As premiums for Integrated Shield Plans (IPs) are set to rise next month, market analysts predict a surge in the number of Singaporeans, especially retirees and those aged 60 and above, downgrading their private health insurance coverage.
The anticipated increase in MediShield Life premiums, which could rise by as much as 35% over the next three years, has heightened concerns. The exact rise in premiums will vary depending on an individual’s age group. However, government support measures are expected to fully offset the increased costs for most residents.
A Shift Among Older Residents
Currently, about 70% of residents are enrolled in Integrated Shield Plans, which offer supplementary private coverage in addition to MediShield Life, Singapore’s national health insurance scheme. However, recent data from the Ministry of Health (MOH) indicates a shift in coverage trends among older residents. Between 2020 and 2023, 2.2% of individuals aged 60 and above opted to forgo their IPs, reverting to basic MediShield Life coverage. Conversely, the proportion of younger individuals (aged 60 and below) with IPs rose by 1.1% over the same period.
The Ministry also reported a 5% decline in the number of people with private hospital IPs between 2021 and 2023, highlighting a broader trend of reduced reliance on supplementary coverage.
MOH has urged residents to assess their private insurance coverage in a holistic manner, taking into account factors such as personal healthcare needs, preferred coverage options, and long-term affordability.
Personal Experiences of Retirees
Retired audit director Abdul Hamid Abdullah is among those likely to be impacted by the rise in MediShield Life premiums. As a 69-year-old, he expects his premiums to increase by S$200 (US$150) to a total of S$1,300, marking an 18% increase. Despite receiving medical benefits as a pensioner through the government’s Civil Service Card (CSC), Abdullah expressed concerns about whether these benefits would be sufficient in the long term, especially as he contends with chronic health issues such as heart disease, diabetes, and high cholesterol.
“I just wish that whatever illnesses I face in my golden years are covered, so I can have peace of mind,” Abdullah said. Although he has not yet considered purchasing additional private insurance plans, he recommended that others in his age group evaluate whether they need supplementary IPs or other insurance schemes.
Rising Concerns Over Premium Increases
There are growing concerns that private insurers may further increase IP premiums in response to medical inflation and rising claims. Eddy Cheong, CEO of insurance firm Havend, noted that many individuals, particularly seniors, are struggling with the rising costs of treatment in private hospitals and government Class A wards. Cheong attributed this trend to the design of current IP plans, which feature “very high” and “very generous” coverage limits, contributing to higher claim rates.
Health Minister Ong Ye Kung previously cautioned that excessive medical claims, enabled by expansive insurance policies, are contributing to an unhealthy “buffet syndrome,” which ultimately drives up costs.
To address these concerns, the Life Insurance Association (LIA) confirmed that Singapore’s seven IP insurers are working alongside the MOH to manage claims and prevent inappropriate use of coverage.
Insurers Respond to Potential Premium Hikes
Several insurers have already taken steps to mitigate the impact of rising premiums. AIA Singapore has introduced rider options that allow premiums to remain stable, regardless of claims made on the policy. Prudential Singapore is encouraging customers to seek treatment at partner hospitals, which could result in savings on renewal premiums.
Meanwhile, Great Eastern revised its pro-ration factors for its Class A and B1 IP plans last year to more accurately reflect the cost differences between private and public ward types. A spokesperson for the company emphasized that as Singapore’s healthcare needs evolve, the insurer will continue to adapt, working closely with stakeholders to ensure that policyholders receive the necessary protection and peace of mind.
In the coming months, more residents may be faced with tough decisions regarding their health insurance plans, balancing cost concerns with the need for adequate coverage as premiums continue to rise.
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