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 from today will need to eventually pay at least 5 per cent of his hospital bill. But the total amount a policyholder has to pay can be capped at $3,000 a year, although insurers are free to set a higher threshold. 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.
However, the $3,000 cap applies only if patients are treated by doctors on the insurer's approved panel, or if they had received prior approval from the insurer. Otherwise, they have to pay the 5 per cent, with no cap on their share.
These measures were announced in Parliament yesterday - 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 for their Integrated Shield Plans (IPs) - which means they pay nothing for hospital bills.
MOH is giving insurers until April 1 next year to come up with new riders that include the co-payment and cap. At that point, no full riders for IPs can be sold.
Meanwhile, anyone buying a rider from today 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 with full riders who want to switch to the new scheme. Mr Chee said: "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 policyholders.
"If insurers intend to make changes to their existing policies, they should consider the interest and well-being of all policyholders, as they seek to keep premiums affordable for everyone in the longer term."
Health Minister Gan Kim Yong told Parliament that co-payment is an integral part of healthcare schemes as 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.
All six IP insurers faced underwriting losses in 2016, but Mr Chee made it clear that this did not influence the latest move.
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."
Already, over-consumption on the part of those who do not have to co-pay their bills is putting a strain on the system. People with full riders have bills that are 60 per cent higher than those without riders.
The situation could become more dire if left unchecked as riders are becoming more popular. About 100,000 new ones are sold a year.
Health economist Phua Kai Hong of the Lee Kuan Yew School of Public Policy said the new move is one of several actions that MOH is taking to curb spiralling costs.
Another important move, he said, are the fee benchmarks coming out later this year, which will provide a yardstick for medical charges in the private sector.