The list is as follows:

(The left column shows the list of conditions while the right column gives some examples of conditions in the list)

Medical conditions that develop after the start of an individual’s MediShield (or integrated shield plan) cover are not considered to be pre-existing conditions and will not be subject to additional premiums.

These are some scenarios where the pre-existing condition loading is applicable:

1) If you are currently not covered by Medishield and suffer from one of the conditions in the list above.

2) If you were previously covered under Medishield only and an exclusion was imposed due to one of the conditions in the list.

3) If you had previously applied for an integrated shield plan (without being enrolled into Medishield first) and an exclusion was imposed due to one of the conditions in the list.

4) You were previously declined for Medishield cover due to one of the conditions.

The extra loading will not apply if:

1) You are enrolled into Medishield and one of the above conditions happened after you were covered under Medishield.

2) You were previously accepted into Medishield with no exclusions, subsequently develop one of those conditions and then apply for an integrated shield plan which imposes an exclusion on you.

Those affected will receive a letter from CPF board informing them that they need to pay extra premiums.

For more information and examples, you can refer to this MOH press release:

Less than 1% of Singaporeans will need to pay Additional Premiums

Some additional reading on Medishield Life:

Medishield Life and What It Means
Medishield Life summary
Medishield Life full report

Feel free to ask any questions in the comments section below.

To leave your comments, please go to : Who Needs to Pay Additional Premiums for Medishield Life?

Eligibility Criteria for MediShield Life Premium Subsidies for Lower- to Middle-Income Households

• Have a household monthly income per person of $2,600 or less per month; and
• Annual Value of residence is $21,000 or less; and
• Individuals who own multiple properties will not be eligible.

No application for the subsidies is required, as existing information in Government databases will be used to determine your subsidies.

However, as some of the information in official records may not be fully updated, you may wish to verify your household members using the online Household Check tool here: 

Household check for Medishield Life Subsidies

This will help to ensure that you and your family members receive the correct amount of Premium Subsidies for which you are eligible.

Today (19 June) is the last date to verify your household members so you may want to do it today if you haven’t done so. Only one member in each household is required to do so.

To leave your comments, please go to : Household Check for Medishield Life Subsidies

With all other factors unchanged, a rising number of claims as well as higher average claim amounts will lead to rising premiums.

The rising number of claims and claim amounts can be due to a variety of factors, such as:

• Aging population
• Advances in medical care which result in earlier detection, more options for treatment and the use of more sophisticated equipment
• Higher fees charged by doctors
• Unnecessary treatment, sometimes due to fact that it’s paid for by insurance

Dr Tang Kok Foo has nailed it right on the head with his comments that  prices of surgeries has gone up multiple fold and even quoted examples he personally knows of where treatment might not be necessary.

The surgical fee for simple lumbar disc surgery has shot up from $5,000 to as high as $25,000, even when performed by junior doctors.

I have been in private practice for 24 years and have not encountered any local surgeon operating on a closed collarbone fracture until the past year, when there were three cases. Last year was also the first time I saw a patient undergo an operation for plantar fasciitis, or jogger’s heel.

“Pay as charged” insurance policies also encourage doctors to charge higher fees, since these will be covered by insurance. A patient once said that a surgeon told her not to worry about her $55,000 cervical spine surgery as it would be paid by the insurance company.

Mind you, these are statements made by an expert in the field with insider knowledge, and not a general statement from a casual observer.

That is why I’m not a fan of medical insurance plans that cover 100% of the cost. It tends to promote the wrong kind of behaviour among consumers, inevitably leading to higher claims and premiums.

Let me give two examples of how consumer behaviours can affect the claims.

My Knee Injury

Last year, I suffered a knee injury and had to seek treatment at a government hospital.

The specialist did an X-ray and did not detect anything that was fractured or broken. However, she was not able to determine the exact injury and recommended a period of physiotherapy for treatment to see how the knee responds.

I asked her whether we should do a MRI scan to help in the diagnosis.

She was reluctant to call for an immediate MRI as she felt it would be expensive.  Judging from my symptoms, she did not think that surgery would be required. Even if we did the MRI scan, the treatment would probably still be physiotherapy.

Even though my bill would be covered by insurance, I decided not to insist on the MRI scan. Eventually, after a period of physiotherapy and rest, my knee got better.

I never found out which was the exact ligament that was causing the trouble but my insurance company saved money from not having to pay for a MRI scan.

I am pretty sure that if I had gone to see a private specialist, he or she would have ordered the full battery of scans right from the onset.

My Client’s Leg Injury

One of my client injured his leg during an exercise.

His first thoughts (because he was covered by insurance) was to see a specialist to do a MRI scan. I advised him to see a GP first as a referral letter would be required. In any case, it would be good to let the GP decide whether further treatment is warranted.

Eventually, he did not see any doctor and the injury recovered by itself in a few weeks.

In this case, there wasn’t even a need to make any insurance claim.

Co-payment is a Necessary Evil

Personally, I feel that a co-payment of 10-20% of the bill should always be part of a medical insurance plan to deter unnecessary treatment.

I’m therefore not supportive of Medishield Life reduction of co-payment from 10 per cent to 20 per cent today to 3 per cent to 10 per cent. It is better for them to keep the present levels but have a maximum co-payment ceiling to protect against catastrophic bills.

Instead of reducing the co-payment, I would rather they reduce the deductible so that more people can benefit from the plan.

What do you think about our rising medical costs?

To leave your comments, please go to : Rising Health Insurance Premiums in Singapore

Insurance Loss Ratio

From an insurance point of view, a loss ratio is defined as the ratio of what an insurance company pays in benefits and associated expenses (such as adjustments) to what is collected in premiums, expressed as a percentage.

It was highlighted in Parliament that the loss ratio of Medishield last year was around 44%. Meaning for every $1 of premiums collected, 44 cents was paid out.

Solely based on this figure, the premiums would appear high. It could easily be halved from current levels and the Medishield scheme would still be very healthy with a loss ratio of less than 90%.

Health Minister Gan Kim Yong explained that the 44% was not the correct figure to look at. A better comparison would be with the incurred loss ratio as it also took into account future liabilities (of incurred claims).

The example given was that someone with kidney failure will need to make dialysis claims not only in the first year, but for the rest of his life.

If you factor in all these potential future claims, the incurred loss ratio for Medishield over the last five years was actually 96%.

I did a mental thought experiment and was not very convinced with the use of this incurred loss ratio.

Before I share my thought experiment, just a small disclaimer. While I’m fairly well versed with health insurance, I’m no actuary. Hopefully, someone more qualified can help to expand on these ideas and correct me if I’m wrong.

One Person Medishield

Let’s look at an extreme case where Medishield only covers one person and every year, this person pays $1000 in premiums.

His kidney fails and he needs regular dialysis, of which Medishield pays $900 every year. The means that the loss ratio is 90%.

If the premiums and Medishield claim for the dialysis does not change for the rest of this person’s life, the Medishield scheme would still be completely solvent as it only pays out 90% of premiums collected.

This is no need to factor in for any future losses as the system basically takes care of itself year after year.

Now let us look at the incurred loss ratio for the same example.

First of all, we need to estimate what is the potential future liability of this kidney dialysis patient.

Say we use 9 years of future claims.

The total incurred losses (current + potential) now becomes 900 + (900 x 9) = $9000 and the incurred loss ratio works out to be a staggering 900%.

To keep the incurred loss ratio at 90%, the annual premiums for this person will have to be increased to $10,000!

My calculation of the incurred losses did not take into account the present and future value of money. If I did, the losses and premiums will be lower.

With regards to the use of  incurred loss ratio to determine the level of premiums, I don’t like it for a few reasons:

• A lot of premiums is collected upfront and Medishield ends up having a lot of money to invest, which might not be its core expertise.
• It is not easy to determine future liabilities and brings another uncertainty to the calculation of the incurred loss ratio.
• With Medishield Life going to be a compulsory scheme, there is even less of a need to collect too much surplus as it is possible to adjust the premiums accordingly whenever overall claims go on a sustained uptrend. As a nationwide scheme, the pool is also huge and total claims will be less volatile and predictable.
• Private health insurance providers that have a smaller pool will have claims that are more volatile and cannot easily raise their premiums without the risk of their customers leaving and making their pool even smaller.

Personally, I think Medishield premiums are priced too conservatively in accumulating reserves. The Medishield Life Review Committee has recommended greater transparency on their reserve requirements. That, together with its premiums pricing principles, will help the public  to understand and appreciate the scheme better.

To leave your comments, please go to : Of Medishield Reserves and Its Loss Ratio

For the full Medishield Life report, you can download it here:

MediShield Life Review Committee Report Final (full report)

Medishield Life at a Glance (2-page summary in 4 languages)

If you haven’t already done so, you will also want to read my Medishield Life summary.

One thing that everyone has been anxious to find out is the new premiums for Medishield Life. Here’s a partial summary (full tables at the end):

There is a Medishield Life premiums calculator that can be found here: Medishield Life premiums

The bad news is that premiums are going to double or triple for the younger age groups.

The good news is that there will be temporary subsidies for everyone and permanent subsidies for the lower income.

However, everyone will feel the full burnt of the premium increases from 2019 onwards when the transitional subsidies ends.

One observation I made was that for some age bands, the new Medishield Life premiums (that is meant to provide coverage for B2 and C wards) is even higher than the current premiums for the private integrated shield plans that can coverage for B1 or even A wards (page 100 of report)!

This is very bad news for all integrated shield plan owners.

There are two reasons for this huge increase:

1. Lower co-insurance for Medishield Life
2. More significantly, shifting the premium cost of Medishield Life downwards towards the younger age group. See page 14 of the report, “Distributing Premiums More Evenly”.

Even then,  I wonder whether the premiums are set too aggressively. With regards to this aspect, the call by the committee for more transparency on the Medishield fund is a good one (page 72).

A new recommendation that has not been announced previously is the push for government to regulate a standardized integrated shield plan that provides coverage up to B1 level (page 79). The maximium Medisave withdrawal that can be used to pay for Medishield approved plans should also be set at that level (page 80).

I think this is a good idea that will suit the needs of many Singaporeans.

The committee also spoke about the duplication with Group Employer Benefits (page 85), which is something that I wrote about previously : The Benefits of Portable Medical Plan. The committee urged employers and unions to work on this problem together.

Anyway, now that the premium values are available (see below), I will be able to finish my article on the relationship of Medishield Life with the private integrated shield plans, and what are the factors to consider in deciding whether to keep or drop the plans. Hope to get it completed sometime next week.

To leave your comments, please go to : Full Medishield Life Report