Health­care in­fla­tion leads to new rules for in­surance

Why your health in­surance is about to change and what you need to know about it

Singapore Business Review - - CO-PUBLISHED CORPORATE PROFILE -

The way health in­surance plans work in Sin­ga­pore saw a big change on April 1. That was the Min­istry of Health (MOH) dead­line for in­sur­ers to come up with new In­te­grated Shield Plan (IP) rid­ers where pol­i­cy­hold­ers co-pay 5% of their to­tal med­i­cal bill. This is a de­par­ture from the tra­di­tional “full rider” plan where pa­tients pay noth­ing re­gard­less of the bill size, and is in­tended to re­strain health­care in­fla­tion.

MOH co-pay­ment changes

Health­care in­fla­tion is a sig­nif­i­cant chal­lenge for Sin­ga­pore, and af­fects all Sin­ga­pore­ans. As re­ported in the Sin­ga­pore Busi­ness

Re­view, health­care in­fla­tion is ex­pected to hit 10% this year, com­pared to 1% for other goods and ser­vices. Part of this in­fla­tion comes from an in­crease in health­care needs due to the age­ing pop­u­la­tion, as well as the ex­pan­sion of treat­ment op­tions due to tech­no­log­i­cal ad­vances.

How­ever, a sig­nif­i­cant part has also come from an in­crease in health­care util­i­sa­tion among pa­tients who have “full rid­ers”, in which they pay noth­ing re­gard­less of bill size. Such “full rid­ers” lead to a “buf­fet syn­drome” where there is over-con­sump­tion of health­care ser­vices as well as over ser­vic­ing by some doc­tors. This has, in turn, led to up­ward pres­sure on pre­mi­ums and in­creased costs for con­sumers.

The in­sti­tu­tion of manda­tory co-pay­ment by MOH is in­tended to com­bat this buf­fet syn­drome, and re­strain health­care in­fla­tion. This is a nec­es­sary step to help pa­tients be­come more in­volved in their own health­care as well as the costs as­so­ci­ated with treat­ment.

How AIA Sin­ga­pore is im­ple­ment­ing the changes

As an in­surer, AIA Sin­ga­pore has a so­cial re­spon­si­bil­ity to max­imise value for money on health ex­pen­di­ture, given that it is ul­ti­mately the cus­tomer who bears the cost of health­care through pre­mi­ums. We also need to en­sure that our IP port­fo­lio is fi­nan­cially sus­tain­able so that we can keep our brand prom­ise to help our cus­tomers live health­ier, longer, bet­ter lives.

In line with MOH’S di­rec­tion, we have in­tro­duced AIA Max Vi­tal­health – a new rider for AIA Healthshie­ld Gold Max – ef­fec­tive on 1 April 2019. This pol­icy fea­tures a 5% co-pay­ment com­po­nent with a cap of S$3,000 per pol­icy year if you are treated at any AIA Qual­ity Health­care Part­ners (AQHP) spe­cial­ists or pub­lic hos­pi­tal.

The in­tro­duc­tion of AIA Max Vi­tal­health com­ple­ments our other mea­sures to pro­vide cus­tomers with qual­ity af­ford­able health­care. In par­tic­u­lar, AIA was the first in­surer in Sin­ga­pore to es­tab­lish di­rect part­ner­ships with the med­i­cal com­mu­nity with its AQHP pro­gramme. Our ex­pe­ri­ence with the panel has been very pos­i­tive, and we have been pro­gres­sively work­ing on ways to strengthen col­lab­o­ra­tion with our panel doc­tors. We have also re­cently ex­panded our ser­vices for pre-ap­proval of claims, which pro­vides cus­tomers with as­sur­ance that their claim will be paid be­fore they un­dergo a pro­ce­dure or hos­pi­tal­i­sa­tion. While pre-ap­proval is still very nascent in Sin­ga­pore, take-up for this ser­vice is in­creas­ing at an en­cour­ag­ing rate.


Over­charg­ing by out­lier providers is also a sig­nif­i­cant con­trib­u­tor to health­care in­fla­tion. Such out­liers have a di­rect im­pact on health­care costs, and also serve as a sig­nal to other providers to raise fees. To mit­i­gate this, the MOH has es­tab­lished na­tional fee bench­marks for pro­ce­dure fees. The bench­marks serve to guide pri­vate sec­tor health­care providers in charg­ing ap­pro­pri­ately, and en­able pa­tients and pay­ers to make bet­ter in­formed de­ci­sions.

AIA Sin­ga­pore takes a data driven ap­proach to tackle the is­sue of over­charg­ing. To as­sess if a charge is rea­son­able and cus­tom­ary, we will take ref­er­ence from the MOH fee bench­marks where avail­able. We will also com­pare the claim against our his­tor­i­cal claims data to iden­tify out­liers, and con­sult with in-house med­i­cal ex­perts. If we find that there ap­pears to be over­charg­ing, we will ne­go­ti­ate with the provider to bring down charges. This di­rectly ben­e­fits cus­tomers who have to co-pay, as they will end up pay­ing a smaller out-of-pocket amount.

Preven­tion bet­ter than cure

While all IP in­sur­ers have made changes to their IP rid­ers to com­ply with the MOH co-pay re­quire­ments, AIA Sin­ga­pore has gone fur­ther to be the first in­surer to of­fer com­pli­men­tary Colonoscop­y screen­ing for Colorec­tal Cancer, and Mam­mo­grams for Breast Cancer, un­der AIA Max Vi­tal­health A - the new IP rider and the ex­ist­ing AIA Max Es­sen­tial A Saver rider.

In 2013, AIA Sin­ga­pore launched AIA Vi­tal­ity, the first in mar­ket com­pre­hen­sive health and well­ness pro­gramme de­signed to en­cour­age pol­i­cy­hold­ers to live health­ier with in­cen­tives and re­wards for mak­ing healthy choices in their ev­ery­day lives.

Help­ing our cus­tomers stay healthy is a core part of our strat­egy, be­cause this is the right thing to do, and early de­tec­tion will help our cus­tomers to have a bet­ter prog­no­sis and en­able them to seek treat­ment ear­lier.

“AIA Sin­ga­pore has a so­cial re­spon­si­bil­ity to max­imise value for money on health ex­pen­di­ture.”

Health­care in­fla­tion is ex­pected to hit 10% this year.

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