Sunday 22 June 2014

Gan: Weigh Cost Benefits of Private Shield Plans

Important to choose 'appropriate' care rather than 'excessive' care
By Salma Khalik, The Straits Times, 21 Jun 2014

WITH MediShield Life expected to offer better payouts than the current national health insurance scheme, Health Minister Gan Kim Yong has urged people with private coverage to weigh up the cost benefits of maintaining it.

MediShield Life, which will cover all Singapore residents for life, is expected to start late next year.

In an exclusive interview with The Straits Times, Mr Gan said people with Integrated Shield Plans (IPs) should ask themselves if they really need a private plan, bearing in mind two things.

One is whether they can afford the premiums.

"Not just the premiums they are paying today, but when they get older," he said, adding that current ones provide a guide, but they are likely to change over the years.

"The main uncertainty is the development of medicine. New treatments, new regimes, new models of care can drastically change health-care costs."

The second important consideration, he said, is the class of ward people intend to go to should they fall seriously ill.

If they plan to seek treatment in a subsidised ward in a public hospital, then the basic MediShield Life should be sufficient.

Mr Gan said: "If your intention is to go for subsidised treatment, there is really no need for a private Shield plan."

But if people intend to stay in a private ward or hospital, they would be better off with an IP.

He also quashed fears that people could be forced to seek private care because public hospitals are currently bursting at the seams.

The minister promised that new hospitals, such as those due to open in Jurong later this year and in Sengkang by 2018, will meet the needs of an expanding and ageing population.

But he stressed that it is important for people to choose "appropriate" care rather than "excessive" care.

Two out of three people in Singapore have IPs offered by five private insurance companies.

These companies will need to make changes to their various plans to include the new premiums and claims benefits that will come when MediShield Life is introduced.

People with existing illnesses who are not currently covered by insurance will face 30 per cent higher premiums than others in their age group for 10 years when they join MediShield Life.

However, Mr Gan assured that there will be no such penalty for people who stay on an IP while they are young and the premiums are relatively low, and then downgrade to MediShield Life when they get older.

IPs already incorporate the basic MediShield insurance.

Although the MediShield Life Review Committee will submit its report to the Government at the end of this month, Mr Gan said it will take more than a year to implement the scheme due to the major shift in health-care financing policy and the structural changes it involves.

"This requires system changes both at the hospital and insurance level, as well as working with private insurers to make sure the interface is properly managed," he said.

"It is quite a complex scheme, and we need time to implement it properly."

Medisave sum 'goes further in new plan'
MediShield Life helps trim co-payment sums: Minister
By Salma Khalik, The Straits Times, 21 Jun 2014

PEOPLE who need serious or frequent hospital treatment will find that the money in their Medisave accounts will go much further under MediShield Life than it does today, Health Minister Gan Kim Yong said.

Singaporeans will pay higher premiums under the proposed lifelong insurance scheme. However, their share of big subsidised hospital bills will be much lower.

The MediShield Life Review Committee recommended that co-payment of bills be reduced from 10 per cent to 20 per cent today to 3 per cent to 10 per cent.

Mr Gan said: "The idea is that MediShield Life provides a larger coverage, so the amount you need to pay as co-payment comes down.

"All in all, because of the pooling effect of insurance, a patient's cost in total will be less."

He added that the Medisave Minimum Sum is "enough for premiums and co-payment of bills in subsidised classes", from the time of retirement until death for most people.

The Medisave Minimum Sum for people who turn 55 from next month will be $43,500 - up from $40,500 now. Although this minimum amount has been raised annually, the Central Provident Fund Board said that about six out of 10 active members consistently meet the sum when they turn 55.

In an exclusive interview with The Straits Times, Mr Gan said the increased MediShield Life premiums will be affordable for most people thanks to the various government help schemes.

These include the Pioneer Generation Package under which people aged 65 and older this year will have between 40 per cent and 60 per cent of their premiums subsidised permanently.

Singaporeans born in or before 1959 will get $100 or $200 in Medisave top-ups for five years.

Those who are working will get an additional 1 per cent Medisave contribution from their employers from next year. On top of that, two in three people will get a permanent subsidy to help them finance the new insurance plan.

There will also be four years of transitional subsidies - starting at 80 per cent of the increase in premiums in year one and tapering to 20 per cent in the fourth year - to cushion the impact of premium increases.

The entire premium can be paid for with Medisave money, so no cash top-ups will be needed.

Mr Gan added that the current cap of $800 to $1,400 on the amount of Medisave that can be used to pay for insurance premiums might have to be tweaked for some age bands.

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