THE government had considered deferring the MediShield Life review and premium increases, given the tough economic conditions during the Covid-19 pandemic, said Senior Minister of State for Health Koh Poh Koon in Parliament on Monday. But premiums have to be adjusted so that the fund remains solvent and sustainable, and can meet its obligations to policyholders when claims are made, he added.

Responding to concerns from Members of Parliament about individuals who face difficulties with premiums, Dr Koh noted the existence of financial support schemes and premium subsidies.

Overall, in 2019, about 35 per cent of total premiums were paid by the government through subsidies and support schemes. A Covid-19 subsidy was recently announced for all citizens in the next two years, which will cover the bulk of the premium increase in the first year.

Between 2016 and 2019, S$7.5 billion was collected in MediShield Life premiums, comprising S$4.4 billion from policyholders, and S$3.1 billion from the government in subsidies and other forms of support.

In the same period, a total of S$3.5 billion was paid out in claims, while S$3 billion was set aside for future premium rebates.

Responding to Yio Chu Kang MP Yip Hon Weng, Dr Koh said the incurred loss ratio of the fund was an average of 104 per cent over the period from 2016 to 2019.

GET BT IN YOUR INBOX DAILY

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign UpVIEW ALL

"This means that the total premiums collected was slightly less than the total monies required to ensure that the fund is able to meet current claims and future commitments," he added.

Dr Koh named three reasons for higher premiums. First, about two-thirds of the premium increases are due to an increasing number of claimants and amount of payouts, which have risen by about 30 per cent and 40 per cent respectively in the last four years.

Another quarter of the premium increases are from refreshing the claim limits so that Singaporeans remain adequately covered for the majority of subsidised bills.

The rest of the increase, just under 10 per cent, support various benefit enhancements, including those implemented since 2018, such as the extension of coverage to inpatient hospices and serious pregnancy complications.

In response to a separate parliamentary question, Dr Koh said that healthcare cost increases will be driven by Singapore's ageing population, new treatments becoming available, and increases in operating costs such as manpower.

The Health Ministry's strategy to manage healthcare costs includes focusing on health and prevention, improving community care options, and focusing on value and cost-effectiveness.