Press Releases
Privatisation of Medishield Plus
21 June 2005
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21 Jun 2005
From October 2005, the Central Provident Fund (CPFB) will spin off its MediShield Plus plans to a private insurer, through a competitive tender. CPFB has called a tender of the MediShield Plus plans on 21 June 2005. Private insurers interested to bid for these plans have up to 20th July 2005 to submit their proposals.
The reforms to the health insurance framework have already brought about immediate benefits, by giving Singaporeans a wider choice of private insurance products to cater for their hospitalisation needs at Class A/B1 wards and private hospitals, at more competitive premiums. The tender of the MediShield Plus plans is the next step in bringing Singaporeans more benefits from the MediShield reforms, and will help to drive greater competition in the market.
MediShield Plus Tender
Today, CPFB operates three medical insurance plans, namely MediShield, MediShield Plus A, and MediShield Plus B. MediShield provides coverage at the Class B2/C level, while MediShield Plus A and Plus B provide coverage against stays in Class A/B1 wards and private hospitals.
CPFB will transfer the entire MediShield Plus portfolio, comprising 350,000 policyholders, to a private insurer through a competitive tender, but will continue to administer MediShield. The tender of MediShield Plus will help catalyse stronger competition in the private medical insurance industry, drive market premiums and bring out greater efficiencies in the industry.
To achieve this purpose, CPFB has specified a number of requirements in its MediShield Plus tender. First, it has enhanced the benefits by raising the claim limits and lowering co-insurance rate. This will provide better protection for policyholders (see key changes summarised in Annex A). Second, the transferred plans will be restructured as Medisave-approved integrated plans, which will have MediShield as the basic tier of insurance. This means that policyholders of the privatized MediShield Plus plans will be MediShield basic policyholders as well, and will enjoy all benefits of MediShield membership. Third, as part of the tender, CPFB will allow private insurers to specify the maximum coverage age in their bids, with the flexibility to extend beyond 80 if they so wish. Fourth, the appointed insurer will need to guarantee its proposed premiums for at least 3 years. This will provide certainty to the policyholders. Fifth, the appointed insurer must ensure continuation of insurance coverage for all existing policyholders, regardless of their medical conditions. They will not be affected by the change of ownership of the insurance portfolio.
A Tender Evaluation Committee (TEC) has been appointed to evaluate the bids. The TEC will be chaired by Mr Gerard Ee, Chairman of the National Council of Social Services. The other members of the committee are listed in Annex B.
The evaluation of bids will essentially be based on the proposed premiums submitted by the private insurers. The most competitive bid will win the tender, provided he has sufficient industry experience and financial strength.
CPFB aims to award the tender and transfer all MediShield Plus policyholders to the new insurer by October 2005.
Annex A
Revised Parameters for MediShield Plus Plans
Table 1: Medishield Plus A
Table caption
Parameters | Current | Revised |
|---|---|---|
Claim Limits: - Lifetime - Annual - Daily ward and treatment charges - Normal Ward - ICU - Surgical Procedures - Surgical Implants | $300,000 $100,000 $625 per day $1,000 per day $480 ~ $7,200 $3,500 | $440,000 $110,000 $690 per day $1,100 per day $500 ~ $7,800 $4,000 |
Co-insurance | 20% | 15% (> $4,000) 10% (> $5,000) |
Deductible: | $4,000 | Unchanged |
Table 2: Medishield Plus B
Table caption
Parameters | Current | Revised |
|---|---|---|
Claim Limits: - Lifetime - Annual - Daily ward and treatment charges - Normal Ward - ICU - Surgical Procedures - Surgical Implants | $225,000 $75,000 $375 per day $625 per day $360 ~ $6,400 $2,500 | $340,000 $85,000 $385 per day $640 per day $370 ~ $6,600 $2,800 |
Co-insurance | 20% | 15% (> $2,500) 10% (> $5,000) |
Deductible: | $2,500 | Unchanged |
Annex B
Composition of the Tender Evaluation Committee
Chairman:
Mr Gerard Ee, Chairman of the National Council of Social Services and also a Partner at Ernst and Young
Members:
Mr Koh Juan Kiat, Executive Director, Singapore National Employers' Federation
Mr Law Song Keng, Board Member at CPF Board
Mr Teoh See Leong, Director (Collections and Recovery Division), CPF Board
Mr Tey Chee Keong, Deputy Director (Healthcare), CPF Board
Mr Lawrence Wong, Director (Healthcare Finance), MOH