Friday, May 04, 2012

My thoughts on Medishield

Over two million Singapoerans are covered under Medishield and similar policies, called private Shields, issued by the insurance companies. 

All the private Shields are required to reinsure the basic component of their coverage with Medishield under the "integrated Medishield:" arrangement. In essence, Medishield is almost a universal insurance scheme covering most Singaporeans.

Medisheld now has two restrictions, namely

a) It excludes pre-existing illness and congenital conditions at the time of coverage
b) It rejects applicants who are not in good health, e.g. suffering from chronic illness

It is appropriate for Medishield to be amended to cover congential conditions and people with pre-existing conditions, and adopt other risk management methods to handle the pre-existing conditions.

The other methods are:

a) require applicants with pre-existing conditions to pay a higher premium, also called a loading
b) exclude coverage of pre-existing conditions for a waiting period of one or two years, and provide full coverage thereafter

These other methods of risk management are appropriate for an insurance scheme that has standard coverage, such as Medishield, and also has a large base of people who are covered.

If Medishield provides this coverage, all the other private Shields will automatically provide the same coverage, due to the reinsurance arrangement under the "integrated scheme".

The purpose of insurance is to provide the benefit of risk pooling to large numbers of people in an economic way. This includes the need to insure people with congential conditions and pre-existing conditions. While the insurance scheme should be run on a viable basis, and appropriate risk management methods should be applied, the purpose should NOT be to maximise profits for the insurance company. It should have its social purpose of providing cover to those who need it at an economic cost.

We all now that as a person gets older, there will be some chronic illness that have to be managed and insured. This can represent a large part of the population. They should not be excluded by the restrictive underwriting standards.

I suggest that the Minister for Health seek the advice of suitable experienced people who do not have any conflict of interest, i.e. running an insurance company now, to provide advice to him on the insurance aspect of this review of Medishield. There are many retired insurance practitioners who are able to play this role.

Tan Kin Lian was the former chief executive of NTUC Income. He is now the director of a consultancy and software development company called Tan Kin Lian & Associates Pte ltd. He is also the Founder and President of the Financial Services Consumer Association (FISCA), an organisation with the aim of educating consumers on financial planning, insurance and investments, and to promote the interest of consumers. ( He writes a blog

2 comments: said...

Cannot agree you more, especially for"the other methods" for pre-existing illness.

We don't have to be so comprehensive cover, like Taiwan National Health Insurance but it is the minimum requirement for us to be covered under "medishiel" by CPF(or government).

PS:I'm a PR from Taiwan

Unknown said...

I feel the same. The govt could take the direction to show the pte sector to take the move to improve the std of care to be made available to Singaporeans.

Recently, I called my my insurance co to review my husband's H&S plan (a standalone H&S) as it excluded coverage for "spinal disorder". It was excluded from cover because we declared that he had seen a doctor for back pain in 2000 and taken x-ray and undergone some physiotheraphy as advised by the doc.

Alto we took up the plan only in 2005 and all his physio sessions were all finished by then and there was no further follow up, he was still excluded.

Just a few days ago, I called up the insurance co to request for a review, but they still insisted that we provided a certification from doctor to prove my husband has recovered. In the years of policy inception, he had never consulted the doctor again for back pain and we have not made any hospitalization claims, he hardly even seen the doctor.

My point is that we made a faithful disclosure believeing that the insurance co would made a reasonable and informed decision regarding his coverage. However, even after paying premiums since 2005, after 7 years, after all this while of "good health", we are still not offered full coverage. So the insurance co. just intends to wipe off the responsibility?

A person is human, sometimes we suffer illness and pain, so we seek treatment. There was no chronic disorder but the insurance co. labelled my husband by excluding him (exclude "spinal disorder"). If there was real spinal disoredr, wouldn't it made sense that the hospital/doctor prescribed long term medication/ physio?

Even cancer remission, a chronic condition, is seen by doctors to be recovered after 5 years. Why is our coverage biased towards us?

As we age, the chances for illnesses/ disabilities increases. From a healthy person, we, "healthy" people also can experience illnesses and diabilities.

Now, we are expected to take leave, go wait at the hospital to see a doctor to certify a condition that has not been seen at least since 2005, that's asking alot from us. My husband is furious and refusing to see doctor. We are all busy people and full time working parents, I can understand his anger.

My husband is healthy in the first place. The label of "disorder" is not given by doctor but by some underwriter (whether fresh out of school or experienced and just working by some biased protocols) sitting at a desk in an air-conditioned office in some insurance co. Is it fair then? Shouldn't medical conditions be certified by doctors in the first place? Or are underwriters now "doctors"?

Since insurance co. already state that pre-existing conditions are excluded, shouldn't they be more flexible in rating. If at the point of claim, they found out there was actually long term medication or consultation, they could exclude the cover then. Right now, it seems the insurance co are acting like doctors certifiying conditions that were not even certified by registered doctors.

My anger comes from the fact that the exclusion labelled my husband. Now he has record for medical history when in fact he has no actual medical condition. I ask, is this fair? After 7 years since policy inception, shouldn't the insurance co take up the responsibilty to be fair?

This experience just teaches me that honest people who made a faithful disclosure are penalized. Probably I should had left out the disclosure and since there was no medical history, my husband wouldn't be excluded in the first place. If others who suffer from the same predicament as we did and all learned the same lesson as we did, people don't believe in disclosures due to insurance co bias. We can guess what would happen.

Thank you your sharing. I really hope the govt can do something to help us.

Blog Archive