Impact on MediSave Withdrawal Limits When MediShield Life Premium Payments Rise

5 Mr Gerald Giam Yean Song asked the Minister for Health in view of the proposed increases in premiums and coverage of MediShield Life (MSHL), whether MediSave withdrawal limits for MSHL premium payments will be raised so that MediSave can be used to fully pay for premiums for MediShield Life Basic, Integrated Shield Plans for Class B2/C wards and the Standard Integrated Shield Plan (for public hospital Class B1 coverage), for all age groups.

The Senior Minister of State for Health (Dr Koh Poh Koon) (for the Minister for Health): MediShield Life premiums are fully payable by MediSave. There are no withdrawal limits. Family members can also utilise their MediSave also to help pay the premiums for their loved ones.

The additional private insurance component of the Integrated Plans (or IP) is also payable by MediSave, up to the Additional Withdrawal Limits (AWLs) which range from $300 to $900 per year, with higher limits for older policyholders as their premiums are higher.

The AWLs strike a balance between helping Singaporeans pay for their IP premiums using MediSave and ensuring that they have enough MediSave for basic healthcare needs, especially after their retirement. As MediShield Life already provides universal and basic insurance coverage for all Singaporeans, policyholders will need to consider whether they need the additional IP insurance and the affordability of the IP premiums when choosing these plans.

Mr Speaker: Mr Gerald Giam.

Mr Gerald Giam Yean Song (Aljunied): I thank the Senior Minister of State for his answer. I have two supplementary questions.

First, with the proposed increased coverage of MediShield Life, does this reduce the burden on the lower tier Integrated Shield Plans and, hence, translate to lower premiums for the IPs?

Second, according a comparison of standard IPs for Class B1 coverage on the MOH website, the benefits of standard IPs are identical across all IP insurers. This being the case, has the Government considered having CPF take over the running of standard IPs for Class B1 coverage so that the costs and premiums can be kept lower? By having CPF take over the standard IP, risks can be further pooled rather than split across different insurers and the premiums can be possibly lowered.

Dr Koh Poh Koon: Sir, I do not quite understand the Member's first question. So, I will ask the Member to clarify again later. But for the second question on the standard B1 coverage, we must understand that, at this moment, the Basic MediShield Life coverage already covers for nine out of 10 subsidised healthcare bills. So, the additional B1 coverage is really that little bit of icing on the cake and I think it would not be useful for CPF Board to take over all coverage, including up to B1, because there is still a role for the market to play. But by standardising the level of coverage and ensuring that the premium is uniform, it gives Singaporeans the option to choose something beyond the coverage of nine in 10 that are already covered by the current Basic MediShield plans.

Mr Gerald Giam Yean Song: Sir, to clarify my first question, what I meant is that, currently, MediShield Life covers a certain amount. Now, the proposal is to increase the coverage or MediShield Life. Would that eat into some of the Integrated Shield Plan coverage such that the premiums of Integrated Shield Plans can be lowered?

With regard to the second question which the Senior Minister of State answered, he mentioned that B1 plans are the icing on the cake. But I understand that the B1 plans are actually quite popular among Singaporeans, to the extent that the Government has gone to the extent of standardising the benefits of all the B1 plans so that there is not so much need for comparison for premium holders. So, the question is: can that, therefore, be brought under the CPF fold so that we can possibly benefit from risk-pooling and, possibly, lower premiums for premium holders?

Dr Koh Poh Koon: Sir, we will take the suggestion by the Member on the B1 plans into consideration. This is an on-going process of reviewing the utilisation over time and we may evolve some of this coverage over time as well. But at this moment, we will focus, because MediShield Life is still a very new plan that we had started in the last five years or so. So, we want to let it stabilise and see how the utilisation of the Basic plan, which covers nine in 10 subsidised bills, goes before deciding whether we should broaden the inclusion of B1 into our fold as well. The private insurance market is also evolving. So, this thing will take some time to settle. Nonetheless. we will take the suggestion into consideration

The increased coverage for MediShield Life, the expansion of increased coverage up to about 120,000 claims per year, actually, that refers to total bill size. That does not necessarily mean, therefore, that the need for private plan is negated by the increased coverage, because there is still healthcare inflation and choosing private coverage is actually a matter of personal choice. Some people prefer to go to the private sector where they can have, perhaps, a more personalised type of higher value service. But those who are looking for good value care will still come back to the institution in our restructured hospitals. So, I do not think those two are mutually inclusive and increasing coverage for one would necessarily eat into the other.