Tan Kin Lian's Blog: Make Medishield available without underwriting during window period

Thursday, September 24, 2009

Make Medishield available without underwriting during window period

Printed in Straits Times Online Forum on 22 September 2009

I congratulate the Ministry of Health for their success in getting 84 percent of the population covered under Medishield. Getting the remaining 16 percent to be covered will be a challenge, especially if some of the uninsured find it difficult to meet the underwriting requirements or are rejected due to pre-existing conditions.

Medishield is a national scheme. It should operate on different principles from commercial insurance, where the insurers cherry pick to select the healthy lives. It should be made available to all, preferably without underwriting.

In my earlier letter, I suggested that a window period be given to all existing uninsured to join Medishield without underwriting. Those who join during this window period will have their existing illnesses excluded or partially covered for a period of two years and fully covered afterwards.

I did not suggest that this they be allowed to join the scheme at any future date on these special terms. I agree with the Ministry that people should join when they are young and healthy, and not wait for a serious illness to develop before they join the scheme. The proposed window period will make it attractive for the uninsured to join Medishield now and not wait longer.

I hope to clarify my suggestion and that the Ministry will consider it.

Tan Kin Lian

14 comments:

Anonymous said...: Medishield is a good scheme but it covers only 84% of the population and does not cover congenital conditions or those with pre-existing conditions. This is far from good enough. It is selfish to oppose expansion of Medishield to cover these for fear it might increase one's own Medishield premium. Chances are, one probably knows a friend or relative who had missed out on Medishield but cannot be covered now because of pre-existing conditions. They should have been covered in the first place if Medishield was implemented properly to cover everyone as well as congenital conditions.; September 24, 2009 9:31 PM
Vincent Sear said...: To be fair, I think that 84% coverage is very good. It started as a opt-out scheme, i.e. those not covered now has opted out by choice. The question of whether to use compulsion can become politically contentious and heated.

I've always believed in this since Medishield was introduced in the mid 80s: everyone should have at least a basic Medishield coverage. Private shield Plan B is fine for those with a little more to spare. Plan A is luxury.; September 24, 2009 11:27 PM
Anonymous said...: Vincent, 16% not covered means hundreds of thousands in Singapore are not covered. USA has 46 million uninsured out of 305 million. This means 85% in US are covered! I think it's often easy to forget benchmarking with other countries and overstate how good healthcare in Singapore is.; September 25, 2009 12:09 AM
Vincent Sear said...: I understand, ideally all should be covered. But what to do when some opted out? Forbid opting out and make it compulsory? That'd be feasible only as far as CPF members with sufficient balances to pay the premiums.

What to do with those who simply don't or can't pay up the premiums? Charge them in court, jail them or bankrupt them?

In every society or country, we seek ideal but have to make do with reality.; September 25, 2009 12:31 AM
Anonymous said...: I posted here before.

Singapore citizen - free healthcare up to B1.

Permanent residents - Medishield.

Those who want A wards - go private (regardless of nationality)

Singapore has more than enough resources to provide for free healthcare for 4 million citizens. We just made 1.6 billion within a year.; September 25, 2009 1:22 AM
LinCH said...: I agree that Medishield should not operate like commercial insurance. There should be less underwriting. Its low premium is dependent on the fact that Medishield is a scheme mainly for serious and costly illnesses. It should not be dependent on a base of healthy individuals.

There should be another opportunity for those born before December 2007 who had missed out on the scheme to join Medishield without underwriting. After all, since December 2007, all new-borns are automatically covered unless their parents opt out. Before this, there had not been enough publicity to inform parents that their new-borns can be registered for Medishield . Not surprisingly, many are left out due to oversight or ignorance.

I suggest a cut-off age at 30 years old be considered to extend Medishield without underwriting to those who had missed out since those who are younger are generally free from illnesses. Those who are older should not be left out. They can be included with some underwriting.; September 25, 2009 2:15 AM
Anonymous said...: Vincent, there are many other countries or societies that actually provide universal healthcare coverage, and where health insurance is compulsory. Even the government of US, where it is politically very difficult to cover everyone, is trying to make health insurance compulsory. In Singapore, many things are already compulsory by law - are you still saying it is not realistic to make medishield compulsory? For those who really have no means to pay the premium, Singapore govt must then subsidise the premium, just as it subsidises their healthcare through Medifund. I think it is wrong to simply accept status quo when it is actually possible to achieve significant improvement.; September 25, 2009 9:55 AM
Anonymous said...: Another point is that covering the remaining 16% might in fact make Medishield premiums go down, because come on, only a proportion of them would actually have pre-existing conditions. I think it is politically difficult to mandate health insurance in the US, but I disagree that it would also be hard for the govt to do this in Singapore.; September 25, 2009 10:00 AM
Vincent Sear said...: That's why I say, any suggestion to make it compulsory would become a political matter, no longer a just financial planning matter.

I'm not saying that it's unrealistic to make Medishield compulsory. I'm saying that in reality, many people for some reasons don't want it, and there'd be political resistance.; September 25, 2009 1:56 PM
LinCH said...: I think if Medishield is made available to all without underwriting, it would not add much to the cost since there is now already a process whereby every newborn is included unless the parent opts out.

Actually, some people opt out because they are excluded from certain illnesses. So if you really want the rest of the 16% to join Medisave, you have to exclude them from underwriting.

Surely, if citizens feel society is more compassionate and more assured that medical bills can be managed, they will be more likely to produce more babies.; September 26, 2009 8:59 PM
Vincent Sear said...: Medishield is offered without underwriting to all 1st-timers, i.e. those entering the workforce and just opened their CPF accounts. Some of them opt out; some of them let their policies lapse. Usually, CPF members with sufficient balances in their accounts won't opt out or let their policies lapse.

The problem with allowing opting back in without underwriting is the attendent anti-selection risk. Healthy people are unlikely to think of opting back in whereas people who have subsequently become unhealthy are more likely to think of opting back in.

When healthy members learn about this, the economic rationale is that they'll start to opt out to save premiums too, since they can opt back in without underwriting later if and when they see themselves at risk of hospitalisation. The Medishield portfolio would be saddled with increasing health risks insured and decreasing healthy insured.

One way to overcome this problem is no opting out (i.e. compulsory) for anyone with sufficient balance in their Medisave/Ordinary to pay for the premiums. Since self-employeds also must pay Medisave, this would practically get the entire workforce covered, without anti-selection and cherry-picking risks.; September 27, 2009 2:31 PM
Anonymous said...: I'm not sure if there is some technical fault with this medishield which is offered to those who just open their CPF accounts. By definition "just open" accounts would mean that the person had entered the job market and will be able to pay for the premiums when they fall due. What about those school children who took up part-time vacation jobs. Their pay packet would be subjected to CPF contribution. Once the CPF computerised system detected a new CPF account, the system would expect the account holder to be "in the scheme" and pay the premiums as and when they fall due. And because these school children do not have a steady income, they may just opt out(being young and healthy) or let the policy lapse when the next premium fall due. My question is what will happen when to these group of "children" when they do join the permanent job market. How can they join the scheme again? what happen if they have pre-existing conditions? Or am I totally wrong in my line of thought?; September 30, 2009 4:44 PM
Vincent Sear said...: Well best of course is free for all. No only is it the best way, it's the only way to achieve 100% coverage. No need work, no need CPF, no need premiums. The way to fund this is of course by increasing taxation, not only personal income tax but also GST etc.; September 30, 2009 10:52 PM
Anonymous said...: ******** As CPF and ANNUITY and MEDISAVE are compulsory in SINGAPORE, why nOt MEDISHIELD ?

******** Why is MEDISHIELD SINGLED OUT ??; May 25, 2010 8:43 AM