Huh? MediShield Changes What Was Not Said: Lower Claims per Premium

The Ministry of Health has announced that the annual premium for Singapore’s “national health insurance scheme” will rise from next year onwards.

MOH’s press release states that, “After extensive consultations with industry experts, MOH intends to make the following adjustments to provide better coverage and protection for MediShield policy-holders:

(a) Increase the policy year limit from $50,000 to $70,000;

(b) Increase lifetime limits from $200,000 to $300,000, to better cover patients with exceptionally large bills;

(c) Extend MediShield coverage to include short-stay wards in the Emergency Departments;

(d) Extend MediShield coverage to members up to 90 years of age; and,

(e) Extend MediShield to cover inpatient psychiatric treatment

MOH had said that, “the increase in premiums will be less than $10 per month.”

Lower Claims per Premium

However, what the government had not mentioned is that the additional claim returns per additional premium has decreased. What this means is that for every dollar we spend on our premium, we are receiving a lower claim for each dollar. If you look at the table above, you can see that we are receiving up to 60% lower claim returns per premium for the annual claims and up to 50% lower claim returns per premium for the lifetime claims. 

If you do not include the 81-90 age group, the claim returns per premium will drop by 23%.

I had not included the 81-90 age group, because if you look at the table, even though the claim returns per premium had increased significantly, those aged 80 and above comprise only 0.02% of the population, and would not make a significant dent on the healthcare costs.

Over-Increase in Annual Premium Paid

MOH had said in the press release that, “The number of claims per policy holder has increased by 9% per year while the average payout per policy holder has risen by 12% per year.”

Also, if you look at Singapore’s inflation rate, it has hovered at 5% recently.

If so, the most we should be expected to pay, to cater to the increased claims should not be more than 12%, to offset the increased medical claims.

Why then has the lifetime claim returns per premium paid dropped by up to 50% or 60%, and dropped by 23% on average?

If MOH wants to offset the increase in healthcare claims, the premium that we pay should thus only be increased by about 50% the additional amount. 

Otherwise, why are we made to pay for a higher-than-necessary additional premium, which will then be additional revenue for the government? Where is this additional revenue expected to go to and what will it be used for? Will it be returned to us, to subsidise for our healthcare costs?

Has the government taken this opportunity to make money off its citizens again? In spite of the government’s insistence on how Singapore’s tax rate is low as compared to other developed countries, has the government been able to keep tax rates low because of other sources of revenue and income that it has been able to siphon off from the people anyway? If so, on paper, the tax rate is considered low, but are we paying more to the government than what the tax rate seems?

The CPF monies collected from Singaporeans are already 4 times higher than the tax revenue. Again, what are Singaporeans taken for when the government keeps justifying on the low government expenditure on healthcare because of the low taxes, when in actual fact, they do have other accumulated revenue from other sources, which have been channelled to other uses, other than public goods, such as healthcare?

Why are we made to paid more for healthcare costs when the government can afford to increase public expenditure on healthcare costs, without having to increase the people’s expenditure on healthcare costs? 

Note:

  1. The change in claim returns per premium is obtained by dividing the additional claims by the additional premium, for both the annual and lifetime claims. 
  2. The % change in claim returns per premium is obtained by dividing the difference in claims by the existing claim returns per current premium, for both the annual and lifetime claims.
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4 comments

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