Reviewing Regulatory Framework for Integrated Shield Plans and Assessing Practice of Pre-authorisation

Mr Vikram Nair asked the Coordinating Minister for Social Policies and Minister for Health what are the measures the Ministry intends to take to address the issues of escalating private healthcare costs, insurance premiums and insurers refusing pre-authorisation certificates at certain hospitals.

Dr Hamid Razak asked the Coordinating Minister for Social Policies and Minister for Health given that pre-authorisation helps ensure that policyholders have access to non-panel doctors and receive cost-effective treatments, whether the Ministry will implement measures to ensure that policyholders continue to have access to the full benefits of their Integrated Shield Plan should an insurer stop issuing pre-authorisation certificates.

Mr Yip Hon Weng asked asked the Coordinating Minister for Social Policies and Minister for Health given recent unilateral changes by Integrated Shield Plan insurers, such as new pre-authorisation rules for existing policyholders (a) whether the Government will consider a dedicated healthcare insurance law to protect consumers and establish a mandatory dispute resolution platform; and (b) whether there are regulations to prevent insurers from influencing healthcare decisions against policyholders’ best interests.

My response will also address oral Question Nos 73 to 75 from the Order Paper on 22 September 2025.

Allow me to begin by putting the issue into perspective. The Ministry of Health (MOH) has previously explained the current state of private healthcare and insurance: insurers, private hospitals and providers have got themselves tied up in a knot, resulting in escalating private hospital bills, rising premiums and more safeguards introduced to the claims process. The concerns raised by Members point back to this deeper issue.

A significant root factor is the design of private health insurance. Insurers know that policyholders are worried about unexpected large hospital bills, so they offer plans with generous coverage and benefits through Integrated Shield Plans (IPs) and riders, covering almost to the last dollar with little co-payment.

But when someone else – in this case, insurers – pays for almost the entire bill, the dynamic between patients and providers changes. There is tendency for over-servicing and unnecessary treatments.

This is backed by data. The likelihood of a patient with a private hospital rider making a claim is 1.4 times that of a patient without a rider. The size of the claim is also on average about 1.4 times that of a patient without a rider.

Rising private hospital claims put a strain on insurance. For IP portfolios to be sustainable, insurers raise premiums to cover claims. Policyholders have seen sharp increases in premiums for private hospital plans, namely IPs and riders. They also introduce more safeguards to manage claim costs, which helps insurers moderate premium growth to some extent.

So, in response to the Member’s question, Mr Fadli Fawzi is right that features such as "as charged" expands coverage and contributes towards weakening the discipline of insurance claims.

There are other features too, such as covering deductibles and co-payment, which also need to be looked at.

But private healthcare insurance is in its current unsustainable state not because of collusion or anti-competitive behaviour. That usually leads to supernormal profits by market players at the expense of consumers. Here, insurers are either making losses or barely breaking even on their health portfolios. The situation is due to excessive competition that has gone wrong – another type of market failure.

Mr Yip Hon Weng and Ms Mariam Jaafar asked if there could be new laws for stronger regulatory oversight. We already have a Competition Act to proscribe collusion and anti-competitive behaviour. If we strengthen regulatory oversight, it should be to correct the market failures arising from unsustainable and self-harming competition that have taken place today. Regulations to prevent insurers from correcting the current problem will likely exacerbate the situation, make private insurance even more unsustainable, with no market correction mechanism.

Should there be disputes over specific claims, policyholders can take it to the Financial Industry Disputes Resolution Centre (FIDReC), an independent and impartial institution that assists with insurance-related disputes. The Monetary Authority of Singapore (MAS) will also take action against insurers if they do not pay claims in accordance with policy terms and conditions or have unfair claims handling practices.

MOH will continue to work with MAS to exercise regulatory oversight over IP insurers and products.

Members also asked about the practice of pre-authorisation. Pre-authorisation is an administrative arrangement – not a contractual benefit – offered by insurers. It enables insurers to review and approve medical treatments and associated fees, to make sure that they are medically necessary and covered by the policy, before they occur. This arrangement also gives patients the assurance about what will be covered. Today, five of the seven IP insurers provide pre-authorisation. Regardless of pre-authorisation, IP policyholders enjoy their full contractual benefits and can still make claims for their treatments according to the terms and conditions of their policy.

Panels are another means that insurers use to manage claim costs, by ensuring that doctors on the panel adhere to fee ranges set by the insurer. Seeing a panel doctor typically allows policyholders to enjoy more favourable co-payment terms. All policyholders remain entitled to their full contractual benefits, even if they seek care from a non-panel doctor.

Most insurers have at least 600 private specialists on their panels. MOH monitors insurers’ practices and works with them to ensure adequate panel coverage at the overall and speciality level. With Extended Panels, most IP insurers also allow policyholders to access doctors on other IP insurers’ panels, subject to review.

The trends we see – escalating costs, premiums, tightening claims management practices – are consequences and symptoms of the knot that insurers, doctors, hospitals and policyholders are caught in.

Regulation will not loosen this knot; it will make it worse. If we restrict insurers’ claims management practices, we will likely see even larger premium increases. And if we cap premium increases, products will become unviable, which will hurt policyholders.

So, we need to loosen and untie this knot, step by step. Every stakeholder needs to do its part and MOH will facilitate the process.

We have urged the insurance industry to relook their overly-generous policy design, such as minimal rider co-payment. Insurers will need to balance between providing assurance and protection, and encouraging prudent consumption and servicing.

We will do more to educate consumers on choosing the appropriate health insurance coverage for their needs. We are in fact launching a public education campaign soon.

To rein in private sector cost increases, MOH has developed and published over 2,800 doctor fee benchmarks, which providers and insurers reference to set fees and review reimbursements respectively. We will study what more can be done to guide fee setting by private hospitals.

MOH will also continue to work through the Multilateral Healthcare Insurance Committee, which brings together key stakeholders from healthcare providers, medical professionals, insurers and consumer representatives, to address these issues collaboratively.

Thank you, Mr Speaker. I thank the Minister of State for her response. Many Yio Chu Kang seniors who have been faithfully paying their premiums are now worried that with the sudden rule changes, like the new pre-authorisation requirements, it could disrupt their ongoing treatments.

Could the Minister of State explain what safeguards are in place to ensure that existing policyholders, especially seniors who are in the midst of treatments, are not disadvantaged by such unilateral insurer decisions?

And secondly, some of these residents have also asked me if an insurer delays or rejects a pre-authorisation without good reason, what recourse do they have? And I hear from the Minister of State that fee benchmarks are being published, but will the Ministry also consider publishing data on insurer performance, such as approval rates, turnaround times, appeal outcomes, so that Singaporeans can see whether insurers are acting in their best interests?

I thank the Member for your question. I just want to clarify though that we are discussing this matter in the context of the IPs. As you can appreciate, the IP is a term insurance, very much like typical insurance policies. It is a term insurance which only goes towards coverage for the duration of the term.

So, if your residents are in a situation where they are within that period of their term and they then meet the requirements and the criteria for their claims, I do not see why they would be affected by anything. Because they lie in the bed they make, the contract that they have signed within that contractual period.

When we talk about pre-authorisation, as I explained earlier, it is a slightly different animal. It is not part of the term's conditions. It is an administrative process. It allows for treatments that are pre-planned, hospitalisation or surgery that is coming up for policyholders to get confirmation to see whether this treatment is something that their insurers would pay for.

What we hear, what we understand is that, typically if there are rejections, it is possibly because there is an exclusion in the original contract, so you could not have gotten it covered anyway, or the fees are too high, the treatment plan may be too aggressive, meaning you have not considered other treatment plans. But it still does not take away from the fact that if you do then consume a treatment and it falls within your contract, you can still claim from your insurer. It is just that there was no pre-authorisation.

As for the recourse, so if let us say, you submit a pre-authorisation claim and it is rejected, or in that recent case, suspended, it just means that you need to consider your options. If you feel that the treatment or you accept the reason that the treatment is aggressive or it is not covered, then you may need to consider whether you want to choose an alternative treatment. Or if you feel that actually that is a treatment that is purely covered, you can go ahead and you will then have to make the claim subsequently.

There can still be disputes, of course, as with other similar grounds. But there is very little leverage. There is going to be back and forth, but there is lesser leverage for the insurers to reject. Because if it is truly something that is circumscribed by the contract, then there is no running away from having to pay out according to the terms of the contract.

I thank the Minister of State for the explanation and the plans in this complex area. I agree that the greater the insurance coverage, the more likely the cost will be to escalate.

I have two clarifications on this. One, is the Ministry looking at any regulatory measures to make sure that healthcare providers do not use insurance as an opportunity to overcharge? And this may include disciplinary proceedings, and so on.

The second is from the point of view of the insurance users. I take the Minister of State's point that this is a contract, but in practical terms, quite often the people who buy insurance policies do so on standard terms; they do not negotiate it and they do not really have that option to go to a different insurer so readily, once they have been in a contract for a certain period of time. So, I think there is an element of consumer protection that needs to go in as well. Even though the insurance is renewed yearly, if the coverage does get worse, I think the Ministry should have some guidelines on when it will step in to protect consumers.

On the first question, I just want to assure the Member that we take a multi-pronged approach in trying to deal with this matter. Our conversations, discussions and engagements with insurers on their insurance product design is one, but we are also looking at different elements, including introducing fee benchmarks which we have done since 2018. We have introduced benchmarks for private professional fees and this guides the pricing and guards against overcharging. So, there are some levers here.

We are now studying the possibility of going beyond professional fees, by introducing more benchmarks for hospital charges to guide fee setting by private hospitals. So, that is one measure in which we are trying to do.

Separately, related to the Member's second point, it is also about consumer education. And that is also another aspect of the work that we are doing. I mentioned earlier that we are going to be embarking on the public education campaign. It is about explaining and providing information to policyholders about the different options they have, how they should calculate, what coverage they need versus how much they want to spend on now. Because, sometimes, it is just over-coverage and you are not actually going to be consuming it; it is not going to be good for you. So, education should also entail them appreciating what are some of the options they have so they do not get caught up in a particular situation which is not feasible for them.

And so, basically it is about trying to ensure that consumer protection is something that is top of mind.

Regulatory was one of the things that the Member asked about, regulatory measures. It is not that it is not without any regulatory measures. Right now, MOH and MAS work together, we have intervened in recent years to improve consumer fairness and protection. But we have also already, in place, regulatory measures to ensure that the insurance providers keep to certain key parameters. For IPs, for example, they tap on MediSave as part of the payment and so, we have levers to make sure that they comply with the different parameters that we require of them, in terms of riders, in terms of co-payments.

Ultimately, at the end of the day, it is all about making sure that there is consumer protection. But it must be done in a fashion that is meaningful, that actually helps the situation rather than exacerbate it.

Mr Speaker, Sir, I would like to declare my interest as a practising orthopaedic surgeon in the private sector. I would like to thank the Minister of State Rahayu for clarifying.

On the issue of Extended Panels, from what I understand, there are differences in practice between insurance companies. For example, the Extended Panel benefit could be by way of contract, which then means that if the pre-authorisation is withdrawn, the benefits will still reach the patient or the consumer. However, if the Extended Panel benefits are by pre-authorisation, then unilateral decisions by insurance companies to stop pre-authorisation would mean that these benefits do not reach the consumer or the patient.

So, I hope that the Ministry, in the process of untying the knot and in discussion with the companies, will look at these varying practices between the insurance companies and really look at it from a point of access to care from the consumers' perspective.

I thank the Member for the question. Indeed, the commitment is about consumer protection and ensuring a sustainable system that can be meaningfully tapped on when policyholders or patients want to have options. So, I just want to make a distinction between the measures or regulatory efforts that goes towards the protection versus administrative matters that help insurers deal with this issue. I have explained earlier that pre-authorisation and also empanelment of doctors, is a way for insurers to manage their costs, manage the claims.

With panels, how it works is that, usually there is an additional rider that the patient or policyholder can tap on, on top of the coverage. And because of that there is a need for the insurers to make sure that they are limiting their exposure of costs. And they put in then, a panel, and that panel has, at the backend, some arrangements of fees with the insurers. So, that is how the system works and in a way, it is a mechanism for the insurers to manage their costs.

So, on MOH and MAS' part, we work closely to exercise regulatory oversight so that IP insurers protect the interests of policyholders and that their products are sustainable. And as I mentioned earlier, there are certain parameters which we look at. But IPs and riders are private products and insurers have to compete in a competitive market.

Our general practice is to avoid intervening on aspects that are integral to market competition, such as premium, such as service quality. So, while we have an eye out to consumer protection, we do make sure that we allow for the insurers to also use certain mechanisms to get themselves out of the situation.

To also allay the Member's concerns, there is a requirement for notification if they change their terms and conditions. So, that is another layer. They are made to inform their policyholders on it. There are also opportunities if there are, indeed, disagreements, the policyholders can reach out to FIDReC to have their disputes resolved.

I thank the Minister of State for all the explanations. I understand that it is really a difficult knot to crack. I have a few supplementary questions, but I will make them short.

First of all, on fairness and patient interest, I think patients really care that many of them have been paying for a very long time. It is an annual product, but they have been paying for years and years and years. And now they see premiums rising and they are facing more exclusions and tighter panels. So, how is MOH ensuring that patient protection actually is at the heart of the regulatory framework rather than insurance profits?

Second, the Minister of State mentioned about education of the consumer. I think part of education involves transparency. If insurance premiums include administrative costs, including the costs around the panels that we were talking about, and their profits are not quite visible to patients, will MOH require clearer disclosures so that patients can make more informed choices about the value of their coverage?

Third, since MOH currently relies on persuasion rather than statutory authority over the private component of the IPs, how can patients be assured that insurers cannot prioritise profits over their interest? And related to that, MediShield Life is tightly regulated by law, so a lot of basic IP protections are there. But is MOH considering stronger statutory powers over the private portion of IPs to better protect patients? The Minister of State mentioned that patients can also go to FIDReC if they have any disputes. But FIDReC, the name itself suggests that the primary lens there is financial. And so, would MOH be open to a separate panel that also looks at it more from a health and a patient protection standpoint?

To respond to the question by the Member, I just want to reiterate again the points that I made. Because the sentiment is really about wanting to make sure that our policyholders and patients, who are going through very difficult situations, are not shortchanged or disadvantaged because of unsavoury practices by the insurance providers. I just want to give that blanket assurance that that is indeed something that we need to look at and that there are already efforts in place for us to address that.

What I do want to reiterate is that the manifestation of some of the issues that we are seeing today, in terms of escalating costs and premiums, is not necessarily completely resolved by just regulation alone. There are many different dimensions of it and I mentioned earlier that we are taking a multi-pronged approach to deal with this matter. Just allow me to recap and elaborate a little bit more.

As explained, we take a multi-pronged approach. One of the approaches is about having that discussion with insurance providers to make sure that they review their insurance policy design product. Separately, we are also putting in benchmarks, fee benchmarks, to protect against overcharging and guide the pricing, because it is also about how much is charged versus how much they are going to claim. We also put in place measures to enforce against a small minority of doctors who actually make errant claims, because they are the ones who then put in the wrong claims, and end up ballooning the claims. So, there is a claims management office that sets up the claims rules and puts through a claims education process. We are also continuing to drive efforts to improve awareness of these claims practices.

We are also contemplating setting up more private hospital options, especially affordable ones, very much like Mount Alvernia, and we are exploring the possibility of new not-for-profit private hospital.

These are some of the efforts that we are going to do, but even if we do this decision, it will take a few years.

So, what I am trying to demonstrate is that there are many different dimensions that we are looking at in terms of trying to undo this knot, in terms of trying to reduce the claims. Because it is an ecosystem. It is not just about the rising costs. We have to appreciate that the rising claims or the rising premiums cost is as a result of increased claims, it is as a result of consumption and excessive one at that, and it is as a result of over-coverage. So, these are the things that we need to unpack.

Therefore, some of the proposals or suggestions that the Member put up is, indeed, something that we consider. We already have levers; MAS, MOH have levers, in terms of oversight to ensure that the practices and the product design is something that is sustainable and ensures protection. There are avenues for the policyholders and claimants to make claims. FIDReC is one part of it, but there are dimensions of the holistic assessment of whether claims are necessary. It is something that they will have to take into account as well.

We will continue with the education so that people have more choices. We will consider proposals of putting in more information so that people can make a judgement call and better decisions.

But we need to do so meaningfully. These are things that we will continue to do to improve on this issue of rising healthcare costs as well as rising premiums.

I have three supplementary questions. Firstly, given that healthcare expenditure has been rising quickly, at what point would the Government consider disallowing insurers for providing as-charged coverage for non-cancer treatments? Secondly, given that since 2018 there still has been rapidly escalating healthcare costs, does that suggest that the private industry is not compliant with the guidelines? And thirdly, the Minister of State mentioned that MOH is also studying the creation of other benchmarks. I am wondering if the Minister of State can clarify if the benchmarks will be for costs, like the cost of consumables, like hospital gowns, meals consumed by patients, to limit the size of insurance claims?

I thank the Member for the questions. I worry that as we are discussing these issues, we run the risk of conflating many different issues together. There are many different dimensions and contributions towards increasing healthcare costs, including also an ageing demography and an increased burden of chronic diseases.

And at a larger level, there are a lot of things that MOH has to do to address the cost. This is also in the space of putting in Healthier SG, doing upstream efforts, making sure screening is in place, making sure our people are healthy. There is a whole slew of efforts that we are putting in place to arrest the increased healthcare cost.

This particular situation that we are debating here today relates to a different dimension. It is about how people are consuming products. It is about how the insurance system works. It is about the design of the insurance product. And it is making sure that the different stakeholders in this ecosystem are aware that they all need to do their part.

MOH will continue to facilitate this process and it is important for us to appreciate that it is not just about putting in regulations. It is not just about putting in the rules, because we do need to assess. Some of the suggestions that Members have raised here today are things we need to assess, because it may cause a reverse effect.

There are measures and ways in which insurance companies will need to address some of their costs to remain sustainable. We need to make sure that those efforts then do not undermine the protection, fairness and transparency to the policyholders. So, that is something that we will continue to manage. We will take in the suggestions and we will continue to review it. But the issue is about making sure that everyone in the ecosystem plays a part.

The Member had asked specifically about the benchmarks that I mentioned earlier. I do not have details at this juncture. We already have benchmarks on the professional fees. We are looking at how we can also create some benchmarks on the hospitals' costs, which would probably include some of the elements the Member mentioned.