SINGAPORE - You can no longer go to an insurer and buy riders that pay your entire hospital bill, as the Government is rolling back a regime that threatens to make health insurance unsustainable.
Anyone buying a new rider will need to pay at least 5 per cent of his hospital bill. But the total amount that a policyholder has to pay can be capped at a minimum of $3,000 a year. This is to give people the peace of mind that they will not have to dig too deeply into their pockets, whatever the size of their hospital bill.
These measures were announced in Parliament on Wednesday (March 7) - the same day that The Straits Times reported that insurers had asked the Ministry of Health (MOH) to get people to pay at least part of the bill.
MOH has agreed to this for new riders. However, it has not mandated any change for the 1.1 million people who already have full riders - which effectively allows people to pay nothing for hospital bills - for their Integrated Shield Plans (IPs).
The MOH is giving insurers until April 1, 2019, to come up with new riders that include the co-payment and cap. At that point, no full riders for IPs can be sold.
To prevent people rushing out to buy full riders before then, anyone buying a rider from Thursday (March 8 ) has to switch to the new scheme by April 1, 2021 at the latest.
Elaborating on the scheme, Senior Minister of State for Health Chee Hong Tat said: "Any pre-existing conditions that are covered prior to the switch will not be excluded."
This should also apply to people currently with full riders who want to switch to the new scheme to save money. Said Mr Chee: "We expect the new riders to have lower premiums than full riders, so the switch will result in premium savings for policyholders."
As for those who already have riders, Mr Chee said: "We recognise that existing rider policies are commercial contracts between insurers and their policy holders.
"If insurers intend to make changes to their existing policies, they should consider the interest and well-being of all policy holders , as they seek to keep premiums affordable for everyone in the longer term."
Health Minister Gan Kim Yong told Parliament during the debate on his ministry's budget that co-payment is an integral part of healthcare schemes since zero payment "dilutes the personal responsibility to choose appropriate and necessary care".
It would "encourage unnecessary treatment, leading to rising healthcare costs not only for those with such riders, but for all of us," he said.
People with full riders have bills that are 60 per cent higher than those without riders. In 2016, bills from patients with private hospital IPs and full riders averaged $9,975, compared to $6,270 for those with the same IP but no rider.
Roughly one in three people here have only basic MediShield Life, a third have just IPs and another third have IPs and riders. But riders are getting popular with about 100,000 new riders sold a year.
The $3,000 cap applies only if patients are treated by doctors on the insurer's approved panel, or had received prior approval from the insurer. Otherwise, they still have to pay the 5 per cent, but there will be no cap on how much they need to pay each year.
Only four of the six insurers have such panels and pre-authorisation.
All six IP insurers had faced underwriting losses in 2016. But Mr Chee made it clear that the ministry's move is not due to this.
He said: "Let me be clear that MOH is not issuing these requirements to bail out the insurers. Our objective is to address the concerns with over-consumption, over-servicing and over-charging."
He gave the example of a woman with full rider who had surgery for a small breast lump. The doctor's fee alone was more than $70,000. The norm for the procedure is $5,000.