Peace of mind in insurance has a price
The recent report that a patient could claim only $4.50 for a medical bill of $4,477 from MediShield Life (MSL) has put the national health insurance plan’s coverage in the spotlight. The patient’s total bill for a procedure at the Singapore National Eye Centre (SNEC) was over $12,000, but came down to $4,477 after government subsidies. This amount exceeded the MSL limit for the procedure, and a claim of only $4.50 was permitted in the end. Two questions arise: Are MSL claim limits too low even for treatment at subsidised, government-run facilities? Or were charges at the SNEC simply out of whack? The SNEC has said it will review its charges. And in a sign that undercoverage is not confined to a few isolated pa- tients, the Ministry of Health revealed that eight in 10 subsidised bills were within the MediShield Life claim limits, and nine in 10 were within $230 of the claim limits. For some context: When MediShield Life was launched in 2015, one in 10 subsidised bills exceeded MSL claim limits, but it is now two in 10. In other words, claims exceeding coverage limits have doubled in three years.
Just as MSL has claim limits to cap the insurance system’s exposure to big bills, it may be time to cap the amount that patients must pay, health commentators here have suggested. One argued that limiting Singaporeans’ exposure to big medical bills that may financially ruin them and their family is necessary for genuine peace of mind.
That call resonated with many on social media – not surprisingly, since peace of mind is desired by all. But it comes at a price. Every treatment has to be paid for by somebody. Singapore has a mixed financing model based on government subsides, self-funded Medisave, risk-pooled MediShield Life with deductibles and co-payment, employer-supported healthcare for some workers, and Medifund for the indigent.
Any part of the system that reduces the burden on one party – such as on individuals – needs to be picked up elsewhere. In medical insurance, someone somewhere picks up the tab. In Canada and Australia, where medical care is “free” for patients because the state funds it, taxes are high. So in Singapore, those who want MSL to have higher payouts, and cover not just 90 per cent of claims but 99.9 per cent, logically must also support higher premiums. Yet premiums must remain affordable for all.
How can a balance be struck in a way that gives genuine peace of mind to all? As a government-administered but patient-funded health insurance plan, MSL requires buy-in and trust from patients. The latest figures on MSL came only after a series of Straits Times reports on the issue. The authorities must do better in releasing information on MSL in a timely manner. That way, when premiums must go up, Singaporeans would be better placed to know why.