New rules for Integrated Shield Plan riders: How will the changes to co-payment of hospital bills affect you?

Anyone buying a new rider will need to pay at least 5 per cent of his hospital bill.
Anyone buying a new rider will need to pay at least 5 per cent of his hospital bill. ST PHOTO: SEAH KWANG PENG

SINGAPORE - Anyone buying a new rider will need to pay at least 5 per cent of his hospital bill, instead of having the entire bill covered.

The total amount that a policyholder has to pay, however, can be capped at $3,000, or more, a year. 

These measures were announced in Parliament on Wednesday (March 7). Here's a look at how the changes may affect you:

Q: What's the difference between MediShield Life and an Integrated Shield Plan (IP)?

A: MediShield Life insures for care in subsidised classes, with premiums entirely payable from your Medisave account.

People who want private treatment need more coverage which the IPs provide. Premiums can be paid with Medisave up to a cap based on age.

Today, 68 per cent of people here have IPs.

Q: How many types of IP plans are there?

A: Six insurers are allowed to sell IPs, with plans pegged at private hospitals; public hospital A class and public hospital B1 class.

The Ministry of Health (MOH) requires all IPs to have a deductible of up to $3,500 a year, depending on the ward class. This is the amount the patient has to pay before insurance kicks in. It is cumulative and can be made up of several bills within the year.

On top of that, patients also need to pay 10 per cent of the rest of the bill.

Q: What are riders?

A: There are two types of riders. About 1.1 million people have full riders that pay the deductible and the co-payment, so patients do not need to pay a cent for their hospital bills.

About 200,000 people have partial riders (like the one that MOH will now require) where the patient has to pay a small portion of the bill.

 
 
 

Q: Why is MOH making changes to riders?

A: People who have riders have bills that are, on average, 60 per cent higher than people who have only IPs without riders. Some of this comes from over-servicing or over-charging by doctors. The high bills have pushed up premiums for everyone, not just those with riders.

Over the past two years, rider premiums have gone up by up to 225 per cent while IP premiums have risen by up to 80 per cent, with older people paying more.

Total IP and rider claims rose from $858 million in 2015 to $1.05 billion in 2016. The six insurers have tried to absorb much of the increase. As a result, all suffered underwriting losses in 2016.

This was why they appealed to the MOH for help.

The MOH fears that should this continue, it would push up healthcare costs for everyone, including those who are only on the basic MediShield Life.

This is because all IPs incorporate the basic scheme. Higher IP bills also mean higher payouts from MediShield Life. This could push up premiums for MediShield Life.

Q: I already have an IP with rider, so what happens to me?

A: The new rule does not apply to you. You may continue with your existing coverage. But insurers are allowed to change their products and some may decide to do so as their experience is that people with full riders tend to have higher claims.

You might also be given the choice to switch to the new scheme with its lower premiums.

Q: So should I switch?

A: If you are still young and healthy, it might be a good idea to do so. You need to see how much you save in premiums each year and multiply that by the number of years you expect to require little major healthcare treatments.

Although you have to pay 5 per cent of the bill under the new scheme, the maximum you might need to pay in a year is $3,000 or any higher cap your insurer offers.

One consideration is that this amount can come from Medisave, but the premium for your rider cannot, and has to be paid in cash.

Based on 2016 bills, 5 per cent co-payment comes to $670 or less for three in four people who made claims that year.

Dr Jeremy Lim, a partner at consulting firm Oliver Wyman, said: "I'm reasonably confident that the difference in premium between the full and 5 per cent rider will continue to widen and in the years to come, it will become more and more obvious that the full rider will not make sense for the vast majority of Singaporeans."

Q: What will the rules mean for new IP rider plans?

A: If you are buying a rider from March 8, you can be fully covered till April 1, 2021, when you must switch to the new plan where you pay at least 5 per cent up to a maximum of $3,000 a year - or higher amounts set by your insurer.

This payment by you can be paid with Medisave money.

Your insurer must offer the new plan by April 1, 2019, so you may choose to switch to the new plan earlier to save on premiums.

Q: Is it too late to buy a rider plan that will cover 100 per cent of my hospital fees?

A: Yes. Insurers are no longer allowed to offer full riders.

They may only sell full riders that convert to partial riders by April 2021.

Q: Does the $3,000 annual cap mean that no matter how big my bill is, that's all I need to pay?

A: Yes, but only if you are treated by the insurer's panel of doctors, or have received pre-treatment approval from the insurer.

Should you choose to go to a doctor not on the panel, or seek a treatment that has not been pre-approved, the insurer will not cap your contribution at $3,000 a year.

This means that you will have to pay 5 per cent of the bill, no matter how large it is.