Greater transparency needed on IP premiums

With the new MediShield Life scheme kicking in, I urge the Government to closely examine this matter of Integrated Shield Plan (IP) premiums, with an eye for more accountability and transparency from private insurers.

It was reported that two-thirds of Singaporeans and permanent residents (PRs) have Integrated Shield Plans ("Insurance agents taking tests on MediShield Life"; Tuesday, and "All will be able to afford MediShield Life premiums: Gan"; Sunday).

Given that 3.9 million Singaporeans and PRs automatically come under MediShield Life, and 340,000 people were not insured under the old MediShield, this means 2.37 million people have Integrated Shield Plans.

The five Integrated Shield Plan insurers are reported to have paid out a total of $488 million in claims last year.

However, if policyholders each paid about $600 in premiums (based on the median age of Singaporeans of 40 years and the estimated premium for that age), this means the insurers would have collected $1.42 billion.

This is a surplus over claims of $934 million.

In addition, it was reported that seven out of 10 people who own an Integrated Shield Plan, which entitles them to a higher ward, used a lower- cost ward instead ("Private insurers 'should offer a standardised plan'"; June 28, 2014).

Hence, how is the "extra" collected by the insurers factored into the premium increases?

Health Minister Gan Kim Yong has said that we should ask our insurance agents for an indication of premiums when we are in our 70s and 80s.

But such information is not provided by the insurer.

The current premium at age 80 is not a reflection of the premium in 40 years' time.

Are the Integrated Shield Plan insurers profiting at our expense?

Could the Government look into this?

Evelyn Tan-Leong (Ms)

This article was first published on November 5, 2015.
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