Projected Rise in Cost of Medical Services and Health Insurance in 2021

Mr Shawn Huang Wei Zhong asked the Minister for Health (a) what is the projected rise in cost of medical services and health insurance for 2021; (b) what are the active measures to be taken in 2021 to ensure that the rise in cost of medical services and health insurance remains low and affordable; and (c) what are further measures and considerations in 2021 to further flatten the curve of medical insurance premiums for elderly citizens as they age.

Several factors contribute to healthcare cost increases, including our ageing population, medical advancements that can improve life spans and the quality of life, as well as increases in healthcare manpower and other operating costs.

Managing healthcare costs has been a key priority of MOH. For example, to guide private sector doctors and healthcare providers in charging appropriately, and enable patients and payers in making better informed healthcare decisions, we published the private sector surgeon fee benchmarks in 2018, and further published a second tranche of fee benchmarks, for anesthetists’ fee and doctor’s inpatient attendance fees, in December 2020. This is on top of our regular publication of total bill size for common conditions seen in both the public and private hospitals.

As announced previously, Integrated Shield Plans (IPs) with zero co-payment coverage have also been progressively phased out, in line with our principle of co-payment in the consumption of healthcare. This is important to reduce the propensity for over-consumption, over-servicing and over-charging which can arise when there is no co-payment required for medical treatment. The MediShield Life Council has also noted the rapidly rising costs of cancer therapies and will be reviewing MediShield Life coverage for such treatment so they can be covered in a more sustainable and affordable manner. These measures will take time to bear fruit. We will need a sustained effort over many years and all stakeholders must play their part and exercise responsibility when choosing and recommending appropriate and necessary care.

For MediShield Life, the Government has accepted the MediShield Life Council's recent recommendation to adjust the premiums, to keep pace with the rising number of claims and payouts, and also to support the updating of claim limits and benefit enhancements to ensure that the scheme continues to provide adequate protection for Singaporeans. To ensure that MediShield Life premiums remain affordable, the Government will provide up to $2.2 billion for premium subsidies and support over the next three years, including support measures for lower and middle-income households, and Pioneer Generation (PG) and Merdeka Generation seniors. The net premium increase for all Singapore Citizens will be no more than about 10% in the first year. In addition, the lifetime annual MediSave top-ups for PG seniors will be increased from 2021 and premium payment will be deferred till end of this year for those who have insufficient MediSave balances and are unable to pay their premiums due to the economic impact of COVID-19. The financially needy can also apply for Additional Premium Support. No one will lose their MediShield Life coverage due to an inability to pay for their premiums.

Under MediShield Life, Singaporeans pay higher premiums when they are young, which are given back as rebates in old age to make premiums more affordable. Younger policyholders have more lead time to do so and will thus receive higher premium rebates when they reach old age in future.

Insurers offering IPs that provide additional private coverage above MediShield Life will also review their premium pricing from time to time. As IP premiums are higher than MediShield Life premiums, we encourage Singaporeans to carefully consider their ward preferences and long-term affordability of IP premiums when choosing an IP, especially since premiums increase with age.

In the longer term, staying healthy is key to managing healthcare costs. We encourage Singaporeans to lead healthy lifestyles, go for regular health screening as well as nationally recommended vaccinations, and will continue to enhance our outreach efforts. The Health Promotion Board has been at the forefront of our health promotion efforts and is continually enhancing our health promotion initiatives to ensure that they remain relevant and meaningful. For example, it launched the "Stay Well to Stay Strong" campaign last year to share bite-sized videos and articles with tips on practising good personal hygiene, healthy eating, exercising, and mental well-being. Individuals are also encouraged to go for regular, evidence-based, and subsidised health screening under the Screen for Life programme for early detection and management of chronic diseases, as well as subsidised nationally recommended vaccinations at participating providers such as the Community Health Assist Scheme General Practitioner clinics.

MOH will continue to monitor and review our cost containment efforts and the various features of healthcare insurance design, to ensure that healthcare treatments remain affordable and sustainable for Singaporeans.