Health insurance overconsumption

Educate, but don't shift goal posts

Doctors from the Intensive Care Medicine Team watching the first patient, who was moved from the accident and emergency department, as he undergoes a CT scan.
Doctors from the Intensive Care Medicine Team watching the first patient, who was moved from the accident and emergency department, as he undergoes a CT scan. PHOTO: ST FILE

It comes as no surprise that there are some health insurance policyholders who, having purchased riders that ensure they pay nothing at all, are bent on treatment to the hilt ("Policyholders with riders run up higher treatment bills" and "Panel suggests doing away with medical insurance riders"; both published last Friday).

What many of these people fail to understand is that any form of insurance relationship is sustainable in the long run only if both parties act on the basis of "good faith".

In other words, just because I know my goods in the warehouse are fully insured does not mean that I can be slack in terms of fire-prevention measures or, in the event of a fire, do nothing to help mitigate losses to the insurers.

Thus, if one side is hell-bent on milking the arrangement to the hilt, it will suck the other party dry and the arrangement cannot be sustained for very long.

The overconsumption by such individuals in health insurance results in insurers incurring disproportionate costs, and, as a result, the premium that everyone has to pay will rise.

Therefore, on top of selling riders that cover co-payment, insurers should also educate the insured on this point.

On the other hand, there are those who purchase riders for the peace of mind that they will be fully covered, especially in case of a catastrophic illness.

It is important that such peace-of-mind purchases should not suddenly be ripped from policyholders, or else there will be no more belief in the system.

We have clear rules, and when people participate based on those known rules, we should not suddenly change the goal posts.

To address overconsumption by a small minority, I have two suggestions.

One is that the policy arrangement stays for those who have already purchased the co-payment riders, and that compulsory co-payment be applied only on new policies.

Alternatively, for those with such riders, the co-payment waiver could be pegged at Class A or B1 treatment costs at a public hospital, and the co-payment element could kick in for amounts above treatment costs pegged at these levels.

This will ensure some "pain" and discourage individuals from overconsumption just because they do not have to pay.

Peh Chwee Hoe

A version of this article appeared in the print edition of The Straits Times on October 18, 2016, with the headline 'Educate, but don't shift goal posts'. Print Edition | Subscribe