www.businesstimes.com.sg/brunch/the-goo ... ield-plansIN the beginning, all was good. The intention of having Medisave-approved private medical insurance schemes was noble, Singaporeans benefited from the improved coverage, and the business was profitable for insurers. But somewhere along the way, the sheen of the Integrated Shield Plan (IP) schemes faded and things went sideways.
In theory, they seemed a clever - and inexpensive - solution to that jaw-dropping hospital bill. Government-sanctioned medical insurance provided by private insurers, with premiums paid at least partly out of Singaporeans' Central Provident Fund savings.
As healthcare bills go up, Singaporeans now need private medical insurance more than ever, but IP premiums are on the rise and show no sign of abating - the latest round of increases being in late 2016 and early 2017.
Insurers are struggling to contain ballooning medical claims that have made their businesses increasingly unsustainable, causing some to swing into the red for years.
According to the Life Insurance Association Singapore (LIA Singapore), the industry claims ratio jumped from 57 per cent in 2011 to 82 per cent in 2015. The ratio measures claims payable as a percentage of premium income. In the same period, underwriting profit margin shrank from 14 per cent to a 5 per cent loss.
Private insurance, which tends to violate the cost control measures of Singapore public system such as increased co-payments, use of branded medicine from private practitioners and etc are facing the impact of rising healthcare inflation and may soon not be able to compete with the public option based on price.
It would be interesting to see how libertarians in the US spin this...