Sunday, March 23, 2014

MediShield Life: Challenging implementation ahead (29th Dec 2013)

Our Singapore Happenings
29th December 2013

                              MediShield Life: Challenging implementation ahead

                During the National Day Rally earlier this year, PM Lee announced the MediShield Life scheme with 3 key proposed reforms to the current scheme. They are:

(i)                 Better coverage through MediShield payouts. Pay less for large bills
(ii)                Coverage for Life
(iii)               Coverage for Everyone, even those with pre-existing medical condition

                It was naturally a well-received move by the public. There were obvious gaps in the current scheme and these reforms would address the gaps. It was also a morally right decision taken by the government to include everyone under MediShield regardless of pre-existing medical condition. This ensures that all Singaporeans, regardless of age or your medical circumstances, is well taken care of.

                In principle, MediShield is similar to Obamacare in the US where every individual, regardless of age or pre-existing medical condition, is mandated to purchase health insurance with a pre-determined benefit package. Those who cannot afford are then given financial subsidies.

                I believe the first question every Singaporean have on their minds is: “So who is going to pay for all these extra coverage?” There can only be 2 sources of funding for this extra coverage. The government could take up the cost of funding the extra coverage but this may mean higher taxes in the future. Or it can directly translate into higher premiums for all Singaporeans across the board.

                One obvious coverage difference is that MediShield Life will cover Singaporeans above the age of 90. Covering those above 90 will mean heftier medical bills that will significantly increase the premiums for all Singaporeans. The question will then be how high a premium Singaporeans are willing to pay for all these extra coverage. Singaporeans must be able to see this as an investment where they are paying forward so that they can benefit from these benefits in the future when they are old. If those with pre-existing medical conditions are considered in the same pool as other Singaporeans, premiums will sky rocket even higher.

                Thus, it might be wise to separate Singaporeans who have pre-existing medical conditions to be in a separate pool altogether. Premiums for the people in this pool will definitely be higher. However, premium should also vary for the people within the group; premiums could be pegged to the potential medical cost with reference to their pre-existing medical condition since different medical condition could have vastly different potential medical cost. Thus having a personalised premium payment system may be the way to go. Financial assistance can be provided by the government for those who cannot afford the high premium.

                 There is no correct way to do this; there are many options available so it is about weighing which one is most feasible and acceptable by all. The Ministry of Health (MOH) is currently consulting Singaporeans on this. It would be interesting to see what is announced in the near future and how Singaporeans react to it. In principle, it is a great step forward but implementation will be controversial and challenging. 

                                                               --THE END--

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