Medishield Life allows every one to be insured, including those who are not healthy and are now excluded under the current scheme. Medishield Life also cover pre-existing illnesses.
Question: The devil is always in the details. What are the details that we need to study carefully?
The current Medishield scheme covers only the subsidized wards, i.e. B2 and C. Those who wish to be insured for higher class wards or treatment in private hospitals have to buy an "integrated plan" from an insurance company. As different companies offer different plans, the differences are quite confusing to the public and there is a risk that the coverage under the integrated plan may be rejected due to non-disclosure or other technical issues. This can be quite confusing to the public.
It is better for Medishield Life to offer options to cover the higher plans, or to specify standard conditions that the private plans should observe. The treatment of claims should be standardized among all the insurance companies offering the integrated plans.
Question: Premiums can turn out to be a sticking point. What kind of premiums would you prefer?
I prefer the premium to be set at a level that is based on the actual claim experience for each age band, rather than to make a surplus for the younger people to subsidize the premium for the older people. it is difficult to achieve such a cross-subsidy system, especially when this insurance is made compulsory.
There is the danger that the medical fees and premiums will continue to increase over the years in Singapore, as it seemed to be modeled along the American model.
Right now, many people are worried that the premiums will continue to escalate in the future. They cannot have the peace of mind, until they are assured that the cost will be kept under control.
* Kin Lian retired from NTUC Income on 28 February 2007, after heading the cooperative for 30 years. He was a candidate in the 2011 Presidential Election. He now runs a consultancy company. He blogs at www.tankinlian.com and www.facebook.com/kinlian to give his views on insurance, investment and financial planning for the benefit of consumers.