Ensuring healthy outcomes for all

SINGAPORE -Singapore's 3M framework - now with the Eldershield component added - provides a reasonable foundation to build on, in the country's ongoing review of health-care financing.

Singapore does have a personal savings health account in Medisave. It also has a national insurance scheme in MediShield. For those who can't afford to pay, there is Medifund, while Eldershield pays for long-term care.

And still, Singaporeans pay more in out-of-pocket expenses than people in many other developed countries. Anxiety about heath-care costs remains high, as I found out from friends and readers who shared their experiences with me after reading some of my recent articles on health care in The Straits Times.

Patients want insurance cover that reduces out-of-pocket costs at affordable premiums. But an affordable premium may provide inadequate coverage. Meanwhile, insurers, due to limited safeguards protecting the patients, tend to cherry pick and reject the sick to maximise profits. The result: insurance that is affordable, but has lots of holes, leaving many uninsured or underinsured.

But in other mature markets, a better balance is struck between the interests of patients and insurance companies. This happens when the health insurance regulator is active in seeking better coverage for patients in addition to ensuring fiscal sustainability of the insurance sector.

Singapore can learn from other countries' best practices in health insurance, by adopting the following four pillars of universal coverage that is now inadequate in our system:

Mandatory coverage for all Singaporeans from birth

Singapore has done a lot to extend health insurance to cover babies from birth. All babies are now covered, including those born with congenital defects from March 1. However, the coverage remains optional and parents can opt out of coverage for their children. If the children want to come under MediShield in the future, however, their health needs to be assessed and they may be turned down if they have medical conditions. To sew up all the existing loopholes, it can be made mandatory to cover all Singaporean babies under MediShield. A mandatory insurance will also ensure housewives will be covered, another group often forgotten in our current scheme.

Portable health insurance

All too often, those without adequate personal health insurance find themselves not covered when they need it.

Many Singaporeans are covered by employers' health insurance plans. Depending on workplace health insurance alone is foolhardy, because people change jobs, are retrenched or retire.

You may not only lose your job but also your health benefits. And if you find yourself jobless, without health insurance at age 50 and happen to have a chronic disease like hypertension or diabetes, chances are that no insurer will sign you up.

Some more enlightened multinational and local employers do offer "portable health benefits". Instead of buying a separate workplace group health insurance which lapses when you change jobs, human resources departments offer the option of contributing to the employee's personal health insurance. This enables employees to buy a better policy with greater coverage which remains in effect even if he changes jobs. It also enables the employee to buy a better health policy with adequate coverage.

What's needed are tax or other incentives to prod employers to offer this as a default option.

'Many helping hands' approach to payments

Insurance premiums, and the risk of illness from factors like smoking and obesity, go up with age. There are many heartrending stories of seniors who paid their premiums when young but allowed their policies to lapse on retirement, only to discover they had no cover when they needed it.

Allowing the use of Medisave for premiums helps - but what happens when you hit the capped amount allowable? Or if Medisave is depleted after you stop contributing upon retirement?

The Japanese and many other countries adopt a "many helping hands" approach to the issue of lifelong insurance premium affordability. All workers in Japan have one health-care insurance plan. Over their working lives, the employer contributes to the workers' personal health insurance plan, co-paying some of the premium instead of buying a separate group health insurance plan which is often basic and duplicates what the workers may have. Some companies that want to do more can buy additional riders for their employees.

Perhaps this is what we need to ensure that all working adults have adequate and affordable health-care insurance. As some writers to The Straits Times Forum page have noted, there is a lot of duplication in insurance coverage, when the same worker is covered by MediShield, his employer's health insurance plan, and perhaps his private plan.

This "many helping hands" approach into one adequate and affordable insurance product will also address the concerns of many employers about the employability of older workers or workers with chronic disease.

The Government, too, can consider ring-fencing a portion of Medisave that is to be used exclusively for paying premiums, so patients don't deplete their Medisave and end up unable to afford premiums for coverage. The Government can top up Medisave to pay for premiums for the low-income.

Regulators like Monetary Authority of Singapore and Ministry of Health can work with healthcare providers and insurance companies to develop requirements that all Medisave-approved policies must adhere to. These could include guaranteed renewability and lifelong coverage.

The Government also needs to regularly share costs data with insurance companies for expensive diseases like cancer, strokes, hip fractures and dialysis that span not only hospital care but also outpatient and long-term care.

This allows insurers and actuarists to be more accurate in determining premiums. When insurers can calculate the statistical odds of a payout, they are more likely to be willing to insure higher-risk patients who can be asked to pay higher premiums than the norm. This is better than insurers rejecting coverage out of hand because of lack of risk data.

Regular premium reviews will also allow insurers and regulators to agree on premiums that reflect changes in health-care provision and costs.

Coverage of pre-existing diseases

Many insurance companies exclude those with pre-existing medical conditions from coverage. They also impose overly conservative exclusions: for example, if you have had a simple breast cyst removed, anything to do with the breast is excluded despite the fact that there is no significant relationship between simple breast cysts and breast cancer.

People with pre-existing diseases - such as diabetes or hypertension - may find themselves left out of health insurance once they get these conditions. Others who are already covered by basic MediShield, find themselves unable to upgrade after they are diagnosed with any illness.

Of course, buying enough insurance early will reduce the risk of pre-existing disease exclusion. Possible changes here could include the Government working with insurance providers to develop additional riders for Singaporeans with pre-existing diseases, with compulsory enrolment into chronic disease management programmes and incentives to remain healthy.

Medical care after all has progressed much. Not all diabetics end up with kidney failure, and not all with breast cancer end up dying of it. They are potentially insurable but this would require a change in mindset, with more innovative and advanced actuarial practices.

A changing world requires changing solutions. Those with pre-existing diseases of sufficient severity with end-stage complications such as diabetes with kidney failure can come under alternative schemes. They can buy catastrophic, specific illness insurance for diseases not related to their pre-existing one and helped under Medifund and other disease support programmes.

What is needed to bring about better insurance coverage through the four pillars of mandatory insurance from birth, portability, help with premiums, and pre-existing diseases coverage?

Perhaps we need a task force led by the two agencies that now oversee health insurance: the Monetary Authority of Singapore and the Ministry of Health. They can work with representatives from the Central Provident Fund Board, employers, unions, local insurance companies and reinsurers with overseas experience, as well as health-care providers and disease-patients advocacy groups such as the Singapore Cancer Society and Diabetes Society of Singapore.

Too many patients have suffered from lack of adequate insurance coverage. No review of health-care financing can be complete without serious inter-agency efforts to address the gaps. While the current basic MediShield coverage gap is only 8 per cent, there is a need to enhance it further for adequacy and affordability in a changing environment.

Illnesses strike unpredictably. That is what insurance is for, addressing the "what if" unpredictability of life. Ultimately it is for all of us as individuals, workers, employers, government and insurance providers to decide our future together, to address the issue of adequate and affordable health care, and peace of mind, for all amid life's unpredictability.


The writer is a geriatrician at Raffles Hospital and has headed geriatric medicine units in Changi and Singapore general hospitals.

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