MediShield should cover congenital illnesses

If CPF Board can cherry pick who to insure and who to reject, then what makes it different from any profit-oriented private insurance company?

Two letters to the Straits Times forum in the past week shed light on a little known fact that our national health insurance scheme, MediShield, does not provide the universal coverage that many Singaporeans would have expected it to.

On September 2nd, a parent wrote in to express dismay that his newborn daughter was refused MediShield coverage because she was born with a suspected cyst in her lungs, a condition diagnosed during pregnancy. He said the CPF Board, which manages MediShield, denied her coverage, citing “the higher insurance risk posed by her pre-existing health condition”.

The parent stated that he was prepared to pay a higher premium, but did not expect his daughter to be refused Basic MediShield coverage altogether.

In their joint reply on September 11th, the Ministry of Health (MOH) and CPF Board reiterated that they are “unable to insure her under MediShield at this point” because the girl is still undergoing treatment. They then went on to say: “We encourage all parents to secure early MediShield coverage for their children before the onset of illness.”

This was quite incredible: How could this parent have secured MediShield coverage for his daughter “before the onset of illness” if she was born like that? Are parents expected to insure unborn babies?

MOH and CPF ended by saying: “Children with pre-existing health conditions can still join MediShield, but like other medical insurance schemes, MediShield could impose exclusion of certain pre-existing medical conditions from claim while still offering coverage. This is to ensure viability of the insurance scheme and to keep premiums affordable for existing members who generally enter the scheme in good health.”

Therein lies the crux of the problem, which I think requires a mindset change in this government.

Firstly, MediShield is Singapore’s national health insurance scheme, set up by the government and run by a government agency. It is not simply “like other medical insurance schemes”.

Secondly, why are MOH and CPF talking about ensuring the “viability of the insurance scheme” by excluding certain categories of Singaporeans from coverage? Since this is a state-run insurance scheme, it should be underwritten by the government as part of their social contract with Singaporeans.

Furthermore, with 75% of Singaporeans paying MediShield premiums, this should provide a huge financial base which private insurers do not enjoy.

Indeed, to get a picture of how “viable” MediShield currently is, readers can check out CPF Board’s 2008 Annual Report, which shows that last year, $303 million in premiums were collected and only $161 million was disbursed as claims. After factoring in all the administrative costs and interest earned, the MediShield fund stands at a healthy $205 million in the black.

Will it really become “unviable” if they start covering those few unfortunate newborns with congenital illnesses? (It should be noted that MediShield also excludes those over 85 years old from coverage, and it recently increased the premiums for all members, particularly the elderly.)

More importantly, what is wrong with MediShield going a little into the red? Can’t that be easily covered by the $5.6 billion that CPF gained as income from its investments of Singaporeans’ retirement savings last year?

MediShield is supposed to be one of the “3Ms” of the government’s much vaunted health care “safety net”. But if CPF Board can cherry pick who to insure and who to reject, then what makes it different from any profit-oriented private insurance company?

This revelation from MOH and CPF comes just as the debate about national insurance schemes is raging in the US. President Barack Obama in fact recognized this problem of insurers refusing coverage just when people needed it the most. In his health care speech to Congress this past week, he said of his new health care plan:

“What this plan will do is make the insurance you have work better for you. Under this plan, it will be against the law for insurance companies to deny you coverage because of a preexisting condition.”

Singaporeans have been led to believe that we already have a fantastic “public option” (i.e., a state-run health insurance scheme) in form of MediShield.

Well it seems MediShield is public alright, but with a lot of options for our bottom line driven government.

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8 thoughts on “MediShield should cover congenital illnesses”

  1. If the population pyramid stays the shape it has been (bottom heavy) forever, then Medishield can work without having to generate surpluses.

    But the population pyramid’s shape is getting top heavy. There is thus a case to be made for collecting surpluses now to fund deficits in the future.

  2. Thanks for pointing this out Gerald. It is alarming that many Singaporeans do not know what their benefits and rights are, especially in the mandatory fees that we pay to government bodies. Also I’m surprised that the CPF can ‘cherry pick and choose’. So the begging question is: What is the Medishield for anyway? (please don’t respond to this satirical question. I know what the Medishield does).

    This is usually what happens in mandatory policies and no-competition scenario. The consumers usually get the bad end of the deal.

    To add in what Jason wrote:
    “But the population pyramid’s shape is getting top heavy. There is thus a case to be made for collecting surpluses now to fund deficits in the future.”

    That includes ‘squandering’ the surpluses and funds collected on bad investments to the tune of >$50billion dollars.

    Kaffein

  3. haha – and the govt is worrying about why the reproduction rate is so low.

    The govt wants the cake and eat it – sure – go reproduce – but we won’t cover your child is she is ‘less than perfect’.

    Cruel. But that is the PAP govt.

  4. Jason – I see where you are coming from but disagree with your argument. MediShield should not collect surpluses now so as to fund deficits in the future. In and of itself, MediShield does not need to be profit-making or even break even any more than the CDCs should break even. This is all part of social welfare, which can and should be funded by our investment returns from our reserves.

  5. But if CPF Board can cherry pick who to insure and who to reject, then what makes it different from any profit-oriented private insurance company?

    You are very right in saying this. Medishield, as a govt scheme, has some obligation to cover what the private insurance companies do not cover.

    Unfortunately, people with pre-existing conditions, like the newborn mentioned in the forum letter, will have to pay higher premiums because the chances of them receiving larger insurance pay-outs are higher as well.

    So how high should the premiums be to create an acceptable mixture of risk pool? Troubling question the govt should sort out.

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