Singapore Budget 2018: MOH moves to end new purchases of as-charged riders

Singapore

YOU can no longer go to an insurer and buy riders that pay your entire hospital bill, as the government is rolling back a regime that threatens to make health insurance unsustainable.

Anyone buying a new rider from March 8 will need to pay at least 5 per cent of his hospital bill. But the total amount that a policyholder has to pay can be capped at S$3,000 a year.

This is to assure people that they will not have to dig too deeply into their pockets, whatever the size of their hospital bill.

The caveat, however, is that the S$3,000 cap applies only if patients are treated by doctors on the insurer's approved panel, or if they had received prior approval from the insurer. Otherwise, they have to pay the 5 per cent, with no cap on their share.

These measures were announced in Parliament on Wednesday - the same day The Straits Times reported that insurers had asked the Ministry of Health (MOH) to get people to foot at least part of the bill.

MOH has agreed to this for new riders. It has not mandated any change for the 1.1 million people who already have full riders for their Integrated Shield Plans (IPs) - which means they pay nothing for hospital bills.

The MOH is giving insurers until April 1, 2019, to come up with new riders that include the co-payment and cap. From then on, no full riders for IPs can be sold.

To forestall a rush to buy full riders before then, anyone buying a rider from March 8 will have to switch to the new scheme by April 1, 2021.

Elaborating on the scheme, Senior Minister of State for Health Chee Hong Tat said: "Any pre-existing conditions that are covered prior to the switch will not be excluded."

This should also apply to people with full riders, but who want to switch to the new scheme. Said Mr Chee: "We expect the new riders to have lower premiums than full riders, so the switch will result in premium savings for policy-holders."

As for those who already have riders, Mr Chee said: "We recognise that existing rider policies are commercial contracts between insurers and their policy holders.

"If insurers intend to make changes to their existing policies, they should consider the interest and well-being of all policy holders, as they seek to keep premiums affordable for everyone in the longer term."

Health Minister Gan Kim Yong told Parliament that co-payment is an integral part of healthcare schemes since zero payment "dilutes the personal responsibility to choose appropriate and necessary care".

It would "encourage unnecessary treatment, leading to rising healthcare costs not only for those with such riders, but for all of us," he said.

All six IP insurers had faced underwriting losses in 2016, but Mr Chee made it clear that this did not influence the latest move.

He said: "Let me be clear that MOH is not issuing these requirements to bail out the insurers. Our objective is to address the concerns with over-consumption, over-servicing and over-charging."

Already, overconsumption on the part of those who do not have to co-pay their bills is putting a strain on the system. People with full riders run up bills that are 60 per cent higher than those without riders.

The situation could become more dire if left unchecked as riders are becoming more popular; about 100,000 new ones are sold each year.

Health economist Phua Kai Hong of the Lee Kuan Yew School of Public Policy said the new move is one of several actions the MOH is taking to curb spiralling costs.

Another important move, he said, are the fee benchmarks to be published later this year. They will provide a yardstick for medical charges in the private sector.

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