MediShield Life review: Premium increase much lower than feared

SINGAPORE - The increase in premiums which people will have to pay for the better benefits under MediShield Life will not be more than $355 a year, with most of it absorbed by various government subsidies and top-ups.

This is according to the report of the MediShield Life Review Committee which was released on Friday. The committee also added that all premiums are expected to remain within Medisave contributions and inflows and there will be no additional cash outlay required.

*Note: All premiums figures are shown on a per month basis, but are payable per year. Full tables of premiums can be found here. 2019 premiums include premium subsidies but no transitional subsidies
1 Premium and subsidy details are provided by the Ministry of Health. Applicable for Singapore Citizens staying in residences with an Annual Value (AV) of $13,000 or less. For those with AV above $13,000, please click here. Permanent Residents receive half of the applicable premium subsidies for Singapore Citizens and no transitional subsidies
2 Lower-income refers to individuals with monthly per capita household income of $1,100 or less
3 Lower-middle-income refers to individuals with monthly per capita household income of $1,101 to $1,800
4 Upper-middle-income refers to individuals with monthly per capita household income of $1,801 to $2,600
5 High income refers to individuals with monthly per capita household income above $2,600
6 Net premiums shown are for Pioneer Generation Singaporeans

For full tables, please click here.

Click here to use the MediShield Life Premium calculator to estimate your premium amount.

The report included details of premiums, benefits, subsidies and a new suggestion - that the Government set up a standard "integrated shield" plan pegged at the private, B1 class ward. Integrated shield plans consist of the basic MediShield plan plus an enhanced portion run by a private insurer which allows the holder to upgrade to a higher ward class stay and enjoy higher claim limits.

Given the significant increase in benefits - such as the removal of lifetime limit and higher daily and annual claims - and the inclusion of the old and the sick, there were fears that premiums would rise so much that they would not be affordable to many. But the biggest rise in premiums before any subsidies kick in will be $355 a year for those aged between 75 and 77 years. This will see the premiums of this group go up from $775 to the new rate of $1,130.

For those aged 21 to 30, the premium rise without subsidies is $129, while that for those in the 51 to 60 age group is $285. The committee is recommending that the Government help to offset some of this increase.

There should be a permanent set of subsidies based on monthly per capita household income, ranging from 15 per cent for a upper-middle income person who is less than 40 years old, to 50 per cent for a lower-income individual who is older than 90.

The committee also recommended a second set of transitional subsidies for all Singaporeans to be given over four years - 80 per cent of the premium increase in the first year, falling to 20 per cent in the fourth year.

As a result of these subsidies, Pioneer Generation Singaporeans - who were citizens since before 1987 and are 65 years and older this year - will find their MediShield Life premiums lower than what they are today.

The maximum premium increase in the first year of MediShield Life will be less than $3 per month for the lower- to middle-income, and less than $6 per month for the higher-income; and after the transitional subsidies run out, the increases range from $3 to $11 a month for the lower-income, $5 to $14 a month for the middle-income and $7 to $30 a month for the higher-income.

These low premiums are underwritten by the $4 billion the Government will be spending in subsidies over the first five years of MediShield Life, which will cover every resident, healthy or sick, young or old, for life.

The new scheme is expected to start towards the end of next year.

The government feedback unit Reach has set up an online platform for members of the public to give their feedback on MediShield Life, following Friday's release of the full report and recommendations. It is available here.

Dr Amy Khor, who is Reach chairman and Senior Minister of State for Health and Manpower, said that the Government has accepted all of the committee's recommendations on the new scheme's design. "It also welcomes the committee's recommendations on Integrated Shield Plans and other related issues, and will study how best to implement them," she said. "But the process does not stop here. We want to continue to engage the public and hear their views."

Join ST's WhatsApp Channel and get the latest news and must-reads.