We thank Ms Christie Loh for her letter (Clearer picture of IP premiums needed; June 27).
MediShield Life is a basic, not-for-profit scheme that covers all Singaporeans. Payouts are based on the cost of subsidised bills in Class B2/C wards. The premiums are set by the Ministry of Health (MOH) and the scheme is managed by the Central Providend Fund.
To keep the premiums affordable, the Government provides permanent premium subsidies for the lower-to middle-income and additional premium support for the needy.
In addition, the Government has provided transitional subsidies for the first four years of MediShield Life (until next year) to help Singaporeans transition into MediShield Life.
Integrated Shield Plans (IPs), on the other hand are offered by private insurers. IPs comprise a MediShield Life component and an additional private insurance component managed by private insurers.
The private insurance component provides higher coverage, such as to cover Class A/B1 wards and private hospitals. This component is optional and is not subsidised by the Government.
The recent reports on insurers' financial accounts are in relation to this private insurance component of the IPs.
Premiums of IPs are set, reviewed and adjusted by private insurers.
For the convenience of policyholders and to ensure that there is no duplication in cover, the private insurers administer the IPs as an integrated plan with MediShield Life, even though both components are managed in separate funds.
Singaporeans should carefully consider if they require the coverage offered by IPs, and the higher premiums associated with it.
Health insurance premiums tend to increase with the age of the policyholder, and also with increased claims incidence.
The MOH recently introduced co-payment requirements for new IP riders, to encourage prudent use of healthcare services among patients, and more measured treatment and charging decisions among doctors.
The ministry has also encouraged insurers to develop panel and pre-authorisation arrangements, which will also help to control costs.
All stakeholders - healthcare professionals and providers, insurers and policyholders, employers, patients and caregivers, and the Government - have a part to play in keeping healthcare costs affordable and sustainable for all Singaporeans.
Lim Siok Peng (Ms)
Director, Corporate Communications
Ministry of Health
