berthahenson

Taking the cover off insurance

In News Reports on June 22, 2014 at 7:00 am

When you buy private insurance, you usually look at two things: extent of coverage and whether you can afford the premiums. So it is right for Health Minister Gan Kim Yong to say that people should consider the premiums they would have to pay on private shield plans, besides class of ward, before deciding whether to ditch them for Medishield Life.

His point is that premiums will change over time, especially with the advances in medical technology. So what you are paying in premiums now might be sky-high in the next decade or so.

But what is odd is that despite what Mr Gan said, we STILL don’t know what Medishield Life premiums will be, except that they will be “affordable’’ with the cash portion on hospitalisation substantially reduced; the so-called co-insurance portion.

We’ve been told instead to wait for the private insurers to come up with their new premiums, since they now have Medishield Life premiums to factor in. So we wait.

I don’t know about you about it does seem like the G is trying to wean the people off private health insurance which, by the way, was meant to complement the current Medishield’s inability to cover the big medical bills. So this part of the equation seems to have been fixed by the G, although two in three now also have private insurance. I wouldn’t blame the private insurers for feeling a little hard done by.

But who cares about them you say? Blood suckers!

I’ve said it before and I’ll say it again: I wish we knew exactly how much in premiums the different age groups will have to pay in Medishield Life.

There are some throwaway lines in ST’s report of its interview with Mr Gan:  

–          That those with pre-existing illness who are not covered will be paying premiums that are 30 per cent higher than others in their age group when they are brought under Medishield Life. So, premiums already calculated – just not publicised.

–          That the current Medisave cap of $800 to $1,400 to pay for insurance premiums might have to be tweaked for some age groups. So, premiums already calculated since we’re talking about changing Medisave caps.

ST has tables which show the benefits of having Medishield Life versus Integrated Shield Plans. The private plans are great if you want to stay in the private class of ward and have a big bill. But you actually have to pay more out of pocket for smaller bills.

 So if you are crazy enough to go for Class A ward for your heart bypass with your Medishield Life, your out-of-pocket will be 70 per cent of the bill. But a patient with a private plan will pay just 29 per cent.

Sounds good to be on a private plan, except that private insurance premiums are five times that of Medishield (not Medishield Life).  So I guess with Medishield Life, private premiums will be more than five times what the still unknown new Medishield Life premiums will be?  

It is really too strange to know the benefits of Medishield Life, but not the cost…

Enough people have said that they don’t need to know everything: Just tell me how much to pay. They feel overwhelmed by too much information. I don’t know about you but I am a bit troubled by how much this new medical insurance scheme is going to cost the country. Universal coverage is of course popular but is it, to use that ugly word, “sustainable’’ especially if it will also be insuring those with pre-existing illnesses which private insurers won’t touch?  As citizens, we shouldn’t leave our brains behind when it comes to something like health insurance and trust to the G to do the right thing. We’ve got to do some thinking too.

Rather than focus on whether people should have or should not have private insurance, why not focus on moving companies towards portable medical benefits/insurance? Some year ago, at yet another health insurance review, the labour movement made a big fuss about it. Then it died down. Now it’s been resurrected by Mr Lim Swee Say and my worry is that the idea will again fade away. I am no health financing expert but the idea seems such a no-brainer. It rides on the Medisave and MediShield  framework to provide medical benefits. Companies make an additional contribution of at least 1 per cent of wages to an employee’s Medisave account, which the employee can use to pay for MediShield premiums or buy an Integrated Shield plan from a private insurer. An employer can also choose to provide staff with Integrated Shield plans.

But only 17 of 1,400 unionised companies in the private sector have taken up such plans and “very few’’ non-unionised firms, according to a TODAY report. The Civil Service is one of the employers who have made the move.  

It looks like it’s inertia that is causing companies to stick to whatever plan they already have. Too much hassle to shift from its current group insurance scheme, for example. It is not as though there are no incentives. Such employers can enjoy a higher tax deduction for medical expenses of up to 2 per cent of their employees’ remuneration.

With Medishield Life and the prospect of higher premiums, isn’t it time to stop this double insurance? Especially since the insurance will lapse when the employee changes company or retires. I know of enough people who suddenly find the health rug pulled from under their feet when they retire, so used are they to their company’s largesse that they neglected to think for the period after working life.

The labour movement should put its money where its mouth is. Only 17 unionised companies? What about the rest? Time to re-negotiate the terms no?  

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