That was why MediShield was reformed in 2005. All policyholders of private rider plans to MediShield are now automatically policyholders of the basic MediShield too, with the riders supplementing MediShield. The reform has restored the MediShield risk-pool with all the 'cherries' returned to MediShield.

The Ministry of Health monitors private insurers to ensure clear and fair contractual terms. In particular, all policyholders are guaranteed renewability of coverage by their insurers. In other words, once a policyholder is insured, his insurer cannot use the basis of any subsequently-developed medical condition to selectively increase his premium or exclude him from coverage and renewal. This is the personal experience of Ms Chua whereby her MediShield insurance remains intact despite her cancer diagnosis. This important rule prevents cherry-picking during the term of insurance.

However, the insurance industry does exclude pre-existing illnesses, in line with industry practice overseas. This is to avoid adverse selection. Otherwise, a person may apply for coverage only after discovering an illness. Ms Chua's suggestion that the Government should require all insurers to accept applicants with pre-existing illnesses will give policyholders the wrong incentive to leave their insurance plans and to re-enter only after they have developed an illness. This must lead to much higher premiums for all policyholders and will be unfair to those who stay loyal to their insurers throughout.

Ms Chua cited the American Health Insurance Portability and Accountability Act as an example which limits the exclusions for pre-existing medical conditions. But the US example has resulted in extremely high premiums, costing up to thousands of US dollars per month. US insurance companies are also known to discourage their agents from selling plans to people with pre-existing illnesses. As a result, insurance is effectively unaffordable for the vast majority of such people in the US. We should be careful not to adopt such an example.

In any case, most Singaporeans are still without MediShield not because of medical conditions, but inertia. The best advice is still for these Singaporeans to sign on to MediShield and to consider a private insurance rider immediately, while they are young and healthy. This is the correct way to eliminate the risk of being uninsurable if an illness should subsequently develop.

We are however mindful of the insurability challenge faced by those with congenital illnesses. Unfortunately, there has so far not been a fair and affordable solution via the insurance industry. Meanwhile, we must rely on government subsidies and Medifund to assist such patients if they are from the low-income group.

Karen Tan (Ms)
Director, Corporate Communications
Ministry of Health