You are here

One-year IP premium freeze on Medishield Life roll-out

Move is meant to facilitate a smooth transition for policyholders: LIA

medishield2706.jpg
Integrated Shield Plan (IP) insurers will freeze premiums of all IPs for a year following the end-2015 roll-out of universal healthcare coverage MediShield Life by the government.

INTEGRATED Shield Plan (IP) insurers will freeze premiums of all IPs for a year following the end-2015 roll-out of universal healthcare coverage MediShield Life by the government.

The move by the five insurers - AIA Singapore, Aviva Singapore, Great Eastern Life, NTUC Income and Prudential Singapore - comes even as claims over four years from 2011 for IPs covering public hospital class A/B1 wards rose 12 per cent annually, while claims for private hospital IPs leapt 17 per cent per annum.

The Life Insurance Association Singapore (LIA) on Friday attributed the rise in claims for IPs, which are optional additional medical insurance coverage, to "larger medical bills, greater healthcare consumption and the increased use of newer and costlier procedures that leverage medical technology advancements".

The average bill size from private hospitals is about two to three times that of the average bill size from public hospitals. The IP insurers also found that the average bill size from private hospitals rose at a faster rate than that from public hospitals.

sentifi.com

Market voices on:

To keep premiums affordable for all, the IP insurers will continue to work on better managing healthcare costs with the government and relevant parties by looking at ways to improve price transparency and comparison of professional fees within the industry, and use in-depth data analytics to better scrutinise unusually high healthcare bills.

With MediShield Life providing higher healthcare coverage, policyholders can anticipate lower claims payout from the top-up portion of their IPs, also known as the additional private insurance coverage portion.

But the reduction will vary between IPs targeting public hospitals and those covering private hospitals, said LIA.

Based on industry average between 2013 and 2014, claims payout from the top-up portion is expected to fall by 14 percentage points for IPs covering public hospital class A/B1 wards, while that of private hospital IPs is estimated to shrink by a more modest six percentage points.

The move to freeze the IP premiums is meant to facilitate a smooth transition for policyholders, LIA said, adding that in the long term, insurance premiums would be adjusted upwards as the trend of rising healthcare costs, particularly private healthcare costs, continue.

Premiums of riders, which are complementary and not part of IPs, will also go up over time due to the higher level of claims.

Separately, industry observers noted that competition will intensify as Axa Singapore is set to become the sixth IP insurer here.

Powered by GET.comGetCom