The Government should allow the Central Provident Fund (CPF) to run MediShield and “cut off” private insurance companies if it is truly “sincere” about keeping medical costs affordable, one netizen on said Sunday (4 Apr).
The netizen, who goes by the name Foong Swee Fong, said in a Facebook post that while the mainstream media may give the impression that the Government is “serious” about keeping the medical cost affordable, they actually “detract from the root cause of the high cost of medical care” which have yet to be addressed.
Earlier on Saturday (3 Apr), The Straits Times reported that a pro-tem committee looking into issues related to Integrated Shield Plans (IP) will be formalised into a committee appointed by the Ministry of Health (MOH).
This was announced by Senior Minister of State for Health Koh Poh Koon who posted on Facebook that doctors and IP insurers have sparred over the issue of IP panels in the past few weeks.
He noted that more details on the committee and proposed recommendations will be released when ready, while urging both sides to remember that “they should serve the best interests of a common customer — patients who are policyholders”.
Mr Foong wrote: “Today, Medishield has become Medishield Life and Medishield Plus has become Integrated Shield Plan. The list of companies participating in the Integrated Shield Plan include GE Life, AIA, AXA, Prudential, Aviva, Raffles Health Insurance, and NTUC Income.”
He said that Integrated Shield Plans’ take-up rate had increased due to the MediShield Life “inadequate if one suffers a major illness”.
“For example, the basic scheme does not cover pre and post-hospitalization bills which can be costly if one is unfortunate to require, say, treatment for cancer. Also, the co-payment is hefty if the overall bill is big, and coverage for surgery is only up to $2,600 and one needs to top up if the bill exceeds the limit.
“So, for peace of mind, more people have purchased the Integrated Shield Plans. In fact, the more inadequate the basic scheme, the better it will be for the private insurance companies because if a person is already compelled to buy hospitalization insurance, he might as well buy one that covers him adequately, especially if the premium can be paid by Medisave,” he added.
Though it is not known whether the Government is “working hand in glove” with the insurance companies to pass business to them, Mr Foong believes that “no one can dismiss the notion either”.
“After all, Temasek is invested in the insurance companies and the banks, and has a few alumni in the highest echelon of the Government,” he added.
The MediShield Plus premium was only valued at S$90 per annum for individuals aged 35-year-old when it first started compared to the S$626 per annum today, which are both from the NTUC Income, said Mr Foong.
“Instead of just paying the Government the cost of administrating the scheme, we now have to pay 7 insurers for doing the same thing, on top of their profits. And how did they value add? Nothing much except being another cost centre. In fact, they may be destroying value, since we are not enjoying economy of scale,” he added.
Mr Foong highlighted that medical care is an essential service that is not supposed to be profit-driven, yet the medical insurance scheme is run by “profit-maximization entities”.
He asked: “What would the long-run outcome be, especially since the customer doesn’t have much of a choice?”
“If the Government is sincere about keeping the medical cost affordable, it should just cut off the insurance companies and let the CPF Board run it on a non-profit basis,” said the netizen.
Mr Foong noted that the administrative cost and profits earned by the seven insurance companies are “not the only pertinent reason for the high cost of medical care today”, but are also factored by the doctors’ fees and the cost of medicine.
“The fees that doctors charge are at least subject to competitive market forces, so that is fair. But the cost of medicine is a different thing. It is one of the highest in the region, especially medicine to cure cancer and heart failure.
“The reason is that Singaporeans have to pay for patented, rather than generic drugs, no thanks to the intellectual property clause in the many Free Trade Agreements our government has signed, which compel them to enforce patents, which may be good for attracting foreign investments and GDP, but the people has to pay the price,” he asserted.