient's share of the bill on top of the deductible) and even death benefits.

"Every single benefit affects premiums," says Mr Chin, and a prime directive was to ensure that premiums remained "affordable".

The 11-member committee comes from a mixed background, with only four with financial experience. The others include heads of hospitals, the labour movement and big business as well as grassroots leaders and welfare practitioners.

So most had a steep learning curve to educate themselves before they could contribute meaningfully to discussions."There was a lot of personal reading up. But within a month, everybody was up to speed," says Mr Chin.

Ms Janet Ang, managing director of computing giant IBM Singapore, recalls: "We needed to read up, but the (Ministry of Health) secretariat was very effective in getting experts to brief us." This included getting academics to talk about how other countries do it.

"All in all, I probably spent close to 100 hours working with this committee," she says, adding that she had put this work as "high priority" and tried to attend as many sub-committee meetings and public forums as possible.

Lawyer Abdul Rohim Sarip, who also spent close to 100 hours on this, says: "There was nothing easy about this job. One has to do lots of reading, firstly to understand the complex health-care system, to make sense out of all the policy decisions, and then to make recommendations."

He adds wryly: "I can say that I spent more time in this one committee in seven months than in all other committees I sit on in a whole year! And I sit on many committees."

The review committee was supported by a 23-member Ministry of Health (MOH) secretariat that provided information, did the number-crunching, typed up reports - and provided breakfasts, snacks and drinks at the 30 meetings held over weekends and evenings. This was on top of the 36 focus-group discussions. Says Ms Sinni Lim, assistant director of finance policy at MOH: "After seven months, we know the coffee preferences of the members."

Friction is inevitable with such intense work, but everyone involved is being diplomatic about it, now that it's a wrap.

Dr Tan See Leng, group chief executive officer of private hospital group Parkway Pantai, reveals: "There were many heated debates and constructive proposals which warranted long hours of consideration and discussions. There were also varying viewpoints but the bonding and camaraderie were exceptionally strong."

Mr Rohim recalls: "Some issues, we agreed on immediately, unanimously. But for some, there were strong debates, even arguments."

Mrs Oon Kum Loon, who is on the boards of shipping conglomerate Keppel Corporation and Singapore Power, describes the sessions as "robust", while Mr Patrick Lee, chairman of apparel manufacturer Sing Lun Holdings and Kwong Wai Shiu Hospital, says: "We had several healthy disagreements and debates."

From the secretariat, MOH's principal finance policy specialist Lee Shiao Wei says: "They did not take anything at face value, (and) were rigorous in scrutinising data, policy rationale and arguments for each proposal."

The CEO-level nature of the committee members' backgrounds proved a factor, with Ms Lee noting that individually and as a group, "this committee brings together a formidable combination of expertise and competencies. They would not simply 'accede'". But she adds that they were not "unreasonable".

Says Mr Chin: "We challenged them. We considered alternatives. We are people of standing. While they (secretariat) offered their views, ultimately, the decision rested with the committee. We must feel comfortable."

Mr Chin says the committee took a "building block" approach, as though building a house. It started by looking at the benefits it wanted, then at the other areas.

"After finishing the design of the house, we asked ourselves, 'Can we afford to build it?'" he says. The answer was "No", as having everything means premiums would go through the roof.

One of the first things dropped was the suggestion of removing or reducing the deductible, which committee member Diana Chia, president of the labour movement, had fought hard for.

The committee had not accepted the secretariat's word that it would be too expensive, and insisted on seeing the numbers. It was a subject of major debate, until the numbers were produced to show how even the slightest change has a huge impact on premiums.

"Then the decision was not difficult," says Ms Ang.

Reducing or removing the deductible - which currently starts at $1,500 a year (the deductible is cumulative, so once it is exceeded, insurance covers 90-97 per cent of the rest of the bill) - will mean that insurance would cover even small bills. Says Mr Chin: "We always reverted to the fundamentals of the scheme, which is peace of mind for large bills. Most people can afford the small bills."

The argument that convinced the committee was that deductibles are paid only by people who are sick, but premiums are paid by everyone, every year.

In fact, one member of the committee actually suggested raising the deductible to make premiums more affordable.

Another thing that was discussed and dropped was giving a "no-claims bonus" to people who stayed healthy and out of hospitals - the same way car insurance does. It sounded good, until the committee found that the vast majority of people would qualify, as only a fraction of the four million people eligible for MediShield Life would make claims.

Mr Chin says that in the end, everyone agreed that it didn't make sense as "you will have to pay higher premiums to pay for your own no-claims bonus".

But they did not just accept the secretariat's assurance that it would be too expensive. The intensity of the discussions meant some tense situations. When asked if it was true that he actually did not turn up for a meeting with MOH because he was upset, Mr Chin smiles, pauses and would only say: "In a way, it shows the independence of the committee."

He would not elaborate on what exactly happened or what had upset him. Indeed, now that the report is out, the committee is all praise for the support it received from the secretariat.

Parkway's Dr Tan says: "The secretariat was the most productive team I have worked with and they often worked into the wee hours of the morning turning around our suggestions and incorporating our feedback, including providing answers to some of the committee's difficult questions."

But as anyone on the committee will also admit, there is the next tough hurdle: The Government's job of getting buy-in and explaining the new scheme and all its fine print is only just beginning.

MediShield Life at a glance

MEDISHIELD Life will, for the first time, cover all Singaporeans and permanent residents from birth till death.

The main components:
- Deductibles: the portion people have to pay before insurance kicks in
- Co-payment: the patient's share of the bill on top of the deductible, which he can pay from his Medisave account or his own pocket
- Claim limits: the maximum amount that the patient can claim from insurance
- Lifetime limit: the cap on the total amount that can be claimed in a lifetime, which had been set at $300,000
- Integrated Shield Plans (IP): Optional plans sold by private insurers for hospitalisation in higher class wards and private hospitals

The MediShield Review Committee has recommended:

Better benefits than the current MediShield, with higher claims limits, no lifetime limit, and co-payment reduced from 10-20 per cent to 3-10 per cent. This means most people will be able to cope with big bills.
- Higher premiums, but with permanent subsidies of 15-50 per cent for two in three people. Transitional subsidies for four years for everyone facing an increase in premiums.
- An added premium of 30 per cent for new policyholders with existing medical conditions. This is to be paid for 10 years.
- A standardised B1 Integrated Shield Plan for people who want more than basic coverage. Better regulation of the IP market. Allow the five insurers to vary premiums for people with high risk.


MediShield Life Review Committee Report
MediShield Life Premium Calculator

Government accepts recommendations of MediShield Life Review Committee; announces $4 billion in subsidies and support for MediShield Life premiums

REACH MediShield Life microsite
REACH Contributors’ Questions on MediShield Life Answered - 
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Part 2: Premium Affordability

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