Saturday 7 June 2014

MediShield Life Review Committee unveils recommendations on 5 June 2014

MediShield Life to offer much better benefits for all
Government subsidies and Medisave will cover new premiums, says panel
By Salma Khalik, The Straits Times, 6 Jun 2014

NINE in 10 subsidised patients will have their bills fully insured by MediShield Life, under new recommendations that the Government supports.

This outcome follows the higher claim limits and lower co-payments being proposed by a review committee, a change that will see the vast majority of these patients paying less than $3,000 a year for their big hospital bills.

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Even among those whose various bills add up to $10,000 or more a year, 55 per cent will pay less than $3,000 a year out of their Medisave or in cash, said Mr Bobby Chin, chairman of the MediShield Life Review Committee.

But with these changes, it is necessary for premiums to go up, he said yesterday when giving an update on the committee's work.

The premium amounts are still being finalised and will be released later this month.

But the committee recommended that whatever the premiums may eventually be, they should be affordable and continue to be fully payable within Medisave withdrawal limits and contributions. It also asked the Ministry of Health to analyse the impact of the indicative new premiums on lower- and middle-income households.

Here, it noted that the new premiums will remain within Medisave contributions, with no additional cash outlay needed. Most people will also be able to cover the rise in premiums with the additional 1 percentage-point employer Medisave contribution they will receive from next year.

Responding to the panel, the Government said it was supportive of the changes proposed and will bear most of the cost of bringing into MediShield Life those with pre-existing conditions.

To help Singaporeans with the premium increases, the Government said it will provide permanent premium subsidies to help up to two in three Singaporean households. The pledge means a household with per capita family income of up to $2,600 a month can expect the subsidy.

Those who are 65 years and older will get some subsidy for their premiums, regardless of their income levels, while people aged 80 and older will have their premiums entirely covered by subsidies and Medisave top-ups.

And everyone under age 80 when MediShield Life takes effect at the end of next year, regardless of income, will also get four years of "transient subsidies" to offset the hike in premiums.

Mr Chin, former managing partner of accounting giant KPMG, said people should not worry about how high premiums will rise, but focus on whether they will remain affordable.

He added that the panel's work has been "intensive, challenging, but certainly meaningful".

Formed in November last year, the committee held 30 meetings before reaching a consensus that struck a balance between higher premiums and affordability on one side, and sufficient cover for everyone for life on the other.

The most intensive discussions were on the trade-offs, Mr Chin said, explaining why some things people had asked for could not be included. Among them are lower premiums for those who stay healthy, and lower deductibles.

The more that is given, the higher the premiums. When this was told to people during the discussions, most preferred to be protected against large bills.

The committee therefore left the deductible intact - at between $1,500 and $3,000 - but reduced the co-payment from the current 10 per cent to 20 per cent, to 3 per cent to 10 per cent.

Explaining why the improved coverage will not fully cover the top 10 per cent of subsidised bills, Dr Tan See Leng, group chief executive officer of Parkway Pantai Group, who chaired the subcommittee on benefits, said these bills could be so large that including them would mean premiums have to go up "exponentially".

Still, they will get more insurance help than today, he added.

Dr Chia Shi-Lu, head of the Government Parliamentary Committee for Health, praised the committee for its "quite generous" recommendations. He said: "The better co-insurance terms mean less out-of-pocket payment for Singaporeans."

Most will be able to afford premiums without using cash
Subsidies, Medisave top-ups and extra employer contribution will help
By Salma Khalik, The Straits Times, 6 Jun 2014

PREMIUMS for the new MediShield Life will need to be raised substantially to meet the increased claim payouts being proposed by a review committee.

Still, most families can afford to pay the higher premiums with their annual Medisave contributions - without having to draw on their Medisave savings or cash.

For two-thirds of households - whose total monthly family income divided by the number of family members comes to about $2,600 or less - there will be permanent subsidies to offset the cost of higher premiums.

So a family of two parents and three children with the sole breadwinner earning $12,500 a month, would qualify for this permanent subsidy.

Details of the subsidy will be announced later, but it will be tiered, with lower-income households getting more.

On top of that, the Government will give permanent annual Medisave top-ups to the pioneer generation, who are Singaporeans aged 65 years and older this year.

These top-ups will offset substantially the higher premiums they will face.

In fact, for people aged 80 and older, the subsidies and top-ups will be enough to cover their entire premium. Younger people aged 55 to 64 this year will get five years' of Medisave top-ups.

In addition, everyone, regardless of age or income, will receive four years of "transient subsidies" to tide them over the initial increase in premiums.

Part of the higher premiums paid by younger people will be kept to offset the higher premiums they will need to pay when they get older. This offset now starts when a person reaches age 70.

The committee has suggested bringing this forward to age 65, when most people would have stopped working.

The premium offset ranges from $30 to $449 a year, based on age of entry into the existing MediShield, or the future MediShield Life.

One big change that MediShield Life will bring is the inclusion of everyone, even those who are already sick.

But including them in the national insurance scheme will mean many of them are likely to make claims, some from the moment they are included. It would therefore not be fair to bring them in at the same premium level as people who have been on the insurance scheme for years.

Mr Bobby Chin, chairman of the MediShield Life Review Committee, said they pose "really high risks and costs" to the MediShield Life Scheme.

"If you have a pre-existing condition, it's only fair that you pay (more) for coming into MediShield Life," he said.

The committee suggests they pay an additional 30 per cent on top of the premiums for their age group, for a period of 10 years.

But this will not be enough to cover what they will cost the insurance scheme in claims.

So the committee is also asking all existing MediShield members to "pay a little bit more in sharing the costs of bringing in those with a pre-existing condition".

But again, getting existing members to pay in full the rest of the cost would be "too onerous", so it is capping the help from everyone else to no more than 3 per cent of their current premiums.

Together, what the new and existing members pay will not cover even half the estimated cost of bringing in people with pre-existing illness, said Mr Chin.

So it appealed to the Government, which has agreed to underwrite the rest of the cost.

Said Mr Chin: "The committee is really heartened that the Government has agreed to take on most of the costs of bringing in those with pre-existing conditions."

Enhanced benefits proposed for MediShield Life
Panel urges raising claim limits, extending coverage, reducing co-insurance rates, but premiums could double
By Neo Chai Chin, TODAY, 6 Jun 2014

After months of dialogues and discussions, the MediShield Life Review Committee yesterday recommended substantial increases in benefits for the insurance scheme that will cover all Singaporeans for large hospital bills from the end of next year.

Many of the claim limits will go up: Besides the removal of the S$300,000 lifetime claim limit, the committee recommended higher daily claim limits for normal and intensive-care wards in acute hospitals and for community hospitals.

Outpatient cancer chemotherapy and radiotherapy treatments could also have higher claim limits, as could surgical procedures. Premium rebates will start earlier at the age of 66 if the committee has its way.

Under MediShield Life, nearly six in 10 B2 and C Class patients with large bills exceeding S$10,000 will pay less than S$3,000, in Medisave and cash, from only one in 10 today.

Coverage will also be extended to those aged above 90 or with pre-existing conditions.

Premium details are still being fine-tuned and will probably be released in the panel’s final report at the end of this month. However, premiums for some households could more than double, from indicative examples shown yesterday.

The Government will provide subsidies for the bottom two-thirds of households here, as well as transitional subsidies for the first four years of MediShield Life.

The additional 1 per cent in Medisave contributions by employers from next year will also be sufficient to cover premium increases for most people, the committee said yesterday.

Trade-offs in deriving a balance between enhanced benefits and affordable premiums were the subject of intense discussion, committee chairman Bobby Chin revealed.

After deliberation, the recommendation was made to raise claim limits and reduce co-insurance rates, as well as leave deductibles — the amount patients have to pay before insurance kicks in — untouched.

All three elements have significant impact on premium levels, said Mr Chin. Many people said they preferred to protect themselves against very large bills, which would be addressed by lower co-insurance and higher claim limits.

They also preferred to pay lower premiums on a regular basis, rather than lower deductibles, which would be felt only if they are hospitalised.

Asked why there were no premium rebates recommended for those who maintain good health, Mr Chin said this would result in higher premiums. The committee also did not want people to forgo necessary medical treatment just to get a no-claim bonus. “We want to encourage good lifestyles… but not through the MediShield framework,” said Mr Chin.

For those with pre-existing conditions, the committee is recommending that they pay 30 per cent more in premiums for 10 years. Other policyholders will pay no more than 3 per cent from current premiums for the purpose of bringing those with pre-existing conditions into MediShield Life. The Government will bear the bulk of costs of universal coverage.

Another reason for higher premiums is the need to pay more while one is still working to keep premiums affordable in old age.

Mr Chin said his committee would make some observations on portable medical benefits and Integrated Shield plans — private insurance offering benefits in addition to MediShield — in the final report.

The Ministry of Health said it would finalise government subsidies and provide details at a later date. It will ensure Medisave withdrawal limits are sufficient for all MediShield Life premiums.

Healthcare policy expert Phua Kai Hong of the Lee Kuan Yew School of Public Policy said the higher-middle-income households, especially those with younger grandparents, could be concerned about the increase in premiums as they could receive a lower level of subsidies.

Dr Jeremy Lim, partner and head of Asia Pacific Region, Health & Life Sciences at Oliver Wyman, said although the percentage rise in premiums is large, the public should not be unduly alarmed if the increases are justified. “For those of us unfortunate enough to be hospitalised or need healthcare, we know the out-of-pocket will be smaller because of improved benefits,” he said.

Mrs Lee Siu Hong, an exam lecturer in her 50s, welcomed the recommended changes. “When you want an upgrade, you have to be prepared to pay for it,” she said of the increasing premiums. “We should look at the long-term effect instead of worrying about what we have to pay now, and I think we’ll be fine.”

Additional reporting by Kok Xing Hui and Jordan Skadiang

Lower out of pocket payments for big bills
By Linette Lai, The Straits Times, 6 Jun 2014

OUT of pocket payments for major hospital bills could be cut by as much as half, following a review committee's recommendations for MediShield Life.

This includes treatment for common conditions such as cancer, stroke and heart attack, which often result in long stays and large bills.

At least nine out of 10 subsidised patients - those staying in B2- or C-class wards - will be fully insured, said MediShield Life review committee chairman Bobby Chin.

This means they will have to pay less than $3,000 in cash or money taken from their accounts in the national medical saving scheme Medisave, even though their bills may be substantially higher.

The committee's recommendations also mean that patients can make larger claims than before, and that insurance will pay for a larger share of the bill.

These changes, said Mr Chin, would be most effective at targeting large hospital bills where out-of-pocket payments are the chief concern.

"It's more critical to focus on enhancing protection for the large bills that cause Singaporeans to worry, which are most difficult for us to plan and save up for," he said.

The committee gave the example of a typical heart attack patient.

After 10 days in a B2 ward, his bill would come to $8,100. About four out of 100 bills of all subsidised patients fall in this range, the committee said.

With the existing MediShield claim structure, the patient would have to pay $4,655 - more than half the bill - out of pocket.

Under the new compulsory health insurance scheme, however, he would pay only $2,455.

The new claim limits also mean that those undergoing outpatient treatments for cancer, such as chemotherapy or radiotherapy, would pay substantially less.

Currently, six in 10 patients pay less than $1,000 in cash or through Medisave per treatment cycle.

Under MediShield Life, the proportion of such patients would increase to eight in 10.

These changes will make a difference to cleaner Kamla Somu, 63, should she need further cancer treatment.

Two years ago, when she was diagnosed with breast cancer, she went through four chemotherapy cycles, and had to fork out about $2,000 from her Medisave account. This was after she had pawned her jewellery to pay $5,000 for surgery.

After MediShield Life kicks in, someone in her shoes would end up paying around $700 for the chemotherapy.

And those who rack up large hospital bills of more than $10,000 will also receive additional help, the committee said.

Now, only one in 10 pay less than $3,000. This will go up to six in 10 people.

Dr Chia Shi-Lu, head of the Government Parliamentary Committee for Health, noted that the improved benefits mean that Singaporeans will have to pay less from their Medisave accounts.

This, together with increases in employer Medisave contributions, mean that people should have enough in their accounts, he noted.

Mr Alfred Chia, chief executive of financial advisory firm SingCapital, also welcomed the proposed changes.

"MediShield has too many limitations," he said.

"MediShield Life is definitely a marked improvement from our current system."

Lecturer who battled cancer cheers proposed changes
By Kash Cheong, The Straits Times, 6 Jun 2014

PART-TIME lecturer Ng Lee Meng had a brush with colorectal cancer almost 20 years ago and her surgery bill was more than $10,000.

It was covered by her company's hospitalisation insurance.

But the 63-year-old, who lives with her husband Ng Kwai Yew, 64, and daughter Shuying, 33, knows others who are not as lucky.

"Some older folk refuse treatment just because they do not want to be a burden to their families," said Mrs Ng, whose household income is about $6,000.

The higher amount patients can claim for outpatient cancer treatment, under the proposed MediShield Life scheme, is thus music to her ears.

Previously, cancer patients could claim $1,249 for one 21- or 28-day cycle of chemotherapy per month.

Under the recommendations, they can claim up to $3,000 per month. Radiotherapy claim limits have also been raised.

Previously, Mrs Ng was not covered by MediShield as she had a pre-existing condition. But under the proposed MediShield Life, she would be covered. "It used to be hard to get insurance as a cancer patient, so universal coverage really helps," she said.

"This is really good news to me," she said.

Good news all round - pay less as bill grows
By Salma Khalik, The Straits Times, 6 Jun 2014

HOW should one interpret the proposed claims benefits revealed yesterday as part of the new MediShield Life scheme?

Well, patients still need to pay the initial $1,500 to $3,000 of hospital bills accumulated within a year - what is known as the "deductible". That, I think, is reasonable as the new national insurance scheme is meant to help with big bills.

But beyond that initial deductible, it was generally good news all round. What patients must co-pay beyond the initial deductible has gone down from 10 to 20 per cent to a lower 3 to 10 per cent range, with patients paying less as the bill gets bigger.

Claim limits for certain procedures have also been increased, most notably for chemotherapy and radiotherapy to treat cancer, where they have more than doubled for bigger bills. Again, this helps people with large bills, as it will mean insurance will be able to cover more of their bill.

But the most fantastic news, especially for people who have reached, or will soon be reaching, the lifetime cap on claims of $300,000, is the committee's decision to do away with it altogether.

Such a cap defeats the purpose of MediShield Life which is meant to cover everyone for life.

Of course, better coverage comes at a cost. To pay for the higher claims, premiums must go up.

To cushion the impact, the Government has indicated that it will provide a suite of subsidies, ranging from permanent ones for low- to middle-income households to temporary ones to help phase in premium increases for the general population.

The committee has not yet revealed what it is recommending for the new higher MediShield Life premiums, nor the full extent of these offsetting subsidies. But it gave some indication, using four household archetypes, which seem both promising and generous.

The specifics will be keenly anticipated, but the committee has given the assurance that premiums for almost all households will remain within Medisave contributions, with no additional cash outlay needed. It also noted that the additional 1 percentage point employer Medisave contribution will be enough to cover the increases in MediShield Life premiums for "most people".

Aside from that, Singaporeans will also ask: What is the effect of these changes on people with integrated plans (IPs) that incorporate MediShield? After all, almost two in three of them are on IPs.

IPs are essentially health insurance plans stacked on top of the basic MediShield plans. They are a sort of "MediShield Plus": Pay an extra premium and get higher payouts, better class of stay in hospitals and higher coverage.

Those on IPs may argue that when the basic MediShield payouts are enhanced, there will be no need to pay a single cent more in total premiums. This is because the additional MediShield payouts are already part of the higher "stack of benefits" they are currently paying for.

But a statement by the Life Insurance Association, representing the five insurers offering IPs, indicated that there would be some increase, promising it would be of "minimal impact".

What other wider outstanding issues are there?

Yesterday, the committee revealed the top concerns of people at various focus-group discussions. The No. 1 issue was a generally poor understanding of the health insurance system. This led to another top concern: that somehow, out-of-pocket costs would be very high even after insurance payouts.

This lack of understanding is something that the Government must tackle if it wants to convince the population that it is making strides in solving the hot-button issue of health-care affordability in a fast-ageing society where the cost of medical care is popularly perceived as being high.

It may eventually require a more fundamental relook of the whole system, with a view to simplifying it considerably.

But that is another review by another high-powered committee for another year, hopefully not too far down the road.

NTUC 'fully backs' MediShield Life changes
Revised version would sit well with the Portable Medical Benefits Scheme: Swee Say
By Michelle Quah, The Business Times, 7 Jun 2014

THE Secretary-General of the National Trades Union Congress (NTUC) has reiterated the labour movement's support for the recommended changes to the MediShield Life scheme announced this week.

Lim Swee Say said, however, that the labour movement was awaiting more details on how the changes would affect the premiums for this national insurance scheme that will give life-long coverage to Singapore residents.

He added that the revised version of MediShield Life would sit well with the Portable Medical Benefits Scheme (PMBS), which the labour movement has been pushing for.

Mr Lim, speaking to reporters yesterday on the sidelines of the NTUC's Future Leaders Summit, had been asked to elaborate on the statement NTUC put out on Thursday, in response to the recommendations for changes to MediShield Life.

The MediShield Life Review Committee (MLRC) had on Thursday suggested, for example, extending coverage to those with pre-existing conditions, substantially increasing claim limits, especially for outpatient chemotherapy and radiotherapy treatments for cancer, and starting premium rebates from age 66 instead of 71.

The government has accepted the recommendations.

With claim limits to be raised and co-payment to be lowered, premiums are expected to rise, but the government has pledged to ensure that Medisave withdrawal limits will be sufficient for all MediShield Life premiums.

The NTUC had on Thursday issued a statement supporting the recommendations, but asked that the scheme maintain its relevance.

To reporters yesterday, Mr Lim stressed that the labour movement was "in full support" of the recommendations.

"The recommendations (of the MLRC) are very much welcomed by the labour movement and by workers. Firstly, all workers and their parents will be able to join MediShield Life, regardless of age, health or status. Secondly, the coverage is for life. And thirdly, the co-payment component (to be paid by patients) has been reduced significantly," he said.

He added, however, that workers were concerned about whether and by how much these changes would raise MediShield Life premiums, and whether they would be able to afford the cost of being covered.

"But, what was said (on Thursday by the government) that was quite reassuring was that, even with the increase in premiums, with the one percentage-point increase in Medisave contribution (by employers) from next year (and various government subsidies and Medisave top-ups), most families will be able to pay for the new premiums using their Medisave and without having to come out with cash. This is very reassuring to workers, but we look forward to more details," Mr Lim added.

He also pointed out that the recommended changes to MediShield Life would mean more duplication of terms and benefits between that scheme and company-based group insurance. Companies should thus make adjustments to their group insurance schemes so they are a better complement to MediShield Life.

He added that the PMBS could work as a bridge between MediShield Life and companies' group insurance schemes.

"We believe the introduction of MediShield Life is very timely (in that it allows) us to refocus on our objective of introducing the PMBS. The labour movement has been promoting and advocating this for some years, but the response has been fairly limited.

"Now, with the recommended changes to MediShield Life, the duplication (between company insurance and MediShield Life) is even greater; it gives us more scope to reduce the duplication, and thereby make the whole healthcare benefits system more affordable and more attractive to our workers."

At the Future Leaders Summit, Mr Lim also spoke on the challenges facing PMEs (professionals, managers and executives). Among these is the need for PMEs to change jobs - not because they are lured by better wages and career prospects - but because the economy is continually upgrading.

He said that to prepare for their future, PMEs should not only acquire deep vertical skills; they should also focus on "second skilling" and "horizontal skilling".

"It is better for our PMEs to not only know many things about something, but also to know something about many things," he said.

NTUC to renew push for portable medical plans
With MediShield Life, firms can help staff pay for such schemes, it says
By Toh Yong Chuan, The Straits Times, 7 Jun 2014

WITH MediShield Life benefits now greatly enhanced, companies should seriously consider taking the money they budgeted for group insurance premiums and give it instead to workers individually, the labour movement suggested yesterday.

This could take the form of both Central Provident Fund contributions, which will enable their staff to pay for MediShield Life premiums, and cash, to allow them to upgrade to privately run Integrated Shield plans that offer even higher insurance coverage and hospital stays in higher ward classes.

"This avoids duplication and even wastefulness," said labour chief Lim Swee Say, speaking on the sidelines of a union event yesterday. The other advantage is that workers will still get to enjoy insurance coverage even after they quit, he added.

This type of arrangement is known as a portable medical benefits plan, and Mr Lim said the National Trades Union Congress (NTUC) will be making a renewed push to promote it.

But the NTUC secretary-general also acknowledged that while the idea is attractive, the lack of monetary incentives to make firms implement it is an obstacle.

"It will not help firms save money, but neither will it add to their costs," he said.

MediShield Life is the new national health insurance scheme to be rolled out next year. It will cover all Singaporeans for life, including those with pre-existing health conditions that previously could not be insured.

A high-level review committee recommended on Thursday that the scheme's benefits also be enhanced to further reduce the size of big medical bills, especially for serious illnesses like cancer. The Government has said it supports the proposals, and will roll out subsidies to help the public pay for the higher insurance premiums.

The NTUC first mooted the idea of portable benefit plans as early as 2000, but it has not had much success in coaxing companies to adopt them.

Only 17 out of 1,400 unionised companies in the private sector provide portable medical plans for their staff. Mr Lim suggested that some form of tax incentive may help to get more firms to sign up.

The civil service, Singapore's largest employer with 80,000 staff, introduced a form of portable medical plan in 1994.

Recruits after April 1994 get an extra 1 per cent of their monthly salary paid into their Medisave account, which they can use to buy private hospitalisation plans. Eight in 10 civil servants are now covered under the scheme.

Checks with insurers found a handful of portable medical insurance plans based on MediShield.

NTUC Income introduced such a plan in 2006, but would not say how many companies or workers have adopted it. Its chief executive Ken Ng said the insurer will review its products after the Government accepts the MediShield Life recommendations.

Meanwhile, employers said that while they generally welcome the idea of giving staff portable medical insurance, much depends on how it is implemented.

Home-Fix managing director Low Cheong Kee said: "We are open to the idea, but it depends on costs and whether employees are able to use the money for their own medical needs."

The company already provides its staff with paid medical leave, hospitalisation and life insurance coverage.

MediShield Life to cushion impact of big hospital bills
All Singaporeans will be covered for life by the new scheme
By Linette Lai, The Straits Times, 7 Jun 2014

WHEN Mr S. Kalleychelbon had a heart attack, his health was not his only worry.

After heart bypass surgery and two weeks of recovering in a B2-class ward in 2010, he racked up a hospital bill of about $20,000.

The operations manager had no insurance coverage - not even the basic MediShield.

His wife, a childcare teacher, and daughter, who was about to graduate from university, had to chip in to pay the amount in full.

"At that time, we really never thought of insurance," the 57-year-old lamented. "My daughter was still schooling, so we had a lot of other things to think about."

However, when MediShield Life kicks in next year, someone in Mr Kalleychelbon's shoes will bear a lighter burden.

All Singaporeans will be covered by the scheme for life, leaving no one without at least basic insurance coverage.

Patients will also be able to make larger claims than before, cushioning the blow of large hospital bills arising from common conditions like stroke or cancer.

Such bills are major concerns for many, said principal medical social worker Tan Boon Cheng, who works for the National Heart Centre Singapore.

"Some patients may not be financially prepared to cope with the hospital bill," she said, adding that many may run out of money in their Medisave accounts or reach the maximum withdrawal limit. "That is when they have to make cash payments, and some may find it hard to manage."

The cost of outpatient chemotherapy and radiotherapy treatments, for example, can run into the thousands.

Ms Anna Li, 40, paid nearly $15,000 in total for both treatments after she was diagnosed with breast cancer last year.

This was in addition to bills for doctors' consultations and tests to ascertain the right treatment.

The majority of her bills were paid for by Medisave and Medifund, or were claimable under MediShield.

"I am very lucky that I got medical assistance and, so far, I have not forked out any cash," Ms Li said. "But not all patients have managed to get that."

Under MediShield Life, cancer patients undergoing these treatments could pay less than half what they are paying now.

But better coverage means premiums will go up, although two in three Singaporean households will be eligible for subsidies to help with the increase.

The MediShield Life Review Committee also proposed that premium increases should be capped at 3 per cent for those currently insured under MediShield.

One man looking forward to next year's changes is Mr Jag Kuo, whose 74-year-old father was recently diagnosed with lung cancer.

Last year, his father was also warded for a lung infection for nearly a month and ran up a final bill of close to $10,000. Most of this was paid for using his father's Medisave funds.

"The bill for us was manageable," said the bank compliance officer. "But it was still a substantial amount."

Mr Kuo, 35, knows premiums will increase, but still welcomes the additional coverage.

"After all, everything comes with a price," he said.

Many likely to quit private integrated plans: Expert
By Salma Khalik, The Straits Times, 7 Jun 2014

WITH MediShield Life providing far better coverage for big hospital bills, expect a significant number of people to terminate their Integrated Shield plans, said Associate Professor Phua Kai Hong of the Lee Kuan Yew School of Public Policy.

The improved terms that MediShield Life offers mean that it will be sufficient for many, he added, though some told The Straits Times that they would keep their private plans.

Today, two in three are on these private integrated plans (IPs), but Prof Phua foresees a shift in this balance.

Insufficient cover for big hospital bills was a big reason for the popularity of these plans, he noted. But with MediShield Life removing the lifetime limit on claims, this has become less of an issue.

Prof Phua also noted that most older patients seek treatment in subsidised wards, and MediShield Life's terms are good enough to cover this.

He added that many older folk could find the premiums for IPs beyond their means. Depending on the plan, the premiums could exceed $8,000 a year. He said: "The discerning consumer will ask, why do I need to buy extra?"

Meanwhile, many of the more than two million people who have IPs are asking what impact the higher premiums and claims from MediShield Life will have on their insurance plans.

Even Dr Chia Shi-Lu, head of the Government Parliamentary Committee for Health, said: "Unanswered issues include the question of integrated plans. Our GPC will continue to look at this closely."

Many policy holders recall the revision of MediShield last year which, in some cases, led to disproportionately high premium increases for IPs.

Others wonder why the Life Insurance Association spoke of "minimal impact" when there should be no impact at all.

This group argues that though the basic Shield premiums go up, they are accompanied by healthy increases in claim payouts.

Therefore, the two negate each other and should not result in any changes to IPs.

All will become clearer later this month as the MediShield Life Review Committee is currently in talks with the five insurance companies providing IPs.

But for some, whether the premiums go up by a lot or not will not make a difference.

Financial services manager Kelvin Ng, 26, said he would definitely not drop his IP with insurance provider Aviva in favour of MediShield Life.

He has a rider which covers the co-insurance and deductible he would have to pay in the event of a large hospital bill.

"Under it, I am also fully covered up to the private hospital level," he said. "Why would I want to downgrade?"

Stockbroker Gary Goh, 35, also believes in staying with his IP, and the current bed crunch is one major reason. He said: "It covers me for B1- and A-class wards. If B2 and C are crowded, at least I have the option of getting a bed in these wards."

The fact that MediShield Life will have an annual limit, currently set at $100,000, is another reason, he said.

Plans get thumbs-up for easing worries about medical bills
By Kash Cheong, The Straits Times, 7 Jun 2014

POLITICIANS, health experts and financial planners voiced support for the proposed MediShield Life scheme yesterday, saying it will ease Singaporeans' worries about large health-care bills.

Many said they particularly liked the proposal to do away with the lifetime claim limit of $300,000.

"The removal of the lifetime claim limit would really benefit those who are getting sicker at a younger age," said Madam Halimah Yacob, chair of the PAP Seniors' Group Committee. She called it a "timely measure" given that people are living longer.

Dr Paul Tambyah, president of the Society of Infectious Diseases, agreed. "This will benefit individuals who have severe congenital chronic diseases... who need thousands of dollars worth of treatment every month," he said.

Dr Chia Shi-Lu, chair of the Government Parliamentary Committee for Health, liked the scheme's inclusion of people with pre-existing illnesses who previously could not be insured or had to pay huge premiums.

Under the proposals, people with pre-existing conditions will have to pay premiums of an additional 30 per cent for 10 years to reflect their higher risks.

Said Dr Chia: "The increase seems fair, considering that these patients would normally otherwise be uninsurable."

The Government, he noted, will bear most of the cost of insuring them without "passing on the burden to the rest of the pool". The new scheme would result in "peace of mind for patients and less out-of-pocket expenses", he added.

Financial planners hailed the MediShield Life for decreasing the financial burden of hospital bills on Singaporeans, especially since it will not result in an unaffordable increase in premiums.

But financial advisory firm SingCapital's chief Alfred Chia noted the scheme is still new and further changes could be in the offing. "Going forward, we need to monitor how many people claim and see how premiums will further be adjusted," he said.

Health economist Phua Kai Hong suggested more regulatory mechanisms on health-care providers to ensure higher claims ceilings are not abused.

"We have to take care that money does not go down the drain on treatments that we do not need," he said.

Madam Halimah urged the Government to consider a tiered withdrawal scheme for Medisave.

She suggested that older Singaporeans, depending on their age, be allowed to withdraw more funds for outpatient treatment than their younger counterparts.

Currently, the limits on withdrawals are the same for all ages.

"Some seniors said that they wanted greater flexibility for more claims as they were earning very little and a lot of money was tied up in their Medisave," she said.

Dr Tambyah wondered if the deductible amount that patients have to bear - the first $1,500 to $3,000 of hospital bills accumulated within a year - could be reduced further.

"The deductible should be cut to reduce the burden of the older generation, some of whom may have many smaller bills, which are nonetheless significant to them," he said.

In a statement, the Workers' Party said it welcomed the MediShield Life Review Committee's recommendations, but added that "many" of the proposals were articulated by the party's members in Parliament as well as by many Singaporeans over the years.

They include adjusting co-payments and claim limits to ease health-care costs, and permanent premium subsidies for vulnerable groups. "We will further study the details of the committee's recommendations and respond when Parliament debates these changes," said the party.

How the changes make a difference
By Salma Khalik, The Straits Times, 7 Jun 2014

I am confused: How much of my hospital bill does MediShield cover?

MediShield claims are based on all the hospital bills you get in an entire policy year. All claims are first subject to a maximum (called the "claim limit") that you can claim for different services - for example, no more than $450 a day in a normal ward, but up to $900 a day in intensive care.

Of this amount below the claim limit, you first have to pay what is known as the "deductible", which ranges between $1,500 and $3,000.

Of the amount above this deductible, you co-pay 10 per cent to 20 per cent. This is sometimes referred to as "co-insurance".

MediShield then pays the rest of the 80 per cent to 90 per cent. In the diagram (top), the area in grey is the portion you pay and green is what the insurance pays.

So, what will change with MediShield Life?

Your share of big bills - in grey - goes down.

I am on an integrated shield plan. Will I be entitled to the government subsidies?

The Government will give subsidies to middle- and lower-income households, roughly those whose total family income divided by the number of people in the family is $2,600 or less.

If you qualify, you will get the subsidy, regardless of the type of medical insurance you have.

That aside, everyone will receive four years of subsidies once MediShield Life begins next year.

If you are in the pioneer generation, you will also get the pioneer generation subsidies, regardless of your income or type of insurance coverage.

I was not eligible for MediShield before. How do I sign up for the new scheme?

You will be automatically included when MediShield Life starts. If you were excluded for medical reasons (for example, former cancer patient or diabetic), you would need to pay 30 per cent more in premiums every year for the next 10 years, but you will be able to claim against the insurance as soon as you are signed up.

If MediShield Life gives such good medical coverage, should people give up their integrated shield plans with their higher premiums?

Integrated shield plans are policies that provide additional benefits beyond MediShield Life coverage. Whether you want to keep your integrated shield plans with higher premiums depends on the hospital ward you are likely to choose. If you plan to go private, then you will need such a plan catering to private hospitals or private wards in a public hospital.

But if you plan to go for subsidised hospital services, then MediShield Life should be sufficient.

If I have only MediShield Life and stay in an A-class ward, will I be covered?

MediShield Life will cover the amount it would for a B2 patient. With MediShield Life, the coverage will be higher than now - but will not be able to pay the bulk of your bill.

If you plan to use A-class service, it is best to get an integrated shield plan for that class.

As MediShield Life will cover most of the hospital costs, and government subsidies will help pay the premiums, is it not pointless to have so much in Medisave?

Aside from premiums, you would still need to pay the deductible of $1,500 to $3,000 a year.

If, for some reason, you need to be in and out of hospitals every year for 10 years, it would mean $15,000 to $30,000 just in deductibles alone.

There is also the co-payment of 3 per cent to 10 per cent.

On top of that, you are allowed to draw up to $400 a year from your Medisave account to control chronic ailments, vaccination and basic health screening.

While healthy people might not need that much, the majority are likely to need it. Studies show that 80 per cent of health-care expenditure is usually spent in the last years of life.

For more information on MediShield Life, go to

For comparison of MediShield and the various integrated plans, go to

MLRC Recommends Significant MediShield Life Enhancements -5 Jun 2014

Government welcomes recommendations by MediShield Life Review Committee; commits support for MediShield Life premiums -5 Jun 2014

MediShield Life Benefits

How much do Families have to Pay?

MediShield Life: Health Minister Gan assures S'poreans over premiums

Granting of MediShield Life premium subsidies will be "hassle-free": Amy Khor

MediShield Life will 'better protect against large bills'

Gan: Weigh Cost Benefits of Private Shield Plans

MediShield Life Q&A

MediShield Life FAQs

MediShield Life Premiums Unveiled -27 Jun 2014

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 -27 Jun 2014

Factsheet on the MediShield Life Scheme Bill

Refuse to pay MediShield Life premiums? You could be jailed

MediShield Life Scheme Bill Passed Into Law on 29 January 2015

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