$4 billion boost keeps MediShield Life affordable

SINGAPORE - When the new MediShield Life scheme is implemented next year, almost all Singaporeans should either pay lower premiums than today, or face a small increase of less than $100 a year.

And those who want to upgrade coverage using Integrated Shield Plans (IPs) should be able to opt for a standardised IP that will provide coverage at B1-class level. These are among the key recommendations of the MediShield Life Review Committee which submitted its full report to the Ministry of Health (MOH) yesterday.

Accepting the recommendations, MOH said the Government will spend $4 billion over the next five years on subsidies for MediShield Life.

The 11-member committee was asked last November to come up with recommendations for a national medical insurance plan that will cover everyone for life, with better benefits than the current MediShield while keeping premiums affordable.

Benefits for the new MediShield Life scheme, announced three weeks ago, include raising daily and annual caps and removing the lifetime claims limit. This will halve the number of subsidised patients who, after insurance, have hospital bills of $3,000 or more a year - from nine in 10 to four in 10.

Yesterday, the committee revealed the schedule of premiums that go with these higher benefits.

"Premiums will go up because of better protection and coverage for all, but the Government will provide support to keep premiums affordable," it said.

Prime Minister Lee Hsien Loong also emphasised this in an interview with journalists in the United States, saying that "affordability should never be an issue".

This support will come in the form of permanent subsidies of between 15 and 50 per cent for thosewith a monthly per capita income of up to $2,600 - covering two-thirds of the population. The rest face higher premiums, but there will be transitional subsidies over four years to ease them into it.

MOH also promised to ensure that Medisave withdrawal limits can continue to fully cover MediShield Life premiums. It noted that the additional 1 percentage point employer Medisave contribution from next year will be sufficient to cover the increases in premiums for most households.

This means that almost all households will not need to dip into their Medisave reserves.

Yesterday, committee chairman Bobby Chin also pledged that the new premiums will not change for the first five years.

The committee also decided to look into IPs although this was not part of its mandate. It suggested that the Government improve the "existing regulatory and accountability framework" and mooted the idea of a standardised IP with uniform premiums pegged at the B1-class ward, with premiums fully payable with Medisave.

Mrs Hauw Soo Hoon, who headed the IP sub-committee, said: "We see runaway medical inflation, sometimes over-consumption, sometimes over-provision, and that is why the premiums keep going up."

Commenting on the committee's report, Dr Chia Shi-Lu, head of the Government Parliamentary Committee (GPC) for Health, said that it should give assurances to patients. "Our GPC will be engaging the public to see what they feel about the new premiums. However, the figures seem within the acceptable zone suggested by diverse segments of the public during our engagements," he added.

The Government will table the report in Parliament as a White Paper for debate next month.

salma@sph.com.sg

This article was first published on June 28, 2014.
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