No change to Integrated Shield Plan

A class A ward with air conditioning and television. -- PHOTO: ST FILE
A class A ward with air conditioning and television. -- PHOTO: ST FILE

About half the people who buy private insurance to get improved hospital benefits will not have to worry for one year about paying higher premiums for the extras.

They just have to pay whatever is the increase in their premiums under MediShield Life, to be introduced next year.

The Life Insurance Association (LIA) gave this assurance yesterday for the premiums of the Integrated Shield Plans (IPs) for hospitalisation in B1 and A wards in public hospitals.

These policyholders make up less than half of the 2.3 million IPs. The rest - 52 per cent - are for stays in private hospitals.

The LIA statement said the move will allow for a smooth transition for people renewing their IPs. The association includes the five insurers providing Medisave-approved IPs - AIA, Aviva, Great Eastern, NTUC Income and Prudential. It had previously said the increase in MediShield Life premiums would have "minimal impact" on IP premiums.

After the one-year grace period, the insurers will re-assess the IP based on actual experience, by looking at claims for instance, said LIA president Khoo Kah Siang.

He also said current B1 class plans are up for review as part of discussions with the Government on a standardised IP for B1 coverage, as suggested by the MediShield Life Review Committee.

All IPs currently incorporate MediShield and in future MediShield Life, which provides hospital cover for subsidised wards for all residents for life. So any changes to the basic scheme will affect the IPs.

Dr Khoo added that the commitment to not raise the insurers' portion of the premiums is "based on the assumption that there is no significant change to the regulatory and competitive environment".

Health Minister Gan Kim Yong said in Parliament on Tuesday that the overall increase for IP premiums resulting from the introduction of MediShield Life is expected to be the same, if not lower than the increase in Medi- Shield Life premiums. These will remain constant for the first five years.

But calculations for private medical care under IPs may take longer as costs are harder to anticipate than those for subsidised government care, and business considerations may come into play, said Dr Chia Shi-Lu, chairman of the Government Parliamentary Committee for Health.

Health-care expert Jeremy Lim of consulting firm Oliver Wyman said the private insurers probably want to reassure policyholders of pricing certainty for at least the next two years, so they will not make hasty decisions on whether or not to cancel their plans.

For retiree George Chiang, 73, a one-year freeze is "not good enough". He pays around $3,000 in annual IP premiums in total for him and his wife and is considering cancelling the plan. He said: "What if they double the increase the next year to make up for it?"

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