More in Singapore expected to downgrade private health insurance policies as premiums rise
MediShield Life premiums could go up in April by as much as 35 per cent over a three-year period, depending on the individual’s age group.
A patient speaking to a nurse in a Singapore hospital.
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SINGAPORE: Market watchers expect more in Singapore – especially retirees and those above 60 – to downgrade their private health insurance plans, as premiums for Integrated Shield Plans (IPs) look set to rise from next month.
This is in line with an increase in MediShield Life premiums, which could go up in April by as much as 35 per cent over a three-year period, depending on the individual’s age group.
For most Singapore residents, however, this will be fully offset by government support measures.
FEWER OLDER PEOPLE OWN IPs
About seven in 10 residents are currently on IPs, which offer private insurance coverage on top of MediShield Life – Singapore's national health insurance scheme.
Between 2020 and 2023, 2.2 per cent of people over the age of 60 gave up their IPs altogether, falling back on the basic MediShield Life, according to the Ministry of Health (MOH).
In contrast, the proportion of people owning IPs rose by 1.1 per cent among those aged 60 and below.
There was a 5 per cent drop in people with private hospital IPs between 2021 and 2023, said MOH.
The ministry said it “encourages everyone to review their private insurance coverage holistically, taking into consideration their care preferences, what they would like to be covered for, and whether they can afford the plan in the long term”.
For retired audit director Abdul Hamid Abdullah, for example, he could be paying S$200 (US$150) more in MediShield Life premiums come next month. This marks an increase of about 18 per cent to S$1,300.
The 69-year-old told CNA he is “not too concerned” about the changes to MediShield Life, given that he gets medical benefits as a pensioner under the government’s civil service card (CSC). But this may not be enough as he grows older.
“Health is the most important thing on my mind … because I’m already suffering from a number of chronic diseases,” he noted.
These include heart disease, diabetes and high cholesterol.
“I just wish that whatever illness and diseases that I may face in my golden years, so to speak, or aging, it is covered,” he added.
“And I have peace of mind because I'm a CSC card holder, but I do not know whether that will be sufficient, and whether there is a necessity to take up additional insurance and so forth.”
Mr Abdul Hamid said he has not considered taking up IPs at this point, as he is entitled to be admitted to Class A1 private wards under his CSC card due to his heart condition.
Still, he said he would advise those in his age group to consider whether they need to supplement with IPs or other additional insurance schemes.
Impact of MediShield Life premium increase
The changes to MediShield Life mean that consumers will get increased coverage in the form of higher claim limits, which will rise by S$50,000 to S$200,000, said Mr Eddy Cheong, CEO of insurance firm Havend.
“It also means taking care of high-cost drug treatments, as well as expensive treatments, advanced treatments like cell tissue, gene therapy products,” he noted.
“Consumers will be confident that nine or 10 of the subsidised bills can be covered through MediShield Life in subsidised wards. So this is a good thing for consumers.
“However, with all this higher increase in benefits, that will translate to higher premiums.”
Deductibles - or what is paid out of pocket before an individual’s insurance plan covers the remaining costs - are also set to increase.
Currently, deductibles range between S$1,500 and S$3,000 depending on ward class and age. This could go up by another S$1,500 in two years’ time.
A new outpatient deductible of S$500 per year will also be introduced on Jan 1, 2026, meaning patients have to pay more for normal-sized bills.
To cushion the impact of higher premiums on Singaporeans, the government will provide an additional S$4.1 billion in support measures over the next three years.
This package comprises S$3.4 billion in MediSave top-ups and S$0.7 billion in premium subsidies.
For more than nine in 10 Singaporeans, the additional MediSave top-ups, subsidies and support will “more than offset” the cumulative S$1.8 billion in additional premiums over the next three years, said MOH.
COULD INSURERS PUSH UP IP PREMIUMS?
However, worries have surfaced that private insurance providers will further push up IP premiums to tackle medical inflation and overconsumption.
Mr Eddy Cheong, CEO of insurance firm Havend, said that with rising IP premiums, people have been unhappy that treatment at private hospitals is getting more expensive.
“Class A wards or private hospitals are becoming out of reach, especially for people who are older – seniors above 60 – who are no longer working,” he noted.
He said this could be down to how IP plans are being designed now, with “very high” and “very generous” limits that “snowball into higher claim rates”.
“There is a need to arrest the situation … Perhaps some of the considerations could be to reduce, to resize these benefits to something more affordable,” he added.
Health Minister Ong Ke Yung also warned last year that rising medical claims enabled by insurance policies were leading to an unhealthy "buffet syndrome", which in turn increases costs.
The Life Insurance Association said that Singapore’s seven IP insurers work with MOH and have internal systems in place to address inappropriate claims.
CNA reached out to these insurers to find out if they would raise premiums or deductibles when the changes to MediShield Life kick in next month.
While four of them did not respond, AIA Singapore said it has introduced and designed rider options, like one where premiums remain unchanged, regardless of whether claims are made on the policy.
Meanwhile, Prudential Singapore said it encourages customers to seek treatment at partner hospitals, which will allow them to save on renewal premiums.
A Great Eastern spokesperson said it adjusted the pro-ration factors for its Class A and B1 IP plans last year to “better reflect the cost gap across the various private and public ward types”.
“As Singapore’s healthcare needs evolve, we will continue to manage these shifts and work closely with stakeholders to ensure our policyholders continue to receive the protection and peace of mind they need,” added the spokesperson.
