Integrated Shield dilemmas: Insurance body tackles consumers’ key concerns

[SINGAPORE] With medical costs in Singapore projected to increase each year, the sustainability of private health insurance is under the spotlight.

Against this backdrop of rising costs and impending regulatory tightening, the Life Insurance Association’s (LIA) latest guidance on Tuesday (Dec 16) addresses common questions consumers have about their private health insurance.

1. What do I actually get for my premiums?

A safety net – not an investment return.

A common frustration is paying high premiums without making a claim. Health insurance is “not a savings plan” and does not “maximise monetary returns”. Assessing one’s policy on a “return on investment” basis is inconsistent with its purpose.

2. What should I consider when buying or reviewing a plan?

Match your coverage to ward preference, out-of-pocket limit and long-term budget.

• Public hospitals (subsidised B2/C wards): MediShield Life is sufficient.
• Private hospitals or A/B1 wards: An Integrated Shield Plan (IP) is needed for this higher coverage, and it is also needed for the option to choose one’s own doctors.

Even with an IP, out-of-pocket expenses can be high for private hospitals and higher-class wards. This is where optional rider add-ons play a critical role.

Riders reduce out-of-pocket expenses, such as the co-payment amount. They also cover treatments that MediShield Life and standard IPs may exclude, including non-Cancer Drug List treatments.

But more comprehensive coverage often comes at higher premiums. Since every insurer offers a range of options with varying levels of protection, individuals should carefully “weigh the benefits and costs for these options”.

Coverage must also be balanced against long-term affordability. Premiums rise with age and medical inflation. This can affect an individual’s ability to pay in the long term and may even deplete one’s MediSave, affecting its sufficiency for other healthcare needs.

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As life stages change, an individual’s preference for subsidised versus non-subsidised wards may shift. Review regularly to ensure one’s policy aligns with needs and budget.

3. What are the three critical milestones to review my policy?

• Age 22 to 26: Individuals may take over policies their parents bought. Review in context of salary and future needs.
• 41 to 51: Premiums often jump in this bracket. Look into coverage needs, review family health history and decide if one can afford to hold, downgrade, or drop riders to better manage long-term costs.
• 55, pre-retirement: Income may stop but premiums will continue. Ensure payments remain manageable on a retirement budget and re-evaluate preferred hospital ward.

4. What to do when premiums become unaffordable?

Speaking to a financial adviser rather than cancelling policy. Terminating the IP or switching to a lower tier plan with the same insurer does not require additional underwriting.

5. Should I drop rider that costs more than the IP?

Riders can cost more than the main plan because they cover additional treatments that MediShield Life and standard IPs exclude, such as non-Cancer Drug List treatments.

“Downgrading without a holistic financial needs analysis could lead to unexpected out-of-pocket medical bills”. Balance benefit of the rider against its long-term cost before making a decision, and consult a financial adviser.

6. Do I need to watch my usage if insurance is paying for it?

Yes, prudent usage is a collective responsibility. Choosing to be warded when outpatient treatment is sufficient, or undergoing unnecessary treatments purely to make a claim goes against the intent of health policies.

Unnecessary treatments contribute to over-utilisation and excessive claims, which will drive up healthcare costs for all policyholders.

Health protection relies on risk-pooling; prudent usage spreads costs and keeps coverage more affordable for everyone.

7. Why do premiums keep increasing?

Medical inflation and demographic shifts. Premium hikes are driven primarily by medical inflation, which is expected to hit 16.9 per cent in Singapore in 2026.

Factors fuelling this include:

• Singapore’s ageing population,
• Advancements in medical technology,
• Higher private hospital bills, and
• Over-consumption and over-charging.

Insurers argue that these rising costs must be priced into premiums to keep the insurance pool sustainable for the long term.