AXA to offer Integrated Shield Plan insurance

Insurer will be sixth player to join IP market when it gets expected green light from Govt

People looking for health insurance coverage for private care will have more to choose from when a sixth player joins the Integrated Shield Plan (IP) market.

The Straits Times understands that AXA Life Insurance Singapore will be given the go-ahead from the Government soon to offer its range of hospital coverage with premiums payable with Medisave.

About two in three of the 3.9 million Singaporeans and permanent residents here have IPs. These are for coverage of treatments at private hospitals, and public hospital classes A and B1.

Applauding the move, Professor Euston Quah, head of the economics department at Nanyang Technological University, said: "It is important to have more players to raise the number of choices and increase competition among the players."

But Associate Professor Phua Kai Hong of the Lee Kuan Yew School of Public Policy at the National University of Singapore said private insurance will only drive up healthcare costs. He asked: "Is it desirable to have more people opting for private insurance when it is marketed extensively and perceived that subsidised care is inadequate?"

There are currently 26 IPs provided by five insurers. Seven of the IPs no longer accept new members.

If AXA offers one plan for each category - namely, private, A1 and the standard B1 plan that all insurers have to offer from May - it will bring the total number of IPs that are still recruiting to 22.

They are called IPs because they have to integrate the basic national health insurance MediShield Life as part of their plans. This means that part of the premiums they collect is passed on to the Central Provident Fund Board, which runs MediShield Life, a scheme targeted at subsidised care in public hospitals. When patients make claims, part of the payout comes from MediShield Life.

The premiums charged by different insurers can vary greatly. For more expensive plans for older people, the difference in premiums can be almost $3,000 a year. This could be because some insurers have a far larger share of the pie than others, and can spread the risk over a larger pool of members.

AXA is expected to price its products competitively to grab as much of the market as quickly as possible.

Historically, premiums go up every couple of years. The market is gearing up for premium rises expected towards the end of this year, when the one-year moratorium on premium increases following the introduction of MediShield Life on Nov 1 last year expires.

A version of this article appeared in the print edition of The Straits Times on March 23, 2016, with the headline 'AXA to offer Integrated Shield Plan insurance'. Print Edition | Subscribe