MOH to look into making IP insurance fully portable

Move though, could result in significantly higher premiums, said Senior Minister of State for Health

The Ministry of Health (MOH) will look into the possibility of making Integrated Shield Plan (IP) insurance fully portable, though this could result in significantly higher premiums, said Senior Minister of State for Health Koh Poh Koon in Parliament yesterday.

He said MOH will study examples from abroad.

"MOH recognises that some policyholders may wish to switch insurers, whether for more competitive premiums or better benefits such as access to more panel doctors, but are unable to do so because of pre-existing conditions," said Dr Koh.

The ministry will look into this taking into account that IPs are commercial products, with features and pricing ultimately determined by private insurers, he said.

"However, insurers may need to increase the premiums significantly for all policyholders to price in the increased risk they assume for a portable IP that covers pre-existing conditions."

This follows the recent battle between the Life Insurance Association and the Singapore Medical Association over the issue of IP insurers having a relatively small number of private specialists on their panels.

IP plans offer private insurance coverage on top of MediShield Life cover.

Currently, those who choose to relinquish their private IP plans can fall back on MediShield Life, which offers all Singaporeans coverage for life with no exclusions, Dr Koh pointed out.

MediShield Life covers all pre-existing conditions for large medical bills in a government hospital B2 or C ward.

Dr Tan Wu Meng (Jurong GRC) had asked about the measures in place to protect policyholders should an IP insurer exit the market.

He also asked about the feasibility and implications of requiring the insurers to accept policyholders who have switched from another insurer, such that existing covered conditions are not permanently excluded from future coverage.

Making IP plans portable would allow people a wider choice of coverage, without being penalised for it.

Right now, IP policyholders are free to switch plans but the problem is that IP insurers do not typically cover pre-existing conditions. Meanwhile, IP policyholders, particularly those who have purchased riders, have faced rising premiums in recent years.

Yesterday, Dr Koh said in reply to Dr Tan that to ensure insurers remain financially sound and are able to meet their obligations to policyholders, the Monetary Authority of Singapore exercises regulatory oversight over the insurers' financial standing, risk management and governance.

Over the past five years, about 5 per cent of IP policyholders relinquished their IP per year on average, as they may have opted for different coverage after considering the cost of the premiums, their financial resources, and healthcare needs, said Dr Koh.

Their average age was 34, he said, in reply to another question from Dr Tan.

This article first appeared in The Straits Times.