Avoiding moral hazard of MediShield Life

The MediShield Life Scheme Bill, introduced in Parliament last week, gives the authorities wide-ranging powers to check the income and health status of all Singaporeans and permanent residents. At first glance, the lack of privacy demanded by this legislative exercise would appear onerous. Financial and health details are extremely personal matters, and few would want to make them available to others, except for a very good reason. In that light, the power to check a person's income with the taxman and his health status through medical records at hospitals, without his explicit consent, is not a negligible issue. There is a clause which would allow those who find the checks too intrusive to prohibit them, but they would lose out on certain benefits of the scheme. Consequently, most probably would prefer to go along with the requirement of implied consent to verify personal details, if the Bill is passed.

However, it would be sad if they saw the new scheme in merely this light. The rationale of MediShield Life, which distinguishes it from the current raft of insurance schemes, is that it is a national effort to provide universal health coverage. To that end, it will cover everyone regardless of whether he is healthy or sick, and for his entire life. A scheme of this ambitiously inclusive nature requires the insured to pull their weight fairly so that they do not pass on the burden of unpaid premiums to other policyholders. In less extensive schemes, the consequences of freeloading would be restricted to a limited number of people. With MediShield Life, the national fabric, on the strength of which socially progressive programmes are possible, would be affected.

This is why the Bill gives the Health Minister the same powers as the taxman to recover unpaid premiums, such as by obliging employers to deduct the amount from a worker's salary or by getting banks to do the same from a person's account. What this suggests is that, just as taxes represent the civic responsibilities of citizenship and residence, premiums reflect the responsibilities that come with the enjoyment of a national health-care system.

MediShield Life is new territory for Singaporeans accustomed to private health insurance schemes that might encourage a buffet mentality of consuming all that is offered. To avoid raising costs for all, one should take only what is necessary. Thus, agencies must continuously explain why the new scheme's advantages have to come with commensurately more stringent standards of responsibility. In the final analysis, its success will depend on the extent to which the vast majority of Singaporeans are willing to invest their support for health care for all.