Medishield Life review: Good news all round - pay less as bill grows

How should one interpret the proposed claims benefits revealed yesterday as part of the new MediShield Life scheme?

Well, patients still need to pay the initial $1,500 to $3,000 of hospital bills accumulated within a year - what is known as the "deductible". That, I think, is reasonable as the new national insurance scheme is meant to help with big bills.

But beyond that initial deductible, it was generally good news all round. What patients must co-pay beyond the initial deductible has gone down from 10 to 20 per cent to a lower 3 to 10 per cent range, with patients paying less as the bill gets bigger.

Claim limits for certain procedures have also been increased, most notably for chemotherapy and radiotherapy to treat cancer, where they have more than doubled for bigger bills. Again, this helps people with large bills, as it will mean insurance will be able to cover more of their bill.

But the most fantastic news, especially for people who have reached, or will soon be reaching, the lifetime cap on claims of $300,000, is the committee's decision to do away with it altogether.

Such a cap defeats the purpose of MediShield Life which is meant to cover everyone for life.

Of course, better coverage comes at a cost. To pay for the higher claims, premiums must go up.

To cushion the impact, the Government has indicated that it will provide a suite of subsidies, ranging from permanent ones for low- to middle-income households to temporary ones to help phase in premium increases for the general population.

The committee has not yet revealed what it is recommending for the new higher MediShield Life premiums, nor the full extent of these offsetting subsidies. But it gave some indication, using four household archetypes, which seem both promising and generous.

The specifics will be keenly anticipated, but the committee has given the assurance that premiums for almost all households will remain within Medisave contributions, with no additional cash outlay needed. It also noted that the additional 1 percentage point employer Medisave contribution will be enough to cover the increases in MediShield Life premiums for "most people".

Aside from that, Singaporeans will also ask: What is the effect of these changes on people with integrated plans (IPs) that incorporate MediShield? After all, almost two in three of them are on IPs.

IPs are essentially health insurance plans stacked on top of the basic MediShield plans. They are a sort of "MediShield Plus": Pay an extra premium and get higher payouts, better class of stay in hospitals and higher coverage.

Those on IPs may argue that when the basic MediShield payouts are enhanced, there will be no need to pay a single cent more in total premiums. This is because the additional MediShield payouts are already part of the higher "stack of benefits" they are currently paying for.

But a statement by the Life Insurance Association, representing the five insurers offering IPs, indicated that there would be some increase, promising it would be of "minimal impact".

What other wider outstanding issues are there?

Yesterday, the committee revealed the top concerns of people at various focus-group discussions. The No. 1 issue was a generally poor understanding of the health insurance system. This led to another top concern: that somehow, out-of-pocket costs would be very high even after insurance payouts.

This lack of understanding is something that the Government must tackle if it wants to convince the population that it is making strides in solving the hot-button issue of health-care affordability in a fast-ageing society where the cost of medical care is popularly perceived as being high.

It may eventually require a more fundamental relook of the whole system, with a view to simplifying it considerably.

But that is another review by another high-powered committee for another year, hopefully not too far down the road.

Twitter: @STHealth