MediShield Life review: Sweet deal for all
Published on Jun 27, 2014 11:30 AM
SINGAPORE - The report from the MediShield Life Review Committee is out - and will surely bring smiles to many faces. It appears to be good news on top of more good news.
The hefty premium increases that many feared did not materialise. The fear was not an irrational one, given the build-up of information over the past few months. The good news about the changes, like better benefits and bigger payouts, was often sobered with frequent reminders that better benefits have to be paid for with higher premiums.
People have also been told that including those with pre-existing illnesses, as part of a caring and sharing society, means everyone will have to pay more.
Not surprisingly, many took all that to mean hefty premiums were in the offing - in spite of promises that they would remain affordable.
Instead, when MediShield Life – which will cover all residents for life, regardless of whether they are healthy or already sick – is launched at the end of next year, a large segment of the population will find themselves actually paying less than they are today.
Yes, premiums will be going up. But a heavy ladling of sweetener in the form of permanent premium subsidies for two in three people, ranging from 15 to 50 per cent of their premiums, takes the sting out of the increase.The 450,000 pioneers - people who have been Singaporeans before 1987 and are 65 years and older this year - receive even higher subsidies of 40-60 per cent.
Even for those who do not qualify for these subsidies, the actual dollar increase in premiums is not that high, with no one needing to pay more than an extra $355 a year. This is less than $30 more a month - an amount which will easily be covered by the extra 1 per cent in Medisave contributions from employers from next year.
There is also good news for the two in three people who have purchased higher insurance coverage through the Integrated Shield Plans (IPs). These plans target Class B1, Class A and private hospitals. But the five insurers offer a varied range of benefits for the same ward class, with premiums differing by more than $1,000.
The committee wants to see better regulation of these plans. It has also recommended that the Ministry of Health (MOH) work with the industry to come up with a standard B1 plan with fixed premiums which can be fully paid for with Medisave.
This was originally not part of the committee’s mandate, but given the number of people with such plans, and their calls for some control on premium hikes, the committee decided to take on the task as well.
It will be interesting to see what will finally emerge with these IPs.
But whatever the outcome, anyone who decides to drop this added coverage is assured of good basic coverage at affordable premiums. The relatively painless changes have been made possible largely by the Government taking on 75 per cent of the load of bringing the sick into the scheme.
The Government must be lauded for being willing to loosen its purse-strings - to the tune of $4 billion over the first five years. For now, at least, MediShield Life, like the Pioneer Generation package, stands out as a major policy shift that appears to have succeeded in attaining most of its objectives and will give its rapidly ageing population more peace of mind about their healthcare needs.