Many likely to quit private integrated plans: Expert

Many likely to quit private integrated plans: Expert

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.

This article was first published in The Straits Times on June 7, 2014.

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