Sustainability of Private Insurance Plans Based on Non-rejection of New Applications with Pre-existing Conditions

Ms Hazel Poa asked the Minister for Health (a) whether the Ministry has studied how private insurance plans, such as Integrated Shield Plans, can remain sustainable without having to reject new applications based on pre-existing conditions; and (b) whether there are any plans to explicitly forbid private insurance companies from rejecting new applications for insurance plans based on pre-existing conditions and, if not, why not.

Mr Ong Ye Kung: For insurance plans to remain sustainable without rejecting individuals with pre-existing conditions, a large risk pool comprising both healthy and unhealthy individuals is necessary. This is why MediShield Life (MSHL), our national health insurance scheme, was designed to cover all Singapore Residents from birth, regardless of pre-existing conditions.

Integrated Shield Plans (IPs) and other private health insurance plans offer optional coverage on top of MSHL. As these are private products, underwriting decisions are subject to insurers' commercial and actuarial considerations.

If insurers cannot reject applicants with pre-existing conditions, they may have to increase premiums for all policyholders to ensure that their insurance risk pool remains sustainable.

Depending on their underwriting practices, insurers may still offer coverage to applicants with pre-existing conditions, but with exclusions or risk loading, that is, higher premiums. This allows such applicants to benefit from some coverage without adversely affecting other policyholders.