The Medishield Life Council has just announced a whole raft of potential changes to Singapore’s national health insurance scheme that can see premiums rise by 35 per cent. Before going into the minutiae, let’s go back to basics.
The very point of having health insurance is to ensure that everyone is covered should they ever find themselves (or their families) ill. It is meant to take away worries over escalating healthcare costs. Most insurance polices are privately run. Customers get to shop around and compare prices. They get to see the terms of different competing policies and decide which provider they want to go with. This is not the case with Medishield Life.
Medishield Life is compulsory. In other words, no matter how steep the premiums are or how unfair the terms might be, Singaporeans cannot opt out. While I am not suggesting that the current terms or its proposed changes are in any way unfair, the fact remains that policy holders do not have a choice. That in itself is already an issue.
While the changes to increase the policy year claim limit, bring in higher claim limits for daily ward and treatment charges and to remove standard exclusions for treatments arising from the effects of attempted suicide, drug addiction and alcoholism are commendable, a potential 35 per cent increase is nevertheless very steep. All the more so because it will be imposed on you whether or not you agree. Not to mention that the changes are set to take place as early as 2021.
This begs the question of whether the calibration has been done correctly from the outset. All of the issues that the increased premiums are set to cover are not new.
Social activists have been highlighting these issues for years! Yet, instead of listening to the concerns when they are raised and introducing changes incrementally, it might well be implemented in one fell swoop.
Where is the forward planning here?
Under the recommendations, those over the age of 61 will see the highest increase in premiums. While the Government has subsidies for those who qualify, the question remains why we have a system in place where subsidies are required in the first place?
Compulsory national insurance is meant to look after every citizen who has worked and paid into their CPF. This should mean that if you have worked hard and paid into your CPF, you should be able to afford it without a need for a subsidy in the first place! What has gone amok in the structure that has now seemingly produced an unwieldy and confusing system of healthcare insurance where Singaporeans have no choice but are also left confused by the multitude of rules where subsidies are concerned?
Added to the myriad of utter confusion, is the question of whether subsidies really are subsidies?
Let’s take an example utilised by this publication last year in relation to polyclinic charges.
It was noted that public polyclinics appeared to charge higher medical fees than private clinics. These costs are then brought down by the subsidies that the Government provides. This means that in reality, the subsidies are not helping the way we think they are because the starting price was higher to begin with. A bit like how a shop marks up its items before a sale.
According to ValueChampion, Singaporeans pay very high out-of-pocket costs for healthcare even after taking into account every subsidy and insurance coverage available. In fact, out-of-pocket costs make up almost 37% of the total healthcare expenditure in Singapore – that’s almost three times higher than the high income-country average and 1.4 times higher than the East Asia & Pacific average.
It does not help when we have the cost of public healthcare being similar or more expensive after subsidies. An example of this was presented by blogger Phillip Ang who found that the consultation fees at a public polyclinic were much higher than that at a private clinic.
On his blog, Mr Ang detailed his experience of getting a consultation at a public clinic for a cyst removal which involved seeing a GP, then a specialist and looking at an estimated bill for an operation. The total he would have had to pay including the operation was S$325 after subsidies. Deciding to take the private clinic route instead, Mr Ang only paid S$280 for the same consultations and procedure, much lower than what he would have had to fork out at a public clinic.
So, is the Medishield Life really a shield against medical costs? Or is it really a battering ram to already tight pockets?