Forum: Higher claims contribute to higher premium increases for seniors

A 4-bedded ward at Singapore General Hospital on Feb 20, 2017.
A 4-bedded ward at Singapore General Hospital on Feb 20, 2017.PHOTO: ST FILE

We refer to Senior Health Correspondent Salma Khalik's commentary (Steep MediShield premium hikes and what they signal about affordable healthcare, Oct 15).

MediShield Life premiums are actuarially determined, with each age group paying premiums to support their own needs. This ensures that MediShield Life remains sustainable even as our population ages.

Seniors are more likely to be hospitalised and make claims. Among seniors above 65 years old, about one in six received a MediShield Life payout last year, compared with about one in 30 for the rest of the population.

They also tend to have more serious conditions, and hence, larger bills. This is why their premiums are higher.

The commentary indicated that this should not have an impact on MediShield Life premium increases.

Factors such as increasing number of claims and payout amounts for seniors contribute to the premium increases. The number of claims by seniors and payout amount to them have increased by almost 50 per cent, from 229,000 claims and $363 million in 2016, to 333,000 claims and $541 million last year.

The growth is about 70 per cent and 90 per cent higher than the rest of the population respectively.

In addition, premium increases are also needed because of benefit enhancements such as increases in claim limits and expansion of coverage.

This also includes enhancements since 2018 without premium adjustments, such as extension to inpatient hospices and higher, more granular claim limits for surgical procedures.

The Government provides significant subsidies to keep premiums affordable for our seniors. About half of their total premiums were paid by the Government last year.

Pioneers and Merdeka Generation seniors also receive Medisave top-ups, which can be used for premiums.

Younger policyholders pay more premiums during their working years, which are set aside for future premium rebates to moderate premium increases in their old age.

With government support measures, including the additional Covid-19 subsidy, the net premium increases for all Singaporeans will be no more than about 10 per cent in the first year.

The Government alone cannot slow premium increases or the rise in healthcare costs. Everyone has to play a part, such as by using healthcare services appropriately.

Together, appropriate care can remain affordable for all Singaporeans.

Cham Dao Song

Director

Finance Policy

Ministry of Health

A version of this article appeared in the print edition of The Straits Times on October 24, 2020, with the headline 'Higher claims contribute to higher premium increases for seniors'. Print Edition | Subscribe