The Ministry of Health (MOH) will keep a close eye on hospital costs to make sure that having universal insurance coverage with better benefits does not lead to spiralling premiums.
Speaking to the media for the first time since receiving the MediShield Life Review Committee's report last Friday, Health Minister Gan Kim Yong said: "With enhanced insurance, it's important to ensure overall health-care cost is managed properly."
The report had indicated that it expects health-care costs - and eventually premiums - to go up as a result of its recommendations for the national insurance scheme which will cover everyone, sick or healthy, for the rest of their lives.
Mr Gan said retaining the deductible - the amount a person pays when he is admitted for treatment before insurance kicks in - and co-payment, his contribution to the rest of the bill, "will encourage patients to make wise decisions".
"But this is not enough," he added. "We also need our health-care providers to continue to remain cost-effective in providing quality care."
To achieve this, the MOH will step up efforts to monitor claims. Any unusual ones will be looked into, to ensure that appropriate care has been given. The ministry will also share information with hospitals so that they can learn from one another's experiences. But again, he said, this will not be enough to keep a lid on health-care costs.
"We need society to come together to stay healthy, to make informed decisions on their health-care needs so that we can manage costs and ensure MediShield Life is sustainable for years to come."
Mr Gan confirmed that premiums will not change for the first five years of the scheme, adding that the projected increase in claims in that period was taken into account when premiums were set. He said: "We have no intention of varying the premiums over the next five years. But we cannot preclude catastrophic changes to the health-care landscape."
Two out of three people with Integrated Shield Plans (IPs) can expect premium increases due to the introduction of MediShield Life. But Mr Gan said these should not be higher than the increase in the premiums for the basic scheme and, in some cases, might even be lower.
Speaking to the media at a palliative care conference, Mr Gan backed the suggestion by the committee for a standardised plan by all insurers pegged at B1-ward class.
"It is a very important starting point, so that policyholders will have a basis to compare," he said.
Currently, IPs come in three categories - B1 class, A class and private hospitals - and offer different benefits, sometimes at highly different premiums.
The report said this plan should "be provided as an option to all new and existing IP policyholders, including those who want to downgrade from their Class A/private plans to a more affordable option".
Today, four of the five IP insurers offer B1 plans, which cover about 500,000 people.
Mr Gan said the features of the plan will be standard, but insurers might charge different premiums because their cost structures vary - however, the variation in premiums "should not be very large".
Currently, B1 plans for people in the same age band can vary by more than $1,000 a year.