When the changes come into effect, MediShield will cover up to 80 per cent of large subsidised hospital bills - up from the current 60 per cent.

Mr Khaw made the announcement at a dialogue session with union leaders at the NTUC Centre last night. He said these will be the last changes to the insurance scheme for several years.

While those under 50 will see little change, Singapore's oldest MediShield policyholders will pay more.

People aged 81 to 85 will see premiums increase by between $30 and $40 a month. In addition, the initial sum of the hospital bill they need to pay before insurance kicks in will be double that of younger people.

Last night, Mr Khaw said he had been worried about these seniors - but he then found half of them had children or grandchildren to pay their premiums.

During the 90-minute session, the minister fielded questions like whether people earning higher salaries will continue to be allowed to choose subsidised treatment, and why there is no increase in coverage of community hospital stays.

To the first, Mr Khaw said it will remain a privilege for Singaporeans to choose any ward class they want.

As for the second, he explained that no increase in coverage is needed for community hospitals as the current rate is enough.

This is not true of hospitals where a few days in intensive care could set a patient back by thousands of dollars. Hence, MediShield will increase ICU coverage from $500 a day to $900 a day.

To suggestions that medicine is cheaper in Malaysia, Mr Khaw said he has thought about allowing Medisave to be used by people seeking treatment in other countries.

It is currently not allowed, except in an emergency, for fear of abuse. But safeguards could be built in, he said. This could save money for patients and might pressure local doctors to become more competitive, he said.

Medisave can now be used for hospital expenses overseas in an emergency, such as for someone who suffers a heart attack while on holiday.