Co-Payment in Integrated Shield Plans for Specific Hospital Categories and Breakdown of Average Claims Made through Full Riders of Integrated Shield Plans

Miss Rachel Ong asked the Minister for Health how can the Ministry safeguard the interests of policyholders against insurance companies who change the terms and conditions of full-cover Integrated Shield Plans signed prior to 8 March 2018.

Miss Rachel Ong asked the Minister for Health between 2015 and 2020, what is the increase in average claims made through full riders of Integrated Shield Plans covering (i) private hospitals (ii) Class A wards in restructured hospitals and (iii) Class B1 wards and below in restructured hospitals respectively.

Co-payment is an important principle in the design of healthcare insurance. It encourages policyholders and their doctors, to consider the necessity of the medical treatment and its cost, so that they can make an informed decision on the appropriate healthcare services. This encourages prudence and keeps healthcare cost, and health insurance premiums, affordable and sustainable in the long term.

This principle applies regardless of hospital category. Integrated Shield Plan (IP) full riders that covered the entire co-payment under the IPs were not in line with this principle. Such riders allowed policyholders to avoid co-payment regardless of their bill size, and had contributed to over-consumption, over-servicing and over-charging. Between 2015 and 2020, the compound annual growth rate of claims incidence was about 15% for full riders of private hospital IPs, and about 9% for full riders of restructured hospital IPs. For riders with some form of co-payment of private and restructured hospital IPs, this figure was close to 0%. Over the same period, the average bill size for claims from full riders were at least 20% higher than riders with some form of co-payment, for private and restructured hospital IPs.

This was one of the reasons why MOH had announced the requirement for a minimum 5% co-payment for new riders across all settings in March 2018. This would apply for new riders sold from 1 April 2019, while riders sold after the announcement, between 8 March 2018 and 31 March 2019, would have to transition onto these new co-payment riders by 1 April 2021.

While this co-payment requirement was not mandated for riders purchased before 8 March 2018, some insurers have recently announced that they will also be including a co-payment component to these riders. This is allowed under their contractual terms with their policyholders. MOH has encouraged the insurers, in considering these changes, to ensure that their policyholders' interests are safeguarded even as insurers seek to ensure the sustainability of their portfolios. As an additional safeguard, insurers are required to clearly explain these changes to their policyholders at least 30 days before they take effect.

To provide their policyholders more assurance after these changes, we understand that some insurers have also introduced co-payment limits for treatments that are provided by their panel doctors, or for pre-authorised treatments. Policyholders can also continue to tap on MediSave to pay the co-payment amount under their riders, subject to the MediSave withdrawal limits.

All stakeholders, including the Government, healthcare providers, insurers and policyholders, have a part to play in keeping healthcare costs affordable and sustainable. These changes, together with other efforts by the Government, such as the publication of fee benchmarks and appropriate care guides and drug guidances, will further encourage prudent use of healthcare services, and contribute towards keeping healthcare costs sustainable for all Singaporeans. MOH will continue to work with all stakeholders to encourage appropriate and cost-effective treatment.