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Source:
www.moh.gov.sg |
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Transiting to a Competitive and
Dynamic Private Medical Insurance Market |
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Last week, the Ministry of Health (MOH) announced
the details of the reformed MediShield. The reform will fix the current
limitations of the MediShield scheme, bringing substantial benefits to
Singaporeans by easing their financial burden if and when confronted with a
major hospitalisation. |
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REFOCUSING ON LARGE HOSPITAL BILLS |
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The limitations of MediShield, pertaining to high
co-payment by patients and unduly low deductibles, also affect some of the
Medisave-approved private medical insurance schemes (PMIS), although to a
lesser degree. This is because the private insurers have been updating their
insurance parameters periodically. Nevertheless, some inadequacies exist. |
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We should fix these limitations now before they
become too severe for the patients to bear. Timely adjustments require less
drastic adjustments. |
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In formulating these adjustments, MOH has taken
the approach of letting the insurance industry free play, subject to certain
minimum regulatory requirements. |
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These requirements are to: |
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(a) preserve the use of Medisave principally for
inpatient care; and |
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(b) discourage open-ended and comprehensive
medical insurance which has led to serious moral hazard problems of abuse and
over-servicing elsewhere. |
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Specifically, MOH will require these private
insurance plans to incorporate (a) a minimum deductible and (b) a minimum
co-insurance element. |
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The current deductible levels have remained
unchanged for more than a decade. They have gone out of line with current
cost. Periodic adjustments are necessary to reflect the changing cost of
hospitalisation. |
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From July 1, MOH will reset the minimum deductible
level from $2,500 to $3,000 for Class A and private wards, and from $1,500 to
$2,000 for Class B1 wards. |
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Current projections suggest that in 2010, MOH may
have to raise the minimum deductible level to $4,000 for Class A and private
wards, and $3,000 for Class B1 wards. But MOH will review this closer to the
date. |
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As for the minimum co-insurance requirement, the
current prescribed rate is 15%. MOH has decided to reduce it to 10%. This will
give the private insurers greater flexibility in designing their insurance
plans. |
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Some can take advantage of this relaxation to
offer higher payouts for their policyholders who incur large bills. |
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More..... |
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Source:
Ministry of Health Press Release 3
February 2005 |
Private medical insurance industry to be transformed
