Insurers should treat customers better

This story was first published in The Straits Times on Jan 12, 2014

Like thousands of other Singaporeans, my annual health-care insurance letter came in the mail last month.

It was time to renew my insurance plan.

I usually don't give it a moment's thought because the premium is automatically deducted from my Medisave account. No action needed - so no need to fuss over it or read the fine print.

Or so I thought.

But this year's letter was different.

It started by saying there were going to be improvements to my MyShield plan, in line with the recent announcement by the Health Ministry.

That's when I knew it wasn't going to be business as usual.

The new premium was now $1,589.08, and since the maximum I could use from Medisave was $800, a payment of $789.08 was due, the letter stated.

It was the first time in years I would need to use cash to renew the plan.

But how much more was it compared to last year? There was no mention in the letter, and since I couldn't find last year's, I had no idea.

A quick call to the company revealed the answer - $800, fully paid by Medisave.

So, my premium had doubled, give or take a few dollars.

Now, if you are asked to pay twice as much for a product, you would expect some nifty new additions or improvements to justify the hefty increase.

There was something about the letter, though, that made me lower my expectations.

I think it was this line: "These revisions are necessary in order for us to stay aligned with the latest claims experience, so we can keep up with Singapore's changing healthcare landscape."

That was it?

Because health care was now a landscape - and changing - I now had to pay double?

Wait, there was a four-page annexe listing details of the changes.

But try as I did, I could not find anything in the list relevant to me. In fact, only two items sounded like anything new: the improved plan now covered cornea transplants (how many corneas get fixed this way every year?), and Accident and Emergency (A&E) treatment within 24 hours prior to hospitalisation.

The rest read like very minor tweaks and clarifications to the original plan.

One other item on the list made my blood pressure rise - my deductible had now gone up. That's the amount you pay in cash before the insurance kicks in. In my case, it went from $3,000 to $3,500.

So, to recap: My premium doubled and my deductible amount increased by $500, for some very small additions to my original plan.

I believe most other Singaporeans received similar letters, were asked to pay more, and had their deductible raised.

But because I had opted for an A Class ward plan, my increases were probably among the steepest.

Can insurance companies raise their charges this way without asking their customers whether they wanted these changes?

Since MediShield is a national health insurance scheme, do they need government approval to do so?

Who regulates their business to make sure what they do is in the public interest?

These questions are especially pertinent now because there is a government-appointed committee looking at how best to implement a new scheme called MediShield Life that is being touted as the next big thing in health-care financing.

The new approach is meant to give Singaporeans "greater peace of mind", according to Health Minister Gan Kim Yong.

That's a heroic promise to make, but I didn't get much of it from my insurer's latest moves.

How then to make good on the pledge and ease Singaporeans' health-care worries?

Here are my three suggestions for the MediShield Life committee to consider.

  • First, there has to be some degree of stability and predictability to the premiums to be paid.

It would be unrealistic to expect them to be frozen in time. But premiums should not be allowed to be doubled arbitrarily from one year to the next without reasonable justification.

For those approaching retirement, it is a big worry. Would we be able to afford these premiums and deductibles over the next 20 years or so, if they keep rising?

  • Second, what about having an incentive built into the plan for those who stay healthy and have not made any claims, similar to the no-claim bonus scheme in motor vehicle accident insurance?

In the latter case, premiums can go down by as much as 50 per cent for those with accident-free records.

And what about even lower amounts for those who are health-conscious, exercise regularly and take their medication religiously?

  • Third, there has to be greater transparency in the way insurance companies operate and conduct their business.

My colleague, Salma Khalik, wrote last week in this newspaper how premiums can vary by as much as 100 per cent, from one insurer to the next, even when they involved exactly the same plans.

Because most people don't really understand health insurance and whether one plan is better than another, they depend on insurers to be open, accountable and honest about their products and how they work.

If insurers are unlikely to do this on their own, they need to be regulated much more stringently so that there are minimum standards of transparency and disclosure.

The funny thing about my own insurance plan is that I know I won't need to use it even though I've just paid to renew it.


It's because I'm already covered by the company I work in as part of its staff benefits.

Yet, I'm compelled to buy my own health insurance in the event I leave the company or when I retire.

If I don't, I risk not being able to get myself insured when I no longer enjoy my company's medical benefits.

Like many others, I have been dutifully paying for years, for insurance cover I don't need but will eventually do.

Who benefits from this wasteful arrangement?

You guessed it, those same insurance companies which get two premium payments - from me and my company - and then go on to promptly raise these premiums.

There should be a way to avoid this unnecessary duplication which only adds to the total health-care cost of the country.

But please do this quickly before I retire.

This story was first published in The Straits Times on Jan 12, 2014

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