A task force set up to look at the rising cost of insurance in Singapore has suggested sweeping measures such as doing away with riders that enable insured patients to get away with paying nothing towards their own treatment.
It has also suggested that insurers have a list of preferred health providers that charge reasonable fees and offer their services to customers. Patients can still opt for other doctors, but this could affect the amount of their bill covered by insurance.
Medical insurance claims have been rising, and premiums for integrated plans, that sit atop MediShield Life, are set to rise. They had been frozen for a year, but are poised to go up once the moratorium is lifted next month. The Straits Times understands that premiums for private hospital plans could then rise by 9 to 15 per cent.
Recommendations to keep costs down
More people making health insurance claims means that premiums have been rising over the years. Here is what the Health Insurance Task Force has recommended to keep costs down:
1. Establish a set of guidelines for medical fees, so that people can get a better estimate of how much their treatments should cost.
2. Make clearer the process through which insurers can raise issues such as inappropriate or excessive treatment to the relevant authorities.
3. Improve insurance procedures and product features. This includes:
• Using panels of preferred healthcare providers to manage medical costs through agreements on fees.
• Make sure co-insurance and/or deductibles are included in the product design, so that some co-payment is still necessary. This is to prevent overconsumption.
• Get insurers to approve claims for treatment and bills before the actual procedure is carried out, so that issues of inappropriate treatment and high charges can be addressed from the start.
4. Educate consumers on their available options and the corresponding costs, so as to reduce information asymmetry.
The task force, which was set up by the Life Insurance Association (LIA) of Singapore and included members from the Ministry of Health (MOH) and the Monetary Authority of Singapore (MAS), also suggested medical fee benchmarks or guidelines to reduce overcharging. Guidelines are currently not allowed here as they are seen as anti- competition.
The task force also proposed tweaking current practice to make it easier for insurers to raise suspected inappropriate or excessive medical treatments with the Singapore Medical Council, the professional watchdog.
The issue of riders, which cover the entire medical bill, clearly bothered the panel which noted that patients with riders run up bills that are 20 to 25 per cent higher than those who have to bear a share of the cost.
The task force suggested the six insurance companies offering IPs tweak their products so patients pay a share of the bill to prevent the "buffet syndrome", while ensuring that existing policyholders are not put at a disadvantage.
The task force, headed by Ms Mimi Ho of financial consultancy firm Regulatory Professionals, also urged greater consumer education so people can "actively manage their health and healthcare costs".
MOH called the report "timely and commendable" and agreed with it on the issue of co-payment.
It said that co-payment by patients was a key tenet in its healthcare financing framework and it "helps to guard against over-consumption and over-treatment".
"The absence of any co-payment may encourage over-consumption by some patients and over-servicing or over-charging by some healthcare providers which will eventually increase healthcare costs and insurance premiums for all Singaporeans," it said.
On the issue of medical fee guidelines, it said it would continue to work with healthcare providers and IP insurers on ways to further improve fee transparency.
The ministry has recently started revealing the range of fees charged by private hospital and specialists for a large number of common procedures.