Riders have been tagged as the bad boys of health insurance and blamed for pushing up healthcare costs. This is because patients who have them may not be concerned with the cost of their treatment, and some doctors, knowing that their patients have such cover, overcharge or over-service them.
Essentially, patients who have purchased riders do not have to pay anything for their medical treatments, as these riders take over what is normally the patient's share. Two in three people here have bought private integrated plans (IP) that sit atop MediShield Life, to cover themselves for non-subsidised treatments.
However, all IPs have a deductible - which is an initial amount patients pay before insurance kicks in - and a co-payment, which is 10 per cent of the rest of the bill which the patient also needs to pay.
Some patients take on additional insurance, called a rider, which pays for both the deductible and the co-payment. Half of those with IPs here have bought such riders.
Policyholders with riders have been running up bills that are 20 to 25 per cent higher than those who co-pay for their treatment, a study by the Life Insurance Association of Singapore revealed yesterday.
The Ministry of Health (MOH) frowns upon riders as it strongly believes that patients need to pay part of the cost of their treatment. It said in a statement yesterday that this "reflects the importance of personal responsibility for one's health and healthcare". It said: "For MediShield Life and IPs, co-insurance helps to guard against over-consumption and over-treatment, deductibles help the insurance focus on helping patients with the larger bills to ensure premiums remain affordable, and claim limits mitigate the risk of overcharging."
It is partly for this reason that while part or all of IP premiums can be paid for with Medisave, the premiums for riders cannot. Meanwhile, one in three residents here now has riders, compared with less than one in five in 2011.
The Health Insurance Task Force, whose report released yesterday hopes to rein in runaway health insurance costs, have urged the six insurance companies offering IPs to tweak their products so patients have to pay a share of their bills.
It said: "As these policyholders are insulated from the cost of their medical charges, they may lack the incentive to manage their health and medical costs, translating to higher insurance claims."
However, the task force said any change in design of their products should not put existing policyholders at a disadvantage.