Inflation in Premiums for Private Hospitalisation Insurance Plans

Assoc Prof Daniel Goh Pei Siong asked the Minister for Health (a) for the past five years, what has been the trend in premium inflation for private hospitalisation insurance plans; and (b) what measures have been taken to regulate over-charging and over-consumption in the private medical sector.

Over the last five years, premiums of the private insurance component of private hospital Integrated Shield Plans (IP) have increased by an average of 7% per year. The increases have been more pronounced in recent years, especially for IP riders which typically have zero co-payment. Between 2016 and 2019, premiums of riders and the private insurance component of IP rose by an average of 24% and 10% respectively each year. These trends are largely reflective of increases in private hospital insurance claims.

Such increases in claims and premiums are not sustainable in the long term. MOH has thus introduced a range of initiatives to address concerns over over-charging and over-consumption of private healthcare services, while ensuring that patients continue to have access to good quality and appropriate healthcare. The initiatives are aimed at encouraging doctors and providers to prescribe and charge appropriately, helping patients to make more informed and appropriate decisions and guiding insurers to have more suitable healthcare insurance design.

Doctors and healthcare professionals should make recommendations and decisions on care options that are both clinically-effective and cost-effective. To help them, MOH's Agency of Care Effectiveness has been issuing appropriate care and drug guidances since 2017.

In November 2018, MOH started publishing fee benchmarks for private sector professional fees. These will guide appropriate charging among healthcare providers, and enable patients and payers to make better informed decisions.

Co-payment is an important healthcare financing design feature to ensure that all stakeholders have a stake in their healthcare decisions. In March 2018, MOH announced the requirement for minimum co-payment for new IP riders. From April 2019, new IP riders must incorporate a co-payment. Insurers are also improving their claims management measures with the use of panels and pre-authorisation processes, and stepping up their claims scrutiny over questionable charges.

Ensuring affordable and sustainable healthcare and healthcare insurance will require each stakeholder – doctors and healthcare providers, patients, insurers and government – to play a part.