MediShield/MediShield Plus/Integrated Shield Plans/MediShield Life

In 1990, a low-cost, risk-pooling medical insurance scheme called MediShicld was implemented to provide financial protection against long-term and catastrophic illnesses that Medisave was inadequate to cover. MediShicld coverage was first ‘automatically offered on an opt-out basis to Singaporeans at the point of first working (Medisave) contribution to CPF’ (MediShicld Life Review Committee 2014: 31). Later, coverage was extended to cover younger Singaporeans (MediShicld Life Review Committee 2014: 31). Those who were over 92 years old or who had pre-existing health conditions were excluded from MediShicld coverage (MediShicld Life Review Committee 2014: 25). In 2013, MediShicld covered 93 percent of the Singapore population (MediShicld Life Review Committee 2014: 31). Premiums were set ‘based on risk pooling within each specific age group, which results in higher premiums for the elderly’ (Hanvoravongchai 2002: 13). For example, the annual premium in 2013 was SS55 for those aged between 1 and 20, SS66 for those aged between 21 and 30, S$105 for those aged between 31 and 40, SS455 for those aged between 61 and 65, and over S$l,100 for those aged between 81 and 90 (MediShicld Life Review Committee 2014: 100). Premiums were deducted annually from the insured members’ or their payers’ Medisave accounts (Central Provident Fund Board 2015). MediShicld covered hospitalization expenses (c.g. surgical operations, implants, intensive care) in the bottom two classes of wards (i.e. Class B2 or Class C ward) in public hospitals as well as selected subsidized outpatient treatments (e.g. renal dialysis, radiotherapy, and chemotherapy for cancer, immunosuppressant drugs for organ transplant) (Lim 2010: 115; MediShicld Life Review Committee 2014: 31).

Avoiding a moral hazard on the supply and demand sides was essential in the implementation of MediShicld. In order to avoid an oversupply of medical services arising from third-party payments, MediShicld operated on a system of negotiated fee schedules to restrict the amount healthcare providers could charge the insurers (Chia and Tsui 2005: 860). In order to avoid an excessive demandon medical services, MediShield reimbursement was determined by a complicated system of deductibles, coinsurance, and claimable limits (Hsiao 1995: 262; Asher and Nandy 2006: 81). MediShield had a deductible ofS$l,000 per policy year for Class B2 wards and S$500 per policy year for Class C wards, and a coinsurance of 20 percent (Ministry of Information and the Arts 1994: 6). From 1994 to 2014, the maximum claim limit per policy year increased from SS20,000 to S$70,000 while a lifetime claim limit increased from S$70,000 to S$300,000 (Ministry of Information and the Arts 1994: 6; MediShield Life Review Committee 2014: 32). MediShield covered, on average, 80 percent of the larger hospital bills for subsidized (B2 or C class) patients (Lim 2010: 116).

In 1994, the government introduced MediShield Plus, which was ‘a more expensive version of MediShield targeted at high-income earners’ (Barr 2005: 155). MediShield Plus offered a two-tier plan to provide higher coverage for those using the top two classes of ward (i.e. Class Bl or Class A ward) in public hospitals or private hospitals. MediShield Plus Plan A, which had a premium five times higher than the basic MediShield scheme, was designed to provide coverage for those using the Class A wards and to a lesser extent the private hospitals (Ministry of Information and the Arts 1994: 2-3). MediShield Plus Plan B, which had a premium three times higher than the basic MediShield scheme, was designed to provide coverage for those using the Class Bl wards (Ministry of Information and the Arts 1994: 2-3). Both Plans had a co-insurance of 20 percent as in the case of the basic MediShield scheme (Ministry of Information and the Arts 1994: 2). But they had higher deductibles, yearly and lifetime claim limits than the basic MediShield scheme. Plan A had a deductible of S$4,000 per policy year, a yearly claim limit of SS70,000, and a lifetime claim limit ofS$200,000, while Plan B had a deductible ofS$2,500 per policy year, a yearly claim limit ofSS50,000, and a lifetime claim limit of S$ 150,000 (Ministry of Information and the Arts 1994: 6). MediShield Plus covered 80 percent of the amount in excess of the deductible (Ministry of Information and the Arts 1994: 2).

In 2005, private insurance plans called Integrated Shield Plans (IPs) were introduced to cover hospitalization expenses in the Class A and Bl wards in public hospitals and in private hospitals (MediShield Life Review Committee 2014: 34). Premiums could be paid by Medisave accounts. IPs followed mandatory design guidelines issued by the MOH in order to be CPF approved (Fu 2012). They consisted of two parts: the basic MediShield plan operated by the CPF Board and an additional private insurance coverage portion operated by an approved private insurer (MediShield Life Review Committee 2014: 35; Monetary Authority of Singapore 2015: 3). A variety of IPs were offered by five private insurers licensed by the Monetary Authority of Singapore (MAS), including AIA, Aviva, Great Eastern, NTUC Income, and Prudential (MediShield Life Review Committee 2014: 35). Some IPs removed limits on the amount that could be claimed each day for procedures and hospital stays, while others offered riders that paid for the deductible portions of the bill (Lim 2010: 114). About 60 percent of all

Singapore citizens and SPR had bought IPs (MediShield Lite Review Committee 2014: 35).

In November 2015, MediShield Life was introduced by the government to replace the original MediShield scheme. It was designed based on the idea of inclusiveness and greater collective responsibility. It was a mandatory basic hospitalization insurance scheme providing universal and lifelong protection for all Singapore citizens and SPRs, including the very old and those with pre-existing health conditions (MediShield Life Review Committee 2014). It paid for large medical bills in subsidized wards (i.e. Class B2 and Class C wards) in public hospitals and selected expensive outpatient treatments, such as dialysis and chemotherapy for cancer (Ministry of Health 2018b). Premiums were actuarially calculated based on the principle of age-based risk pooling in order to avoid intergeneration cross-subsidy and ensure the sustainability of MediShield Life in the future (MediShield Life Review Committee 2014: 72-3). They were higher than MediShield because of providing coverage for all and better benefits, such as no lifetime claim limit, maximum claim limit of S$ 100,000 per policy year, and lower co-insurance rates. Premiums were higher for those with pre-existing conditions for the first ten years to reflect higher risks. But government had carried out several measures to keep premiums affordable. These included the provision of transitional subsidies over four years for all Singapore citizens; additional premium support for the needy and vulnerable who could not pay for premiums even after subsidies; the provision of substantial subsidies for lower-income and middle-income earners; and the provision of special MediShield Life premium subsidies and Medisave top-ups for the elderly (MediShield Life Review Committee 2014). Premiums could be fully paid by the Medisave account. Those who wanted to enhance MediShield Life coverage could purchase private IPs.

Medifund/Medifund Silver/Medifund Junior

In April 1993, a medical endowment fund called Medifund was set up by the government to provide a safety net for lower-income patients who were unable to pay their subsidized medical bills despite Medisave and MediShield. ‘Medifund was given a start-up capital of'S$200 million, which would be increased by SSI00 million every year from budgetary surplus’ (Phua and Yap 1998: 130). The capital sums for MediFund stood at SS3.13 billion at the end of Financial Year 2017 (Ministry of Health 2018c: 1). To keep Medifund sustainable, only the interest income from the capital sum was used (Chia and Tsui 2005: 861). Medifund assistance could be sought through consultation with medical social workers from Medifund-approved institutions at which a patient had treatment (Ho 2017; Ministry of Health 2018d). The eligibility to qualify for Medifund support would be determined by means testing (Lim 2010; Chia and Tsui 2005), and a home visit may be required (Ministry of Health n.d.). Approval authority was decentralized to the Medifund Committees in Medifund-approved institutions, including public hospitals, national specialty centers, polyclinics, intermediate and long-term care facilities (Ministry of Health 2018c: 1). In financial year 2017, there were 48 Medifund Committees administering Medifund for 139 Medifund-approved institutions (Ministry of Health 2018c: 1). The amount of assistance from Medifund depended on the health condition of an eligible patient, the financial circumstances of the patient and his/her family, and the size of medical bills incurred. In financial year 2017, McdiFund provided a total of S$149.8 million to about 1.18 million patients for assistance with medical bills (Ministry of Health 2018e). In November 2007, the government converted a portion of Medifund into Medifund Silver to help the low-income elderly aged 65 and above with their medical bills. In March 2013, the government converted another portion of Medifund into Medifund Junior to help low-income patients under the age of 18 with their medical bills.

ElderShield/ElderShield Supplements

In 2002, a national severe disability insurance called ElderShield was implemented to provide monthly payouts for care of people who were unable to perform certain daily activities such as washing, dressing, or feeding themselves (Central Provident Fund Board 2019c). Singapore citizens and SPRs were automatically enrolled in ElderShield when they turned 40 years old. However, they could choose to opt out if they did not wish to be covered under the ElderShield scheme. People with a pre-existing disability were not eligible to join ElderShield (ElderShield Review Committee 2018: 23). ElderShield was available in two schemes. ElderShield 300 covered those who enrolled in ElderShield between September 2002 and August 2007 and offered a monthly payout of S$300 for a maximum of 60 months (Government of Singapore 2018). ElderShield 400 covered those who enrolled in ElderShield after September 2007 and offered a monthly payout of SS400 for a maximum of 72 months (Government of Singapore 2018). Premiums were affordable, were determined at the age of entry, and did not increase with age (Ministry of Health 2018f). They were payable annually until enrollees reached 65 years old or when enrollees were qualified to receive ElderShield payouts (HealthHub 2019). They could be fully paid by their Medisave or family members’ Medisave accounts (Ministry of Health 2018f). Enrollees were insured for life and could make claims at any age if they became severely disabled (HealthHub 2019).

Aviva Limited, Great Eastern Life Assurance Company Limited, and NTUC Income Insurance Co-operative Limited were private insurers appointed by the MOH to manage ElderShield (Central Provident Fund Board 2019c). Policyholders were assigned to one of the ElderShield insurers randomly, but they could switch insurers before their cover commenced (Central Provident Fund Board 2019c). Starting from 2007, ElderShield enrollees could purchase ElderShield Supplements offered by the three appointed private insurers in order to enjoy higher monthly payouts, a longer payout period, less strict claims’ criteria for disability, or any combination of the above (ElderShield Review Committee 2018: 23). They could pay the premiums of ElderShield Supplements using their

Medisave accounts or cash, up to a limit of S$600 per year per insured person (Government ofSingapore 2018; Ministry of Health 2018g).