A framework for thinking about the new Integrated Shield riders

THE landscape for hospitalisation Integrated Shield Plan (IP) riders is shifting significantly.

From April, new IP riders sold must follow a stricter cost-sharing framework, which aims to encourage prudent use of healthcare services.

To recap, IP riders are optional cash-only add-ons, designed to cover out-of-pocket components – the deductible and co-insurance – of a hospital bill, which a standard IP does not pay.

The deductible is the fixed amount you have to pay per policy year before the insurance kicks in: S$1,500 for a Class-C ward, and up to S$3,500 for a private or Class-A ward.

The co-payment is the percentage of the remaining bill you share with the insurer. This is typically 5 per cent of the remaining bill, capped at a fixed amount per policy year.

For those who are holding on to IP riders that are unaffected by the new rider design, the deductible component of the hospital bill is covered and the co-payment is capped at S$3,000 per policy year, subject to terms and conditions such as seeking treatment from the insurer’s panel of doctors.

Such an IP design has led to some patients overconsuming healthcare services, and certain doctors overprescribing and potentially overcharging for tests and treatments, resulting in a “buffet syndrome”.

Therefore, IP claims have been driven higher, which has led insurers to raise premiums.

Over the past three years, IP rider premiums for private hospitals have grown at an average of 17.2 per cent annually. The most expensive lifetime IP premiums with riders can exceed S$800,000, excluding premiums for MediShield Life.

New requirements from Apr 1

It is hoped that the new IP riders will arrest this vicious circle of escalating healthcare costs and premiums.

Insurers are no longer allowed to sell IP riders that cover a patient’s deductible.

Under the new design, the co-payment cap is raised to a minimum of S$6,000 per policy year, to keep pace with bill sizes that have increased over time. Having more skin in the game will likely make you think twice about overconsuming medical services.

Since the new IP riders cover less, premiums are expected to drop by about 30 per cent on average, compared to existing riders with more coverage.

Effects of new riders

You may now need to tap more of your Central Provident Fund MediSave account to cover a larger share of your hospitalisation bill.

That said, the Ministry of Health projects that 60 per cent of rider claimants should not need to pay any cash out of pocket after MediSave.

Of the remaining 40 per cent who do face cash out-of-pocket costs, the majority would pay S$1,000 or less, and practically all would pay S$3,000 or less.

While out-of-pocket costs may increase, the changes are expected to translate to average annual premium savings of around S$600 for private-hospital IP rider policyholders, and around S$200 for public-hospital rider policyholders.

Older policyholders stand to enjoy greater premium savings.

Transition for existing policyholders

• Bought IP rider before Nov 27, 2025: Your current coverage remains in place for now, though insurers may eventually transition these plans later. Monitor for updates from your insurer. You may switch to the new riders launched from April without additional underwriting, provided they offer similar or lower benefits.
• Bought between Nov 27, 2025 and Mar 31, 2026: These plans will be automatically transitioned to the new compliant rider at your next policy renewal after Apr 1, 2028.

Things to think about

Given these changes, it is an opportune time to review your health insurance coverage. Here are some considerations.

• Understand your healthcare preference. This includes your choice of ward, access to preferred doctors and potential wait time differences between public and private hospitals.
• Consider your insurance preference. Assess whether the new IP rider better suits your needs and long-term affordability. Riders can provide coverage for treatments not on the Cancer Drug List, and extend coverage during pre-hospitalisation and post-hospitalisation periods.
• Stick to an affordable budget. Assess your current and future affordability, as premiums for IPs and riders can rise significantly as you age.
• Build adequate emergency funds. Set aside at least three to six months of monthly expenses, as the new changes will require higher out-of-pocket costs in the event of hospitalisation.
• Check if your employer’s group medical insurance can plug the gap for the deductible component. Many corporate plans cover these costs, even if your personal IP rider no longer does.
• Consider switching insurers only if you are in good health with no medical history. Wait until your new plan is approved before terminating your existing coverage. Your coverage will be automatically ported to the new insurer, and any unused premiums from your existing insurer will be refunded upon switching.
• Think carefully before cancelling or downgrading your rider. Any future addition or upgrade of riders will require medical underwriting.
• Review your medical insurance and premiums annually. This is because IPs and the riders are subject to changes.

Over time, the new rider design should help to moderate overall healthcare costs and break the current spiral of rising bills and escalating premiums. This would return health insurance to its core purpose, while protecting you against significant healthcare expenses.

By understanding these changes, you will be better placed to make informed decisions and enjoy greater peace of mind, knowing that you are financially prepared for any healthcare episode.

Lorna Tan is head of financial planning literacy and Shawn Lee is a wealth content specialist, DBS Bank