ever Increasing Integrated (MediShield) Plan premiums

Response to media queries on rising Integrated Plans’ premiums in general and a specific query about private doctors offering ‘unnecessary treatments’ to generate more income:
1. For insurers to be financially viable, the premiums collected must be more than the claims paid out. This ‘medical loss ratio’ as it is described in the industry is typically in the 80-85% range, i.e. for every dollar collected in premiums, 80 to 85 cents are paid out in claims. If claims increase due to higher medical fees, then premiums will have to increase commensurately.
2. The challenge with ‘As Charged’ or first dollar coverage plans is that there is no incentive on the part of the patient or the provider (hospital/ doctor) to restraint costs. This is the economic basis for co-payments in the form of deductibles or co-insurance which is an integral system design of the existing MediShield scheme.
3. The assertion of ‘unnecessary treatments’ is a very serious one and insurers knowing of such instances should not be paying out the claims and instead be querying the doctors and hospitals, and even raising this with the Singapore Medical Council and Ministry of Health as appropriate. Doctors should always be acting in the patients’ best interest. ‘Unnecessary treatments’ certainly do not fulfill this aspiration and wayward physicians should be taken to task.
4. If insurers are not doing so, then it begs the question of whether insurers are being responsible stewards and follow-on questions around whether insurers are structurally organized to be able to manage medical claims appropriately and mitigate claims increases for the good of the overall system. In many countries, insurers’ ability to increase premium rates are typically regulated to some degree by the relevant authorities or by market forces. This then ‘forces’ insurers to watch the validity of claims closely and work with healthcare providers to optimize care and costs.



  1. […] Where Our Money For Health Is Going To – Healthcare Perspectives From Singapore and Beyond: Ever Increasing Integrated (MediShield) Plan premiums – It’s A Zoo Out There: A Rock And A Hard […]

  2. Good point on insurers’ responsibility.
    It works in theory but where insured is a captive market and costs are easily passed on, there is no incentive for insurers to be “responsible”. You see that behaviour – and totally inequitable outcomes – in motor insurance here.

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