20-25% of subsidised inpatient bills may be impacted by deductible hikes, with precise impact unclear

Health Minister Ong Ye Kung has acknowledged the Ministry of Health’s inability to provide precise data on the financial impact of increased deductibles under the revised MediShield Life scheme.

The admission came in response to detailed questions raised by Progress Singapore Party Non-Constituency Member of Parliament (NCMP) Hazel Poa regarding how the deductible increases would affect Singaporeans.

Ms Poa’s questions, presented during a recent parliamentary session, sought specific data on four areas:

(a) what is the estimated percentage of inpatient bills that will be impacted by the proposed increase in MediShield Life inpatient deductible by up to S$1,500;
(b) what is the estimated number of Singaporeans who are likely to face higher inpatient bills each year as a result;
(c) what is the estimated percentage of outpatient bills that will be impacted by the new outpatient deductible of S$500 per year; and
(d) what is the estimated number of Singaporeans who are likely to face higher outpatient bills each year as a result.

In his written reply, Minister Ong acknowledged that the Ministry of Health was unable to provide precise estimates on the number of Singaporeans impacted by the changes, citing the challenge of accounting for variations in healthcare consumption patterns.

“It is difficult to estimate the number of inpatient bills where co-payment by patients will increase due to increases in deductibles,” Mr Ong stated, adding that “it may be a fifth to a quarter of subsidised bills incurred by Singaporeans, depending on healthcare consumption patterns.”

He noted, however, that many affected bills would be for lower-cost procedures that could still be covered by MediSave, thereby limiting the cash out-of-pocket burden for subsidised patients.

Mr Ong further explained that the MediShield Life Council recommended the deductible increases after concluding that the existing deductibles, unchanged since 2015, had become less effective in filtering out smaller, more affordable bills.

According to Mr Ong, “Deductibles as a feature of insurance sieve out the small bills so that insurance claims can defray a large part of the big bills.”

He elaborated, “The Council therefore proposed an increase in deductibles, which the Government accepted. Without these changes to the deductibles, MediShield Life premiums would have needed to increase by an average of 31%, instead of 22%.”

Addressing outpatient costs, Mr Ong explained that the scheme’s expansion to cover more types of outpatient treatments, such as home-based medical care, would necessitate the introduction of a new S$500 outpatient deductible to keep premiums manageable.

He highlighted that the outpatient deductible would ensure MediShield Life resources are allocated toward more substantial claims. To offset this deductible, he said, there would be an increase in outpatient claim limits.

For instance, the monthly claim limit for dialysis treatments has been raised from S$1,100 to S$1,750.

“We expect the cumulative annual increase in outpatient claim limits to more than offset the outpatient deductible for most treatments,” Mr Ong noted, although he acknowledged that the impact would vary depending on individual factors such as claim amounts and subsidies received.

The minister also addressed broader concerns about healthcare costs.

He underscored that the deductible changes are part of a balanced approach in healthcare financing, explaining, “One of the truisms of healthcare is that ultimately, people always pay… through a mix of subsidies, insurance, and co-payment, mostly through MediSave, we can minimise the ultimate burden on people while delivering good health outcomes.”

He added that co-payment by patients, including deductibles, is essential to ensure the system remains efficient and prevents unnecessary medical costs.

The discussion of deductible increases arose in the context of the latest MediShield Life Scheme (Amendment) Bill, passed by Parliament on 11 November 2024, which seeks to expand the scheme’s coverage to new models of care.

Under the amendment, MediShield Life will cover more outpatient and community-based treatments, including mental health and home-care services, and introduce higher claim limits to provide greater financial support to patients.

Previously, MediShield Life required treatments to be administered within approved medical institutions, but this amendment redefines coverage, allowing for certain treatments outside these settings.

While the amendment aims to increase accessibility to care and alleviate financial burdens on Singaporeans, the deductible increases represent a significant shift in cost-sharing within the system.