New IP rider rules: what stays, what goes, and how it affects you
MOH hopes removing riders that fully cover the deductible will maintain ‘cost discipline’ and reduce unnecessary admissions, tests or overnight stays
[SINGAPORE] Integrated Shield Plans (IPs) and their riders are among the most widely purchased insurance products in Singapore. But many policyholders remain unclear about what they actually cover.
The Business Times explains what they are, and how the Ministry of Health’s (MOH) latest rules will change things.
What are Integrated Shield Plans (IPs)?
IPs are optional private-insurance plans that provide coverage in addition to what is offered by MediShield Life, Singapore’s compulsory basic health insurance scheme.
While MediShield Life covers large hospital bills in subsidised wards, IPs offer additional coverage. Depending on the plan, this may include:
- treatment in private hospitals;
- admission to higher-class wards in public hospitals; or
- a larger range of specialists and procedures.
IPs are available from seven private insurers: AIA, Great Eastern, HSBC Life, Income, Prudential, Raffles Health Insurance and Singlife.
About 71 per cent of Singapore residents – roughly three million people – hold an IP.
What are IP riders?
Riders are optional add-ons to an IP. They have to be paid fully in cash – that is, MediSave cannot be used to settle them – and are meant to reduce your out-of-pocket costs when making a hospital claim.
They typically cover two types of out-of-pocket costs: deductibles and co-payments.
A deductible is the fixed amount you must pay each policy year before insurance kicks in. For example, if a private-hospital deductible is S$3,500, you must pay the first S$3,500 of your bill. MOH sets the minimum deductible by ward class.
After you pay the deductible, a co-payment applies. By default, patients pay 10 per cent of the remaining bill. Riders typically reduce this to 5 per cent, with a cap.
Today, two in three policyholders who have riders enjoy “maximum coverage”: they pay the deductible plus at least a 5 per cent co-payment, capped at S$3,000.
Some riders go even further and fully cover the deductible. These are the ones MOH is phasing out.
Why are full-deductible riders being removed?
Health Minister Ong Ye Kung and MOH have long warned about the “buffet syndrome” – when patients use healthcares services more readily because they do not feel the financial pinch.
MOH data shows that private-hospital IP policyholders with riders:
- made 1.4 times more claims than those without riders; and
- had 1.4 times higher bills on average.
Private-hospital bills have also risen sharply, from S$9,100 in 2019 to S$15,700 in 2024.
MOH sees removing full-deductible riders as a way of maintaining “cost discipline” and reducing unnecessary admissions, tests or overnight stays.
What are the MOH changes?
MOH’s changes mean that it will not allow riders that fully cover the IP deductible. This rule kicks in for all new riders from Apr 1, 2026; riders purchased between Nov 27 and Mar 31 must be brought into the new framework by Apr 1, 2028.
At the same time, the annual co-payment cap – which applies after the deductible is paid – will double from S$3,000 to S$6,000.
With the reduced coverage, the ministry expects premiums for new riders to fall by about 30 per cent.
How does this affect you?
Consumers with existing full-deductible riders will continue to receive their current benefits during the transition period.
They may also purchase such riders under the current regime until Mar 31, 2026, although insurers must inform them in advance about the upcoming shift to the new rules. Those who purchase a full-deductible rider between Nov 27 and Mar 31 can continue using it until Apr 1, 2028, at the latest.
For those considering whether to switch, industry players say it may be worthwhile to move to the new rider design once insurers begin offering it – particularly for individuals who do not expect to be hospitalised soon.
Savings from the lower premiums can then be set aside to cover the deductible if a hospital stay becomes necessary.
Those who use private hospitals more are likely to feel the impact most, as the deductible will now not be fully covered by insurance.
In contrast, those who mainly use public hospitals will see a smaller effect because subsidised-ward deductibles are lower and subsidies remain substantial.
New IP buyers, meanwhile, will no longer be able to purchase full-deductible riders from April next year.
They will have to choose between a standard rider that covers part – but not all – of their out-of-pocket costs, or going without a rider, which means paying the full deductible and the standard 10 per cent co-payment.
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