Keep MediShield Life simple

I AGREE with Mr Leong Kok Seng that the Government should not outsource MediShield Life to private insurers ("Say 'no' to outsourcing MediShield Life"; Thursday).

MediShield Life is supposed to be an insurance scheme targeted at providing lifelong and universal coverage for all Singaporeans, regardless of how their health circumstances change over time. It also helps to offset large health-care bills.

To decide if it is best managed by the Government or private insurers, it helps to look at the experience of allowing private insurers to offer ElderShield and the Medisave-approved Integrated Shield plans.

It is not clear if all private insurers will apply the same standard in processing claims. It probably makes sense for them to be more stringent, to minimise payouts and maximise returns.

In the case of ElderShield, actual payouts were less than projected but only half of the accumulated surplus was returned to policyholders in 2007, as allowed under the contract ("Rebates of between $10 and $260 for 770,000 ElderShield policyholders"; June 23, 2007). If ElderShield were run by the Government, all the surplus could be returned to policyholders.

Also, in a bid to create competition and options, private insurers were allowed to offer Integrated Shield plans, which created unnecessary confusion.

The premiums offered by insurers can differ greatly, and actual coverage and claim limits can also vary significantly. I am a banking professional and even I find it hard to gauge the most suitable plan for me and to understand the differences between the various plans.

Agents from private insurers will all claim that their companies offer the best plans, and some may recommend that their clients switch plans just to earn commissions for themselves.

Let's keep MediShield Life simple by not outsourcing it to private insurers. The Central Provident Fund Board has been managing MediShield for years; there is no reason why it cannot do the same for MediShield Life.

Jag Kuo Soon Yong

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