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SINGAPORE – MediShield Life premiums should be adjusted to keep the scheme “solvent and sustainable”, said Minister of State for Health Koh Poh Koon in Parliament on Monday (Nov 2), following recommendations from a panel to increase premiums up to 35 percent for some policyholders.
“The premiums collected have to cover current and future potential payments, including amounts set aside to support future commitments, as well as provide a buffer against unforeseen contingencies, such as unexpected spikes in hospitalizations due to disease outbreaks,” he said in responding to the questions from Members of Parliament.
In late September, the Ministry of Health (MOH) announced that the MediShield Life Council had recommended increasing premiums, citing the need to support improvements to the scheme and keep up with rising health care costs and claims.
Launched in November 2015, MediShield Life is a basic health insurance plan for citizens and permanent residents that helps beneficiaries pay for large hospital bills or expensive outpatient treatments.
Dr Koh said the government had considered delaying the MediShield Life review and “consequent premium increases” due to the economic impact of the COVID-19 pandemic, but decided it was more important that the plan could “meet their obligations in time to come when policyholders make claims ”.
However, he added that the government will provide a COVID-19 subsidy for all citizens for the next two years, which will pay for most of the premium increase in the first year. “In conjunction with existing subsidies and premium support, net premium increases for all Singaporeans will not be more than approximately 10 percent in the first year after the MediShield Life review is implemented.” Dr. Koh said.
Factors driving the increase
In his speech, Dr. Koh highlighted three factors driving MediShield Life premiums: the increase in the number of claimants and amounts paid; updating the claims limits; and support improvements to plan benefits.
“The number of claimants has increased by approximately 30 percent and annual payments have increased by approximately 40 percent over the past four years,” he said.
Dr. Koh added that, between 2001 and 2019, the average bill for hospitalization in government health institutions has increased by about 6 percent a year on average, largely due to “inflation of medical costs, the demographics and medical advances over the years “.
“This growth in utilization and payment accounts for approximately two-thirds of the premium increases,” said Dr. Koh.
Regarding MediShield Life benefit enhancements, he noted that these include those implemented since 2018, such as the extension of coverage to inpatient hospices and serious pregnancy complications.
Planning for the future
Explaining how the MediShield Life Fund distributes its money, Dr. Koh noted that “a key feature of the MediShield Life program is to distribute premiums more evenly over the life of the insured.”
“Part of the premiums paid by policyholders during their working age is set aside to provide premium refunds in the future, which will help moderate premium increases in later life,” he said.
Dr. Koh said that between 2016 and 2019, a total of $ 7.5 billion in premiums was collected, comprising $ 4.4 billion in premiums from policyholders and $ 3.1 billion from the government, measured in terms of premium subsidies. and other forms of premium support.
“In the same period, a total of $ 3.5 billion in claims was paid, while $ 3.0 billion was set aside for future premium reimbursements,” said Dr. Koh.
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