Tan Kin Lian's Blog: Providing health insurance for the population

Tuesday, November 10, 2009

Providing health insurance for the population

There is some debate in this blog about how to insure the unhealthy people. Those who are healthy felt that they should not be subsiding the unhealthy people and they like the current system of insurance purchased from insurance companies operating on commercial grounds.

This self-centered approach is not helpful to people who are not in good health, especially those who were born with congenital conditions and did not take care of their health in the past (and now wish to make a change).

Some countries realize that they cannot just let these people be uninsured. America is now addressing this problem and is taking bold steps to make a reform.

I like the approach adopted in Australia. Every family can join a health insurance plan without the need for underwriting and to pay the community rate. The Government provides attractive tax incentives and make it attractive for people to join a plan, rather than be uninsured. The healthy people are willing to join, due to the tax subsidy.

I believe that a similar approach is being adopted in Japan, Germany, Switzerland and other European countries. The systems are not identical, but the general approach is probably as I have described (but I may be wrong).

I do not like the American or Singapore system, as there is a high layer of administrative cost and uncertainty about the coverage, due to the proliferation of different plans and exclusions of pre-existing and other conditions. The confusion is not helpful to consumers and the actual benefit to consumers is lower than the premiums that they have paid. I believe that a better and more streamlined system can be found.

Tan Kin Lian

13 comments:

Anonymous said...: Hello, Rex comments again,

I think we need to think in 3 dimensions instead of one dimension.

There are
Healthy people who are very very rich.
Healthy people who are very very poor.
Sick people who are very very rich.
Sick people who are very very poor.

The point i wanted to make is that if all sick people manage to get insured, and pooled with the healthy, then, the overall result is that the healthy people who are very very poor end up getting lesser benefits and they cannot afford to pay insurance any more. Why should a very poor healthy person bear the burden of a sick person who is very rich?? this is the extreme example but it is embedded in the structure.

Therefore, the idea of "self centered" or "fair" must be examined very carefully taking all stakeholders into account. It is not correct to say that if I disagree with the idea that sick people insurance should pooled with the healthy, I am self centered.

There are also those who feel that since insurers earn super normal profits so they must help out and absorb costs to balance out so that the above scheme can be implemented with no impact to existing premium-benefit ratios. Very good, if that can be done, I am very happy to accept the pooling of everybody together. But my very limited knowledge of the insurance industry makes me feel that this is too good to be true.

REX; November 10, 2009 12:04 PM
Vincent Sear said...: To: Rex

I'm also willing to forego and forget all my insurance and underwriting training and principles, if the government insures all citizens in one pool, same premiums same claim benefits.; November 10, 2009 12:52 PM
Kang Tau said...: old folks home, education and health care must be free for all citizens.; November 10, 2009 2:28 PM
Vincent Sear said...: To: Kang Tau

It's very sad that our government's philosophy is make the people pay, otherwise they won't work. Those who really can't work, let them beg for government aids on bended kness. Then see how.

Government ministers on the other hand, must be paid millions, otherwise they'd become corrupt or nobody wants to be minister.

I have no respect for all ministers up to and including L.K.Y. If not paid millions and want to be corrupt, please go ahead. But since they're in power to pay themselves millions, what to do? We do our best to restrict contributions to the ransoms.; November 10, 2009 6:25 PM
Anonymous said...: In case the reader's don't know socialist medicine like that practice in Europe is also has it's downside. For example, because socialist medicine pretty much allows everyone equal access to healthcare, waiting for treatment (e.g. organ donation) has become extremely long. While I support the move to provide basic healthcare, I do not think that any government should provide a universal standard of healthcare for everyone. Without underwriting, everyone is forced to pay higher rates. Why should you be paying the say premium as somebody with a serious pre-existing condition?; November 10, 2009 6:48 PM
Anonymous said...: Following up to my previous comment, I do not think Obamacare is the way to go for the US health insurance system. Trying to force everyone into a universal public health insurance without underwriting and guaranteed acceptance is a mistake. It's unfair for those who are healthy and must pay high premiums. FYI, the US does have a "high risk pool" health insurance that accepts people with pre-existing conditions without underwriting. In exchange for guaranteed acceptance, they pay a higher premium. To me, I think this is fairer. Cheap insurance for those young and healthy and who sign up early. For those who joined late and have developed pre-existing conditions, they are still insurable but at higher cost. Honestly, I don't the system in US is that broken. Maybe it's because there's so many dumb Americans around who can't take of themselves! Hahaha. I can think of worse alternatives, such as the super socialist health care policies in Europe and the no-welfare policies in Singapore.; November 10, 2009 6:56 PM
Anonymous said...: My bold prediction for the Singapore healthcare system is as follows.

Policy making in Singapore is always based on a "Govt Win People Lose" principle.

Right now, the government is losing big time because many sick people opt to stay in B2 or C class wards to enjoy the government subsidy.

The subsidy is viewed as a thorn in the side of policy makers who would rather see the money "put to better use" (e.g. as captial for Temasek or GIC to make "long-term, strategic" investments).

Hence, it will therefore be a matter of time before some clever civil servant comes up a with a scheme to offload the burden of the subsidy to the Singapore people.

A source of inspiration for our clever civil servant might be the CPF Life scheme where the burden of longevity has been forcibily offloaded to the Singapore people.

A similar scheme to replace the subsidy would therefore be a COMPULSARY managed health care scheme which you are forced to buy using your MediSave funds.

Instead of the government subsidising the sick, the healthy in Singapore would subsidise the sick.

Government Win, People Lose.

Again.; November 10, 2009 9:25 PM
Insurance License Class said...: So far where there is no pulic healthcare, private insurance companies have made the most of it - raised premiums, denied claims (of those who are able to afford it) and deny insurance at all (for those who are born sick or too old). The public healthcare option gives cover to those people. I am sure that if someone is very sick and very rich, they will seek private healthcare. Fortunately for them, in that envoirnment, they might even get it.; November 10, 2009 9:58 PM
Anonymous said...: Medical conditions normally do not happen over night. Symptoms occur first.

So, if there is guaranteed acceptance, I will choose to not buy any until I feel the discomfort so that I can save on the premiums. As a result, if everyone thinks the same way, insurance will not work as the only people buying are the ones about to claim, so where will insurers getting the funds from.

There are some people who are already doing as so. When they start feeling unwell, they quickly take up a high coverage term insurance before they see a doctor. If they are diagnosed of any thing claimable, they win. If they are fine, they cancel the policy and wait to do it again in future.

Guaranteed insurability is the moral thing to do, but immoral people will abuse the system causing it to fail.; November 10, 2009 9:59 PM
Unknown said...: There is no difference when the government subsidises the sick OR when the healthy subsidises the sick. If government does it, they'll tax the population. Subsidies are actually our own money. These monies would be more efficiently used if bureaucracy is removed and individuals are allowed to choose what to do with the subsidy money - buy insurance, save for rainy day etc... Ultimately, we want neither. We want individuals to be responsible and get insurance early.

Unless they are born unhealthy, that should be treated as an isolated case.; November 11, 2009 8:04 AM
Ron said...: What is the percentage of people getting ill, that require huge sums of money to treat?
Underwriters and actuaries have the answers to this, but they choose not to reveal the whole picture because they will not be able to sell products!

Please understand that a small percentage of people will get cancer and all those "critical" illness!
Healthcare is a business. As long as there is a threat, they will blow it up, using expensive diagnostics. The deeper you look more dirt you will find.

Insurance and healthcare are partners, one feeds off the other.
and its not necessary a bad thing.

It becomes bad when profits is the only statement in the mission.

Oh! how I yearn for the simple life and pure purpose of living, and sharing... alas.. it is an era that is lost!... never to return.

Thank you Mr Tan for allowing this rant.; November 11, 2009 10:43 AM
Anonymous said...: Maybe our Government should look into this problem. We have medishield which looks after the basic needs.

If I am not wrong, this insurance kicks in the minute a person contributes to CPF (be it doing part-time job during vacations) unless he/she opts out.

My worry is these youngsters may opt out due to various reasons and find difficulties getting re-instated when their health declined later in life.

It will be a big christmas gift if our Government are willing to do some juggling with their financial figures.

Have all minors (below age 21) and STRICTLY Singapore citizen by birth "bulked" insured under medishied with the State's Budget. The premium should be quite affordable.

Where to get the money? Well, I think we have funds for the edusave where funds are credited to the child's accounts. Then there is also the child rebate scheme; etc, etc.

Put all the schemes together and find the best solution. Count every $ & cts disbursed out.

Part of these monies should be syphoned to the child's health care needs i/o all education /incentive needs. This is opportunity cost.

When the child comes of age, he/she should be able to make his/her own decision as to continue with his/her health insurance. Whatever decision he/she has made, he/she will have to bear the consequences.

That should be fair to him/her, to the parents and to the general public.; November 13, 2009 12:16 AM
Vincent Sear said...: Why would anyone paid millions of dollars ignore your problems look into your problems? Think about it. The answer is so simple. They don't care. Even if he's your son you'd also advise him stay out of trouble, make money and live on.; November 13, 2009 9:06 PM