News

I refer to the article “ ” (Sept 9). Minister of State for Health Rahayu Mahzam was quoted as saying that about half of the policyholders who have Integrated Shield plans (IPs) as well as riders that cover the bulk of the portion of bills not covered by IPs still end up opting for subsidised wards and day surgery. She added that these patients may not need IPs or riders “because MediShield Life is generally sufficient for such episodes, and will be further enhanced after the major review this year”. Insurance is not just a financial product, but also a risk management tool to transfer risk from the insured to an insurance company. The objective of an IP is to reduce the “out-of-pocket” costs that one will incur. To use only the percentage of people who are covered by IPs but choose to opt for subsidised wards is one useful measurement but, by itself, does not provide a balanced assessment of the risk mitigation of having IPs. I think the Ministry of Health should also consider using the following information to assess if patients need IPs or riders: - Amount of payouts (actual value) from IPs versus MediShield Life for such cases, where subsidised wards are chosen despite patients having IPs; - Number or percentage of people who choose non-subsidised wards or private hospitals despite not having IPs; - The “out-of-pocket” costs incurred by people on MediShield Life who ended up choosing Ward B1 or above, which MediShield Life is not currently designed to cover. Those who buy an insurance policy are not looking to use it to benefit financially. In fact, it is reasonable to expect that they do not want to use the IP at all. Measuring the “usage” is not the most appropriate way to assess the value of the insurance policy. How much has to be paid “out of pocket” when a major health event occurs is a better measurement of the value of IPs.