Government subsidies and Medisave will cover new premiums, says panel
By Salma Khalik, The Straits Times, 6 Jun 2014
By Salma Khalik, The Straits Times, 6 Jun 2014
NINE in 10 subsidised patients will have their bills fully insured by MediShield Life, under new recommendations that the Government supports.
This outcome follows the higher claim limits and lower co-payments being proposed by a review committee, a change that will see the vast majority of these patients paying less than $3,000 a year for their big hospital bills.
Even among those whose various bills add up to $10,000 or more a year, 55 per cent will pay less than $3,000 a year out of their Medisave or in cash, said Mr Bobby Chin, chairman of the MediShield Life Review Committee.
But with these changes, it is necessary for premiums to go up, he said yesterday when giving an update on the committee's work.
The premium amounts are still being finalised and will be released later this month.
But the committee recommended that whatever the premiums may eventually be, they should be affordable and continue to be fully payable within Medisave withdrawal limits and contributions. It also asked the Ministry of Health to analyse the impact of the indicative new premiums on lower- and middle-income households.
Here, it noted that the new premiums will remain within Medisave contributions, with no additional cash outlay needed. Most people will also be able to cover the rise in premiums with the additional 1 percentage-point employer Medisave contribution they will receive from next year.
Post by Lee Hsien Loong.
To help Singaporeans with the premium increases, the Government said it will provide permanent premium subsidies to help up to two in three Singaporean households. The pledge means a household with per capita family income of up to $2,600 a month can expect the subsidy.
Those who are 65 years and older will get some subsidy for their premiums, regardless of their income levels, while people aged 80 and older will have their premiums entirely covered by subsidies and Medisave top-ups.
And everyone under age 80 when MediShield Life takes effect at the end of next year, regardless of income, will also get four years of "transient subsidies" to offset the hike in premiums.
Mr Chin, former managing partner of accounting giant KPMG, said people should not worry about how high premiums will rise, but focus on whether they will remain affordable.He added that the panel's work has been "intensive, challenging, but certainly meaningful".
Formed in November last year, the committee held 30 meetings before reaching a consensus that struck a balance between higher premiums and affordability on one side, and sufficient cover for everyone for life on the other.
The most intensive discussions were on the trade-offs, Mr Chin said, explaining why some things people had asked for could not be included. Among them are lower premiums for those who stay healthy, and lower deductibles.
The more that is given, the higher the premiums. When this was told to people during the discussions, most preferred to be protected against large bills.
The committee therefore left the deductible intact - at between $1,500 and $3,000 - but reduced the co-payment from the current 10 per cent to 20 per cent, to 3 per cent to 10 per cent.
Explaining why the improved coverage will not fully cover the top 10 per cent of subsidised bills, Dr Tan See Leng, group chief executive officer of Parkway Pantai Group, who chaired the subcommittee on benefits, said these bills could be so large that including them would mean premiums have to go up "exponentially".
Still, they will get more insurance help than today, he added.
Dr Chia Shi-Lu, head of the Government Parliamentary Committee for Health, praised the committee for its "quite generous" recommendations. He said: "The better co-insurance terms mean less out-of-pocket payment for Singaporeans."
MEDISHIELD LIFE | PREMIUMS
Most will be able to afford premiums without using cash
Subsidies, Medisave top-ups and extra employer contribution will help
By Salma Khalik, The Straits Times, 6 Jun 2014
Most will be able to afford premiums without using cash
Subsidies, Medisave top-ups and extra employer contribution will help
By Salma Khalik, The Straits Times, 6 Jun 2014
PREMIUMS for the new MediShield Life will need to be raised substantially to meet the increased claim payouts being proposed by a review committee.
Still, most families can afford to pay the higher premiums with their annual Medisave contributions - without having to draw on their Medisave savings or cash.
This is because they will receive various government subsidies, Medisave top-ups and an extra 1 percentage point Medisave contribution by employers from next year.
For two-thirds of households - whose total monthly family income divided by the number of family members comes to about $2,600 or less - there will be permanent subsidies to offset the cost of higher premiums.
So a family of two parents and three children with the sole breadwinner earning $12,500 a month, would qualify for this permanent subsidy.
Details of the subsidy will be announced later, but it will be tiered, with lower-income households getting more.
On top of that, the Government will give permanent annual Medisave top-ups to the pioneer generation, who are Singaporeans aged 65 years and older this year.
These top-ups will offset substantially the higher premiums they will face.
In fact, for people aged 80 and older, the subsidies and top-ups will be enough to cover their entire premium. Younger people aged 55 to 64 this year will get five years' of Medisave top-ups.
In addition, everyone, regardless of age or income, will receive four years of "transient subsidies" to tide them over the initial increase in premiums.
Part of the higher premiums paid by younger people will be kept to offset the higher premiums they will need to pay when they get older. This offset now starts when a person reaches age 70.
The committee has suggested bringing this forward to age 65, when most people would have stopped working.
The premium offset ranges from $30 to $449 a year, based on age of entry into the existing MediShield, or the future MediShield Life.
One big change that MediShield Life will bring is the inclusion of everyone, even those who are already sick.
But including them in the national insurance scheme will mean many of them are likely to make claims, some from the moment they are included. It would therefore not be fair to bring them in at the same premium level as people who have been on the insurance scheme for years.
Mr Bobby Chin, chairman of the MediShield Life Review Committee, said they pose "really high risks and costs" to the MediShield Life Scheme.
"If you have a pre-existing condition, it's only fair that you pay (more) for coming into MediShield Life," he said.
The committee suggests they pay an additional 30 per cent on top of the premiums for their age group, for a period of 10 years.
But this will not be enough to cover what they will cost the insurance scheme in claims.
So the committee is also asking all existing MediShield members to "pay a little bit more in sharing the costs of bringing in those with a pre-existing condition".
But again, getting existing members to pay in full the rest of the cost would be "too onerous", so it is capping the help from everyone else to no more than 3 per cent of their current premiums.
Together, what the new and existing members pay will not cover even half the estimated cost of bringing in people with pre-existing illness, said Mr Chin.
So it appealed to the Government, which has agreed to underwrite the rest of the cost.
Said Mr Chin: "The committee is really heartened that the Government has agreed to take on most of the costs of bringing in those with pre-existing conditions."
Enhanced benefits proposed for MediShield Life
Panel urges raising claim limits, extending coverage, reducing co-insurance rates, but premiums could double
By Neo Chai Chin, TODAY, 6 Jun 2014
Panel urges raising claim limits, extending coverage, reducing co-insurance rates, but premiums could double
By Neo Chai Chin, TODAY, 6 Jun 2014
Many of the claim limits will go up: Besides the removal of the S$300,000 lifetime claim limit, the committee recommended higher daily claim limits for normal and intensive-care wards in acute hospitals and for community hospitals.
Outpatient cancer chemotherapy and radiotherapy treatments could also have higher claim limits, as could surgical procedures. Premium rebates will start earlier at the age of 66 if the committee has its way.
Under MediShield Life, nearly six in 10 B2 and C Class patients with large bills exceeding S$10,000 will pay less than S$3,000, in Medisave and cash, from only one in 10 today.
Coverage will also be extended to those aged above 90 or with pre-existing conditions.
Premium details are still being fine-tuned and will probably be released in the panel’s final report at the end of this month. However, premiums for some households could more than double, from indicative examples shown yesterday.
The Government will provide subsidies for the bottom two-thirds of households here, as well as transitional subsidies for the first four years of MediShield Life.
The additional 1 per cent in Medisave contributions by employers from next year will also be sufficient to cover premium increases for most people, the committee said yesterday.
The additional 1 per cent in Medisave contributions by employers from next year will also be sufficient to cover premium increases for most people, the committee said yesterday.
Trade-offs in deriving a balance between enhanced benefits and affordable premiums were the subject of intense discussion, committee chairman Bobby Chin revealed.
After deliberation, the recommendation was made to raise claim limits and reduce co-insurance rates, as well as leave deductibles — the amount patients have to pay before insurance kicks in — untouched.
All three elements have significant impact on premium levels, said Mr Chin. Many people said they preferred to protect themselves against very large bills, which would be addressed by lower co-insurance and higher claim limits.
They also preferred to pay lower premiums on a regular basis, rather than lower deductibles, which would be felt only if they are hospitalised.
Asked why there were no premium rebates recommended for those who maintain good health, Mr Chin said this would result in higher premiums. The committee also did not want people to forgo necessary medical treatment just to get a no-claim bonus. “We want to encourage good lifestyles… but not through the MediShield framework,” said Mr Chin.
For those with pre-existing conditions, the committee is recommending that they pay 30 per cent more in premiums for 10 years. Other policyholders will pay no more than 3 per cent from current premiums for the purpose of bringing those with pre-existing conditions into MediShield Life. The Government will bear the bulk of costs of universal coverage.
Another reason for higher premiums is the need to pay more while one is still working to keep premiums affordable in old age.
Mr Chin said his committee would make some observations on portable medical benefits and Integrated Shield plans — private insurance offering benefits in addition to MediShield — in the final report.
The Ministry of Health said it would finalise government subsidies and provide details at a later date. It will ensure Medisave withdrawal limits are sufficient for all MediShield Life premiums.
Healthcare policy expert Phua Kai Hong of the Lee Kuan Yew School of Public Policy said the higher-middle-income households, especially those with younger grandparents, could be concerned about the increase in premiums as they could receive a lower level of subsidies.
Dr Jeremy Lim, partner and head of Asia Pacific Region, Health & Life Sciences at Oliver Wyman, said although the percentage rise in premiums is large, the public should not be unduly alarmed if the increases are justified. “For those of us unfortunate enough to be hospitalised or need healthcare, we know the out-of-pocket will be smaller because of improved benefits,” he said.
Mrs Lee Siu Hong, an exam lecturer in her 50s, welcomed the recommended changes. “When you want an upgrade, you have to be prepared to pay for it,” she said of the increasing premiums. “We should look at the long-term effect instead of worrying about what we have to pay now, and I think we’ll be fine.”
ADDITIONAL REPORTING BY KOK XING HUI AND JORDAN SKADIANG
ADDITIONAL REPORTING BY KOK XING HUI AND JORDAN SKADIANG
MEDISHIELD LIFE | COVERAGE
Lower out of pocket payments for big bills
By Linette Lai, The Straits Times, 6 Jun 2014
Lower out of pocket payments for big bills
By Linette Lai, The Straits Times, 6 Jun 2014
This includes treatment for common conditions such as cancer, stroke and heart attack, which often result in long stays and large bills.
At least nine out of 10 subsidised patients - those staying in B2- or C-class wards - will be fully insured, said MediShield Life review committee chairman Bobby Chin.
This means they will have to pay less than $3,000 in cash or money taken from their accounts in the national medical saving scheme Medisave, even though their bills may be substantially higher.
The committee's recommendations also mean that patients can make larger claims than before, and that insurance will pay for a larger share of the bill.
These changes, said Mr Chin, would be most effective at targeting large hospital bills where out-of-pocket payments are the chief concern.
"It's more critical to focus on enhancing protection for the large bills that cause Singaporeans to worry, which are most difficult for us to plan and save up for," he said.
After 10 days in a B2 ward, his bill would come to $8,100. About four out of 100 bills of all subsidised patients fall in this range, the committee said.
With the existing MediShield claim structure, the patient would have to pay $4,655 - more than half the bill - out of pocket.
Under the new compulsory health insurance scheme, however, he would pay only $2,455.
The new claim limits also mean that those undergoing outpatient treatments for cancer, such as chemotherapy or radiotherapy, would pay substantially less.
Currently, six in 10 patients pay less than $1,000 in cash or through Medisave per treatment cycle.
Under MediShield Life, the proportion of such patients would increase to eight in 10.
Two years ago, when she was diagnosed with breast cancer, she went through four chemotherapy cycles, and had to fork out about $2,000 from her Medisave account. This was after she had pawned her jewellery to pay $5,000 for surgery.
And those who rack up large hospital bills of more than $10,000 will also receive additional help, the committee said.
Now, only one in 10 pay less than $3,000. This will go up to six in 10 people.
Dr Chia Shi-Lu, head of the Government Parliamentary Committee for Health, noted that the improved benefits mean that Singaporeans will have to pay less from their Medisave accounts.
This, together with increases in employer Medisave contributions, mean that people should have enough in their accounts, he noted.
Mr Alfred Chia, chief executive of financial advisory firm SingCapital, also welcomed the proposed changes.
"MediShield has too many limitations," he said.
"MediShield Life is definitely a marked improvement from our current system."
Lecturer who battled cancer cheers proposed changes
By Kash Cheong, The Straits Times, 6 Jun 2014
By Kash Cheong, The Straits Times, 6 Jun 2014
It was covered by her company's hospitalisation insurance.
But the 63-year-old, who lives with her husband Ng Kwai Yew, 64, and daughter Shuying, 33, knows others who are not as lucky.
"Some older folk refuse treatment just because they do not want to be a burden to their families," said Mrs Ng, whose household income is about $6,000.
The higher amount patients can claim for outpatient cancer treatment, under the proposed MediShield Life scheme, is thus music to her ears.
Previously, cancer patients could claim $1,249 for one 21- or 28-day cycle of chemotherapy per month.
Under the recommendations, they can claim up to $3,000 per month. Radiotherapy claim limits have also been raised.
Previously, Mrs Ng was not covered by MediShield as she had a pre-existing condition. But under the proposed MediShield Life, she would be covered. "It used to be hard to get insurance as a cancer patient, so universal coverage really helps," she said.
"This is really good news to me," she said.
Good news all round - pay less as bill grows
By Salma Khalik, The Straits Times, 6 Jun 2014
By Salma Khalik, The Straits Times, 6 Jun 2014
Well, patients still need to pay the initial $1,500 to $3,000 of hospital bills accumulated within a year - what is known as the "deductible". That, I think, is reasonable as the new national insurance scheme is meant to help with big bills.
But beyond that initial deductible, it was generally good news all round. What patients must co-pay beyond the initial deductible has gone down from 10 to 20 per cent to a lower 3 to 10 per cent range, with patients paying less as the bill gets bigger.
Claim limits for certain procedures have also been increased, most notably for chemotherapy and radiotherapy to treat cancer, where they have more than doubled for bigger bills. Again, this helps people with large bills, as it will mean insurance will be able to cover more of their bill.
But the most fantastic news, especially for people who have reached, or will soon be reaching, the lifetime cap on claims of $300,000, is the committee's decision to do away with it altogether.
Such a cap defeats the purpose of MediShield Life which is meant to cover everyone for life.
Of course, better coverage comes at a cost. To pay for the higher claims, premiums must go up.
To cushion the impact, the Government has indicated that it will provide a suite of subsidies, ranging from permanent ones for low- to middle-income households to temporary ones to help phase in premium increases for the general population.
The committee has not yet revealed what it is recommending for the new higher MediShield Life premiums, nor the full extent of these offsetting subsidies. But it gave some indication, using four household archetypes, which seem both promising and generous.
The specifics will be keenly anticipated, but the committee has given the assurance that premiums for almost all households will remain within Medisave contributions, with no additional cash outlay needed. It also noted that the additional 1 percentage point employer Medisave contribution will be enough to cover the increases in MediShield Life premiums for "most people".
Aside from that, Singaporeans will also ask: What is the effect of these changes on people with integrated plans (IPs) that incorporate MediShield? After all, almost two in three of them are on IPs.
IPs are essentially health insurance plans stacked on top of the basic MediShield plans. They are a sort of "MediShield Plus": Pay an extra premium and get higher payouts, better class of stay in hospitals and higher coverage.
Those on IPs may argue that when the basic MediShield payouts are enhanced, there will be no need to pay a single cent more in total premiums. This is because the additional MediShield payouts are already part of the higher "stack of benefits" they are currently paying for.
But a statement by the Life Insurance Association, representing the five insurers offering IPs, indicated that there would be some increase, promising it would be of "minimal impact".
What other wider outstanding issues are there?
Yesterday, the committee revealed the top concerns of people at various focus-group discussions. The No. 1 issue was a generally poor understanding of the health insurance system. This led to another top concern: that somehow, out-of-pocket costs would be very high even after insurance payouts.
This lack of understanding is something that the Government must tackle if it wants to convince the population that it is making strides in solving the hot-button issue of health-care affordability in a fast-ageing society where the cost of medical care is popularly perceived as being high.
It may eventually require a more fundamental relook of the whole system, with a view to simplifying it considerably.
But that is another review by another high-powered committee for another year, hopefully not too far down the road.
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