The Ministry of Health (MOH) has announced that it will implement changes to the current MediShield insurance scheme to be effective on July 1, 2005. The goal of the reform is to provide better protection to Singaporeans from the burden of large hospital bills. This was the original intent of the MediShield program, but with rising healthcare costs, policyholders have been paying an increasing percentage of their hospital bills. To relieve this increasing burden, and also to recalibrate MediShield to apply only to catastrophic medical bills, MOH will make several important changes to the existing policy.
The announced reforms will reduce the burden of effective co-payment from 60% down to 30%. In order to achieve this, MediShield payouts will be raised substantially. Lifetime, annual, daily and surgical claim limits will all be increased to a large extent. In addition, for amounts above S$5,000 (USD$3,050), the co-insurance rate will be reduced from 20% to 10%.
In order for this to be feasible, MOH will raise the cost of premiums. Due to premium adjustments being actuarially based, the elderly, as they are more likely to claim, will bear higher premium raises than younger policyholders. Premiums will be raised by about S$10 (USD$6.10) per month for the elderly, and by less than S$4 (USD$2.44) per month for those below 50 years of age. In order to make sure that MediShield is only used by policyholders for catastrophic medical bills, MOH will also be raising MediShield deductibles by S$500 (USD$305) for both Class B2 wards and Class C wards. MOH believes that raised deductibles will not present a problem as average Medisave balances are currently about S$10,600 (USD$6,466).
Although MediShield is not a mandatory insurance scheme, it has achieved widespread coverage in Singapore. Nearly 90% of the working population is insured under MediShield or MediShield-equivalent products.
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