New riders will have a cap on the co-payment amount each year, with most insurers planning new riders with an annual cap of S$3,000.

SINGAPORE: Patients must bear a minimum 5 per cent co-payment for new Integrated Shield Plan riders, Senior Minister of State for Health Chee Hong Tat announced on Wednesday (Mar 7).

Policyholders will have a cap on the co-payment amount each year, Mr Chee said during his ministry’s Committee of Supply debate, adding that most insurers are planning to launch their new riders with an annual cap of S$3,000.



This places an upper limit on the risk exposure for policyholders, to protect them against very large bills, he said

The changes in requirements will affect those who will pay for what is known as “full riders”, on top of Integrated Shield Plans. Such riders cover the entire co-payment amount, so the policyholder ends up paying nothing regardless of the bill size.

Currently, about 29 per cent of Singapore residents have these full riders, Mr Chee said.

He said that new riders will be available within a year.



In the meantime, insurers can continue selling their existing rider plans, but must inform new policyholders that they will transit to the new riders with co-payment from Apr 1 2021.

MOH will issue the requirements for all new rider plans with immediate effect, in line with the Health Insurance Task Force’s recommendations, he added.

Once the new riders are ready, policyholders can choose to switch to the new riders earlier if they wish to do so, and any pre-existing conditions that are covered prior to the switch will not be excluded.

“We expect the new riders to have lower premiums than full riders, so the switch will result in premium savings for policyholders,” Mr Chee said, adding that if insurers intend to make changes to existing policies, they should “consider the interest and well-being of all policyholders, as they seek to keep premiums affordable for everyone in the longer term.”

FULL RIDERS HAVE “DETRIMENTAL IMPACT” ON OVERALL HEALTHCARE COSTS

He stressed that MOH is not issuing these requirements to “bail out” the insurers.

The zero co-payment feature of these full riders has resulted in a “buffet syndrome”, leading to over-consumption, over-servicing and over-charging of healthcare services, he said.

“Our objective is to address the concerns with over-consumption, over-servicing and over-charging, as these will lead to patients and policyholders paying rapidly escalating fees and premiums over time,” he said.

Mr Chee gave some of the examples of over-consumption and over-servicing, which he described as “disturbing”.

In one case, a full rider policyholder made claims for 12 nose scopes in a year, without clear medical need, and another policyholder who underwent an expensive surgery for a small breast lump removal that cost S$70,000 in doctor fees alone, when there was an equally effective alternative procedure at S$5,000.

There have also been patients who were admitted for gastritis or piles, and then referred to many other specialities ranging from dermatology, ophthalmology and ear nose and throat, for additional scans and tests racking up to S$25,000 for a hospital stay in less than 24 hours, he said.

“It is clear that full riders have a detrimental impact on overall healthcare costs in Singapore. This is a key reason why rider premiums have increased by up to 225 per cent over the past two years,” he said.

NEGATIVE IMPACT EXTENDS BEYOND FULL RIDER POLICYHOLDERS

In 2016, the average medical bill size for full rider policyholders was about 60 per cent higher than the average bill size for those without riders, even though rider policyholders are younger and generally in better health, he added.

He warned that the negative impact of the zero co-payment feature extends beyond full rider policyholders.

Over the last two years, Integrated Shield Plan premiums had risen by up to 80 per cent, with older policyholders and those on private hospital plans experiencing higher increases.

“If this trend continues, I'm worried Integrated Shield Plan and rider policyholders will find their insurance premiums increasingly unaffordable as they age,” he said.

Over-consumption, over-servicing and over-charging of healthcare services will lead to faster and larger increases in overall healthcare expenditure, he said.

“These increases will ultimately be borne by all Singaporeans through higher medical fees, insurance premiums and taxes, which all of us will have to pay directly or indirectly,” he said.