PRIVATE HEALTH INSURERS

PRIVATE HEALTH INSURERS: 14.

Assoc. Prof. Paulin Tay Straughan asked the Minister for Health (a) whether there is a regulatory body that oversees private health insurers in Singapore; (b) whether there is data on the proportion of rejected applications for private health insurance; and (c) what are the reasons for rejecting these applicants.

Mr Khaw Boon Wan: Sir, private health insurers are regulated by both the Monetary Authority of Singapore (MAS) and my Ministry.

MAS regulates and supervises all insurance companies in Singapore, so it includes those that offer health insurance. MAS regulates them with a view to promoting the safety and soundness of the industry. Insurance companies are required to have sound risk management systems and maintain adequate financial resources in order to meet their obligations to policyholders.

My Ministry regulates Medisave-approved Integrated Shield Plans to ensure that they make proper use of Medisave monies for the welfare of policyholders. We require the Integrated Shield Plans to focus on catastrophic coverage where risk-pooling is most effective. They must retain the core co-payment principle through features such as deductibles and co-insurance. This is to discourage over-consumption and help to keep premiums affordable. Before a plan

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can be marketed, it is scrutinised by my Ministry to ensure that it complies with these basic requirements. The insurers compete to provide their policyholders with the most cost-effective insurance protection over their lifetime in the most sustainable manner. We encourage them to innovate with new product features but we discourage comprehensive first dollar coverage which has led to many moral hazard problems elsewhere.

We encourage insurers to be transparent and upfront with their customers by keeping their terms and conditions simple and clear. Where necessary, we may require an insurer to amend its contract if any of the terms and conditions is ambiguous.

We assess the performance of the insurers on an ongoing basis. For example, the time taken for them to process claims is published on my Ministry's website and updated quarterly. In the same website, we provide a comparison of the key features of the Integrated Shield Plans marketed in Singapore. This will help the public to choose the plan that best meets their needs and budget.

However, the Ministry of Health does not regulate the decision of private insurers on whether to accept an applicant into their plan. These decisions will have to be made by the insurers based on their claims experience, risk appetite and actuarial analysis. We therefore do not have data on the proportion of applicants who are not accepted for private health insurance coverage, nor the reasons for the rejection. But we do require the insurers to guarantee renewals so that policyholders are not dropped should they fall sick and incur higher claims later.

Assoc. Prof. Paulin Tay Straughan: I would like to ask the Minister a

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supplementary question. Can the Minister comment on the take-up rates for private insurance? I just want to have a good sense of what the gap is out there and the efforts taken by the Ministry to improve the take-up rates.

Mr Khaw Boon Wan: We do many things to try to increase the take-up rate. We share a common objective that as many Singaporeans as possible ought to be "Shielded", and the coverage rates are not bad. I have in an earlier reply during a past Sitting mentioned that among working adults, more than 90% are insured with at least MediShield. Among all Singaporean residents, about 85% have medical insurance. If you look at the remaining uninsured, 15% or so, two large groups are prominent – first, young kids, those below 20 years old, form a big number, about 300,000. They are not insured for various reasons, ignorance or inertia. Another big group, maybe about a quarter million, or 300,000, comprises housewives whose husbands have forgotten to insure for them. On both fronts, we are working very hard to get them in. For the kids, it is easier because at the stage of registering birth for all newborns, we can remind the parents to sign up their kids. We have more than a year of experience with this system now. 98% of all parents said, yes. Only 2% opted out for whatever reasons. Among the housewives, I am working very hard with Mdm Halimah and NTUC to get them in, and we will get there, I am quite sure of that. It is a matter of time. These are for basic MediShield. And among them, about 60% have private insurance as top-up. If you look at it as a total population, about half of Singaporeans have private insurance. And if you remember that private insurance is really meant for the upper and middle class who prefer and can afford private hospitals, then 50% of medical insurance coverage for private shields is quite a good coverage rate.