More in Singapore are expected to downgrade private health insurance policies as premiums rise

Key Concepts

• Integrated Shield Plans (IPs): Private health insurance plans in Singapore that supplement MediShield Life.
• MediShield Life: Singapore's basic mandatory health insurance scheme.
• Premiums: The amount paid regularly for insurance coverage.
• Deductibles: The amount a policyholder pays out-of-pocket before insurance covers the remaining costs.
• Medical Inflation: The rising cost of healthcare services and treatments.
• Overconsumption: Excessive use of healthcare services, potentially driven by insurance coverage.
• Civil Service Card (CSC): Medical benefits for civil servants.

Expected Downgrading of Private Health Insurance Plans

Market Watchers anticipate an increase in the downgrading of private health insurance plans (Integrated Shield Plans or IPs) by Singaporeans, particularly those above 60 and retirees, due to potential premium increases starting next month. These increases are linked to updates in MediShield Life. The Ministry of Health reports a slight decline (2.2% from 2020 to 2023) in IP ownership among older residents (69-year-olds).

Personal Perspective and Concerns

Abdul Hamed, a pensioner and Civil Service Card (CSC) holder, expresses concern about the adequacy of his medical benefits as he ages. While his CSC provides coverage, he worries about whether it will be sufficient to cover potential future illnesses and the necessity of additional insurance.

Potential Premium Increases and Deductibles

MediShield Life premiums could increase by as much as 35% over the next three years, depending on age group. For example, Mr. Hamed, currently paying $1,100, could see an $200 increase (18%) in April. Deductibles, currently between $1,500 and $3,000 based on ward class and age, could rise by another $1,500 in two years. Outpatient deductibles are also expected to increase by around $500, requiring patients to pay more for normalized bills.

Government Support and Concerns about Private Insurance

The government claims that support measures will more than offset MediShield Life premium increases for over 90% of Singaporeans over the next three years. However, there are concerns that private insurance providers will raise Integrated Shield Plan (IP) premiums to address medical inflation and potential overconsumption.

Addressing Rising IP Premiums

The rising IP premiums are causing unhappiness, especially among seniors above 60 who are no longer working, as higher treatment in government or private hospitals becomes less affordable. Potential solutions include reducing or resizing benefits to make them more affordable.

Synthesis/Conclusion

The anticipated increase in MediShield Life premiums and the potential for private insurance providers to raise IP premiums are expected to lead to more Singaporeans, especially older retirees, downgrading their private health insurance plans. While government support aims to mitigate the impact of MediShield Life premium increases, concerns remain about the affordability of private healthcare and the need to address medical inflation and overconsumption. The discussion highlights the importance of balancing comprehensive healthcare coverage with cost-effectiveness, particularly for the aging population.