The Government announced that MediShield Life premiums may rise by up to 35 per cent in 2021. This will be the first increase in premiums for compulsory health insurance since its launch in 2015.
The increase was reported to pay for the additional benefits offered by MediShield Life to cover “more and larger hospital bills”, with proposed yearly claim limits from S$100,000 to S$150,000.
According to The Straits Times, the Government will help “soften the impact” of the premium increase with a “special COVID-19 subsidy” for the first two years. All Singaporeans will be getting a 70 per cent subsidy in the first year, and 30 per cent in the following year.
The subsidy will be costing the Government S$360 million.
The aforementioned subsidy is on top of the existing subsidies of 15 to 50 per cent given to lower- and middle-income groups, as well as the 40 to 60 per cent for Pioneers. An additional of 5 to 10 per cent of subsidy will be given to the Merdeka generation.
It was also estimated that the subsidies in the next three years will amount to S$2.2 billion.
Increased coverage and benefits of MediShield Life
As mentioned above about the “additional benefits” of MediShield Life, the proposed higher premiums will allow for “better benefits” that include:
- Higher coverage for sub-acute care at community hospitals.
- Higher annual claim limit of S$150,000 from the current S$100,000.
- Higher claim limits for certain charges like intensive care, which will be raised from S$1,200 to S$2,200 a day, dialysis and psychiatric care.
- An additional S$200 per day claim for daily ward charges.
- A plan for MediShield Life to cover treatment for attempted suicide, self-injury, substance abuse and alcoholism.
- A lower deductible of S$2,000 for people 80 years and older for day surgery.
Reduced cap on claims for treatments at private hospitals
However, as for the people who receive treatment at private hospitals, the cap on claims will be reduced from 35 per cent of the bill to 25 per cent. The press reported that 35 per cent of private hospital care amounts to “far higher sums” than bills incurred by subsidised patients.
It was revealed that this particular change will not impact the individuals who receive private care at public hospitals.
Furthermore, the new claim limits are said to bring MediShield Life “back in line” with its original mandate to cover 90 per cent of subsidised bills. This was the case because there was only 80 per cent of subsidised bills covered last year.
“MediShield Life claim limits should be refreshed to cover nine in 10 subsidised bills, and should be reviewed more regularly to ensure that they offer adequate protection in light of inflation and medical advancements,” stated the MediShield Life Council.
Singaporeans think the premium increase is “daylight robbery”
Upon being notified on this piece of news, many Singaporeans were not having it.
Some commented that the increase of the premiums is “daylight robbery” and that the current premiums are “already very high”.
Zain expressed that the increase was announced at a “horrible timing” because of the COVID-19 pandemic and the economic downturn that follows the public health crisis.
Many believed that a hike of 35 per cent is “too much” and Boon Heng questioned if citizens would be able to afford to pay for the high premium when they get older.
Previously, a Straits Times article back in 2014 claimed that the increase of MediShield Life premium was “much lower than feared”. In response, TOC questioned how is the increase “much lower than feared” when the increase is up to 111 per cent for the lower-income, and 189 per cent for the higher-income.
With the latest announcement of the premium increase, the situation seems to be worsening.
The total premiums collected by the Government had been exceeding the total claims by the insured. Considering there had been surpluses in the MediShield reserves in past years , the hike sounds unreasonable especially during a recession as many more are losing income.