Health insurance essential, but too much can rack up prices: MOH

With rising claims, insurers are barely profiting from health insurance.

The Singapore government is reviewing its health insurance schemes to address rising healthcare costs and the 'buffet syndrome,' where extensive insurance coverage leads to unnecessary medical treatments. 

“I checked the latest financial reports of insurance companies released just a couple of months ago. With escalating claims, insurance companies are hardly making profits on their health insurance portfolio,” said Ong Ye Kung, Minister For Health, at the Securities Investors Association (Singapore)’s 25th Anniversary Members’ Night, last 12 July.

MediShield Life, the universal health insurance, covers the majority of subsidised public hospital bills, providing essential protection for all Singaporeans. 

However, Integrated Shield Plans (IPs) and riders offered by private insurers, which promise more comprehensive coverage, have led to increased healthcare costs and higher premiums.

Ong also emphasised the need to strike a balance between adequate coverage and cost control. 

The review aims to raise MediShield Life claim limits to keep up with rising hospital and outpatient bills while controlling premium hikes. 

“I think we may be in a health insurance vicious cycle, of overly generous insurance policy design, buffet syndrome leading to more non-critical or even unnecessary tests and treatments being prescribed, which in turn leads to bigger bills and higher premiums for all. We are chasing after our own tail, and everyone is just getting worse off eventually,” Ong said.

The government is also urging private insurers to offer more sustainable policies and educate consumers on making informed choices about their insurance needs.

“We will also need a stronger effort to educate consumers on healthcare security, how MediShield Life as basic protection may already serve the needs of many, and if you need something more, you can buy an IP. Do you really need a rider?,”: Ong asked.

“We need to educate consumers on what kind of commercial products are out there, so they can choose the right one in the right phase of life. Absolute peace of mind is important, but we need to educate consumers to know that absolute peace of mind is costing you a lot, that you may not be aware of,” Ong added.