MediShield should take on more risks on behalf of Singaporeans

While I acknowledge that the enhanced MediShield coverage may require some premium increases to keep the scheme solvent, is there is a need for such steep increases in premiums and deductibles? Less than 0.1% of MediShield policyholders reach their policy year and lifetime claim limits, so the cost impact should be limited. Furthermore, between 2006 and 2010, MediShield collected an average of $131 million more in premiums each year than it paid out in claims. Even factoring in the need to set aside an amount each year for its reserves, I believe there is there room for the MediShield scheme to take on greater risks on behalf of Singaporeans.

The Straits Times asked me for my views on the latest changes to MediShield. This is what I told them:

I welcome the prospect of MediShield coverage being extended to babies with congenital problems or prematurity-related complications. I had called for during the Committee of Supply debate in Parliament in March. I am also glad to note the planned increase in policy year and lifetime limits.

However I am concerned about the impact of the $500 increase in deductibles for all patients in Class C and B2 wards. This will amount to a 50% hike for Class C patients, which will adversely impact many lower income patients, who will have to fork out more in cash or Medisave payments. The increase in premiums will affect the elderly more than the young, as the elderly will see a bigger premium hike at a time when they are approaching, or have reached, retirement age.

While I acknowledge that the enhanced MediShield coverage may require some premium increases to keep the scheme solvent, is there is a need for such steep increases in premiums and deductibles? Less than 0.1% of MediShield policyholders reach their policy year and lifetime claim limits, so the cost impact should be limited. Furthermore, between 2006 and 2010, MediShield collected an average of $131 million more in premiums each year than it paid out in claims. Even factoring in the need to set aside an amount each year for its reserves, I believe there is there room for the MediShield scheme to take on greater risks on behalf of Singaporeans.

MediShield is, after all, supposed to be a form of social health insurance, not a commercial insurance scheme.

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