Despite having increased the prices over 225% in the past two years and a drop in claims ratio, the companies are facing more losses due to the decline in subscription services.
According to government state media Straits Times, the premiums of Integrated Shield Plans offered by the six major insurance companies in Singapore will rise due to underwriting losses in 2017. The six insurers, namely AIA, Aviva, AXA, Great Eastern, NTUC and Prudential, reported a S$146 million loss in 2017, after a S$99 million loss in 2016.
The decline in subscribers is largely caused by the MediShield Life insurance introduced in 2015, and the government demanding that all shield plans must have a 5% co-payment, using CPF MediSave, in March 2018.
The end result of the 5% co-payment caused a decline in subscribers for the integrated shield plans and resulted in a smaller pool fund. Prior to the 5% requirement, there was about 1.3 million customers on the full integrated shield plans.
According to the state media, a premium increase in Integrated Shield Plans will increase the mandatory national Medishield Life insurance:
“The MOH fears that should this continue, it would push up healthcare costs for everyone, including those who are only on the basic MediShield Life. This is because all IPs incorporate the basic scheme. Higher IP bills also mean higher payouts from MediShield Life. This could push up premiums for MediShield Life.”
Both Health Minister Gan Kim Yong and Senior Minister for Health Chee Hong Tat said in March that Singaporeans will “over-consume” medical services when full-payment insurance are offered:
“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.”
The current Health Minister Gan Kim Yong has not yet found his “4G” successor, as Prime Minister Lee Hsien Loong is struggling to give up power.