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The PAP Senior Minister of State and colorectal surgeon Koh Poh Koon tried to justify the increase in MediShield Life premiums in 2021 by saying that delaying such an increase will only result in “steeper hikes down the road to catch up with rising claims.” MediShield Life premiums are expected to increase by up to a third despite the current economic impact due to Covid19, yet Koh Poh Koon tries to reassure that premiums will be kept sustainable. The government is also trying to sweeten the deal by dangling a $360 million Covid19 subsidy for the first two years.
It is interesting to note that between 2016 and 2019, about $7.6 billion in premiums were collected from MediShield Life premiums but only $3.5 billion was paid out as claims. This means that there is an excess of $4.3 billion in the reserves.
Despite such an huge surplus, Koh Poh Koon claims that the increased premiums are determined based on both current claims and future commitments. He says that between 2016 and 2019, Singapore has seen an increase in of claimants by 30% while the average payout has risen by about 7%. Therefore the MediShield Life Council foresees premiums collected were “slightly less” than total monies required for current and future claims.
However netizens appear unconvinced by the impending fee hike. Some argued that the government should look into the root of the problem: why medical costs are rising so rapidly and if there is an over-consumption of medical services by certain segments of the population. There are others who pointed out that the increased premiums come around 5 years since MediShield Life was launched, and wonder if the actuaries who estimate the premiums are working on accurate numbers. Other netizens also appear confused how private Integrated Shield plans seem useful even though they are supposed to cushion healthcare costs.
Based on how things are going, certain netizens are skeptical if this round of premium adjustments will be the last.
