Clash over MediShield premiums v payouts

Clash over MediShield premiums v payouts
Minister for Health Gan Kim Yong (Left), Dr Janil Puthucheary (Middle) and Non-Constituency MP (NCMP) Gerald Giam (Right).

SINGAPORE - Medishield premiums and its payouts were at the centre of a robust debate between Workers' Party Non-constituency MP Gerald Giam and the People's Action Party's Janil Puthucheary yesterday.

At the heart of it was Mr Giam's assertion that the Government was collecting more in premiums than it was paying out in claims for the national health insurance scheme.

The loss ratio on MediShield, he said, averaged just 63 per cent from 2001 to 2012. This meant that just 63 per cent of the premiums collected was paid out to those insured.

Mr Giam contrasted the figure to America's health insurance scheme - the Affordable Care Act, in which the government mandates a minimum loss ratio of between 80 and 85 per cent.

Dr Puthucheary (Pasir Ris-Punggol GRC) said this was not a valid comparison as it pit Singapore's public social insurance scheme against the US private and for-profit system.

He added that the American model was also not one to copy since "the short-term electoral outlook (there) significantly constrains their ability to take a long-term strategic vision for the health-care system of their nation".

He warned that if payouts ended up being higher than the premiums collected, it could see MediShield becoming "insolvent". This could lead to the scheme being "unable to support the health-care needs of a generation possibly".

Mr Giam countered that a "social insurance scheme (such as MediShield) should have a much higher loss ratio than a commercial insurance scheme because commercial insurance wants to make money".

He also said that it was "relatively easy" to project the likely payouts for medical insurance, and premiums could be adjusted to cope with the "increase in cost". If there was an emergency situation, like "Sars (severe acute respiratory syndrome) that year", the Government could step in.

Both Dr Puthucheary and Health Minister Gan Kim Yong argued against Mr Giam's claim that medical expense is easy to predict.

Mr Gan said it was "very difficult" to estimate health-care costs because of the variety of factors affecting it.

"Ageing is one aspect. Development of new technology is another aspect. Easy access would also drive up demand and demand will drive up costs," the minister said.

Dr Puthucheary added that it was because of the Government's prudent approach that when "something like Sars comes along", it is able to step in.

This article was first published on May 28, 2014.
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