The following letter appeared in Straits Times forum on 2 February 2015 expressing my concern that any increase in Integrated Shield Plans (IPs) premiums do not come with any increase in benefits to the policyholders:
I URGE the Government and insurers to be cautious when increasing the premiums for Integrated Shield Plans (IPs) for MediShield Life ("Bill passed, making health insurance for all a reality"; last Friday).
Although MediShield Life offers better benefits - such as lifetime coverage and higher claim limits - these enhanced benefits are already enjoyed by the majority of existing IP policyholders.
Moreover, most IP policyholders do not have any exclusions if the plans were bought when the policyholders were young.
Increasing the premiums for these policyholders is like penalising them for prudent financial planning.
My fear is that many Singaporeans may think that it is no longer necessary to take the initiative to exercise prudent financial planning; after all, the Government will always take care of them.
Since many IP policyholders will not be experiencing an increase in benefits, would it be fair for them to pay more for a product that is still the same?
The last time MediShield premiums were revised, many insurers took the opportunity to increase their premiums by a huge quantum.
This time around, the Government should ensure that these insurers do not take the opportunity to increase their premiums greater than the increased premium amount for MediShield Life.
While it is possible for policyholders to switch insurers if the premiums get too expensive, this option is not available for those who are no longer in the pink of health. This means free competition does not exist for this group of policyholders.
Without free competition, IPs should be regulated in a similar fashion as public transport, where fare increases are subject to the approval of a committee, based on a pre-defined formula.
Another problem I foresee is that a large number of these IP policyholders may downgrade their plans if premiums become too expensive.
As a result, government hospitals would see a significant increase in the patient load.
Are restructured hospitals prepared for such an increase in the number of patients who would have otherwise gone to private hospitals?
I was at a restructured hospital recently to visit a relative and it was already operating at its maximum capacity.
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