Suggestions for MediShield

23 Feb 2005, Business Times

Question

Name of the Person: Leong Sze Hian Singapore 

Suggestions for MediShield

I REFER to the articles 'Taiwan to save health insurance plan' (BT, Feb 15) and 'Better safe than sorry' (BT, Feb 9). 

The Ministry of Health (MOH) has through the media given several reasons against allowing the uninsured to opt back into MediShield 'without the need for individual risk rating': 

'The young and healthy may then be encouraged to opt out of MediShield in the hope that they can rejoin the scheme later, only when they need insurance.' 

Suggestion: I would like to suggest that the opt-in/opt-back exercise be a one-time offer. After all, MediShield is undergoing a major revamp on July 1. 

'Those who have already developed medical conditions can be expected to opt back into MediShield - potentially claim up to the lifetime limit of $200,000.' 

Suggestion: Lower the lifetime limit for the pre-existing conditions. With the surplus of over $500 million from MediShield, the surplus from MediShield Plus which should be transferred to MediShield when a private insurer takes over the MediShield Plus portfolio, and the increased pool of insureds by another 780,000, an actuarially acceptable funding limit may be feasible. 

'All policyholders will have to bear significant increases in premiums. The necessary premium adjustments will grossly exceed the current maximum monthly increase of $11.25. Many elderly Singaporeans may find such premium rates unaffordable.' 

Suggestion: Since some elderly Singaporeans may find the $11.25 increase from July 1 unaffordable, if and when a premium increase is deemed necessary in the future, try to spread the increase among younger Singaporeans, by capping the elderly's increase to $11.25. 

'Is unfair to everyone else.' 

Suggestion: I think the key issue before us is that 440,000 Singaporeans do not have any kind of insurance. Some may have opted out because they could not afford the premiums, are not as healthy, and are now in a predicament. 

Why not ask Singaporeans in a poll whether they are for or against offering a one-time exercise to these 440,000? 

I believe many Singaporeans may choose not to be 'for oneself only', but will be magnanimous as in the recent outpouring of help for tsunami victims. 

'Some may have opted out through ignorance.' 

Suggestion: The fact that 440,000 have no insurance may be an indication of the shortcomings of MediShield's public education, publicity and promotional efforts in the past. 

In this connection, this is underscored by the opt-out statistics for ElderShield, for which I understand about half of eligible Singaporeans have opted out. 

'Subject to underwriting (medical examination) and exclusion of existing medical conditions.' Suggestion: Does this mean that no one will be rejected for MediShield, but only with exclusion of existing medical conditions? 

If private insurers can accept corporate groups of employees without underwriting or excluding existing medical conditions profitably, despite their smaller risk pool of insureds, why can't MediShield? 

According to the Economist Pocket Asia, Singapore's spending on health is only over 3 per cent of gross domestic product (GDP), which I understand is among the lowest in the world in GDP terms.Citing Taiwan's National Health Insurance's financial woes as an example may not be very appropriate because Taiwan covers out-patient treatment as well, whereas Singapore's does not. It is in a way akin to comparing an apple with an orange. 

The World Health Organisation's (WHO) World Health Report 2000 gave Singapore a relatively low ranking (101st out of 191 countries) for 'fairness of financing' in healthcare. 

According to the WHO's 2004 report, Singapore's per capita government expenditure on health at average exchange rate, has been falling gradually from US$365 in 1997 to US$274 in 2001, and general government expenditure on health as a percentage of total expenditure on health also fell gradually from 39 per cent in 1997 to 33.5 per cent in 2001.

Reply

Reply from MOH 

Mistaken views on Medishield - MOH clarifies 

In "Suggestions for MediShield" (BT, Feb 23), Mr Leong Sze Hian continued to argue for those who had opted out of MediShield to rejoin the scheme without underwriting. He felt that the majority who had stayed loyal to MediShield would not mind subsidising these re-entrants. 

He appears to be under the impression that those who opted out did so because of financial difficulty and are now "in a predicament" as they have no other financial recourse to turn to. This is not so. 

Singapore's healthcare financing system, unlike that of countries/areas such as the US and Taiwan which are primarily insurance-based, consists of multiple channels of financial support. Aside from MediShield, Singaporeans have access to heavy Government subsidies in public hospitals, Medisave and Medifund. This comprehensive framework ensures that all Singaporeans have their basic medical care taken care of. 

On the various occasions where he has commented on MediShield, Mr Leong has repeatedly misinterpreted key information about the scheme and relied on inaccurate data. 

First, the $500 million in the MediShield Fund are not accumulated profits which can be used freely to cross-subsidise payouts for non-policyholders. These are reserves set aside to cover the expanded base of 2.7 million policyholders, for whom MediShield must provide long-term medical coverage. 

Second, MediShield and its private sector equivalents have achieved almost universal coverage. We will nevertheless intensify our publicity efforts to reach out to the minority who do not have insurance. 

Mr Leong mentioned ElderShield although this has nothing to do with MediShield. Even then, his data on the ElderShield opt-out rate are incorrect. The ElderShield opt-out rate for the recent cohorts has declined to less than 20%. 

Third, he is wrong to compare MediShield with employer-paid group medical insurance. The latter are short term group policies; they do not guarantee renewal of coverage and are not portable. In contrast, MediShield guarantees continuing insurance protection for all its members, even when they change jobs or retire. Hence the need to set aside reserves for any long term obligations. 

Fourth, Mr Leong is mistaken in implying that Singapore has under spent on healthcare. In fact, we have attained good health outcomes, comparable and often superior to other developed countries, at a much lower cost. This is not just a reflection of our younger society. It is also a result of our more efficient healthcare system. 

Countries with extensive welfare systems that promise cheap or free healthcare do not always deliver the intended results, as they encourage abuses and wastage. This eventually leads to rising healthcare costs for all. 

Our system of healthcare financing, comprising heavy Government subsidies, Medisave, MediShield and Medifund has enabled us to deliver a high standard of public hospital services, affordable to the vast majority of Singaporeans. 

The World Health Organisation has ranked Singapore sixth out of 119 countries and the top in Asia for overall health system performance.