Singapore: National Health Insurance Coverage Will Widen

| 22 Oct 2020

Healthcare financing reforms are expected to shape the business environment in Singapore, according to a report from Fitch Solutions Country Risk & Industry Research. This began with a fundamental shift in the philosophy adopted by the authorities, aiming to contribute more to healthcare financing to help improve the affordability of medical services.

The consequence of this strategic shift was the introduction of MediShield Life - a form of universal healthcare - which came into effect in November 2015. Marking an adaptation to the traditional 3M + S (MediSave, MediFund, MediShield and Subsidies), MediShield Life offers notably stronger benefits for patients.

The introduction of MediShield Life in 2015 ranks as one of the most important planks of healthcare provision in Singapore. It covers all Singaporeans, even those with pre-existing conditions that would typically either be excluded or subject to heavy premium loading.

Premiums and benefits under Singapore's MediShield Life insurance scheme will rise if recommendations by the MediShield Life Council are accepted

In October 2020, a set of recommendations has been put forth to improve MediShield Life coverage for Singaporeans, such as raising the policy-year claim limit from SGD100,000 to SGD150,000 and lowering the deductible for day surgeries for older patients.

The MediShield Life Council, which oversees the administration of the basic hospitalisation

insurance scheme under the Central Provident Fund (CPF) Board, is also suggesting expanding the scheme to cover patients seeking treatments arising from attempted suicide, intentional self-injury, drug addiction and alcoholism, who are now excluded.

MediShield Life is available to all citizens and permanent residents, helping them pay for large hospital bills and selected costly outpatient treatments, such as dialysis and chemotherapy for cancer. With the expanded coverage, the council is calling for higher premiums to keep the scheme sustainable.

The Ministry of Health (MOH) has announced that the government will commit SGD2.2bn (USD1.6bn) for premium subsidies and support over the next three years to help

Singapore residents with their MediShield Life premiums, including a one-off Covid-19 subsidy. With these support measures in place, the net premium increases for all citizens will be kept to about 10% in the first year.

Medical needs of the ageing population will intensify

The expansion of Singapore's catastrophic illness insurance scheme, MediShield, is timely given that the population is increasingly ageing. There are currently around 500,000 people aged over 65 in Singapore.

By 2030, this will rise to 900,000 which will put more strain on healthcare services. Amid an ageing population, the Singapore government is increasingly focused on ensuring that healthcare spending is kept affordable for the citizens.

The government’s commitment towards ensuring the quality of lives of the citizens through providing sufficient medical care will, therefore, see its healthcare expenditure continue to grow at a rapid pace over the coming years.

In 2019, healthcare spending reached a value of SGD25.8bn (USD18.9bn), with per capita expenditure on healthcare reaching a value of USD3,261.5.

In 2020, the report estimates that healthcare spending will reach a value of SGD28.3bn (USD20.2bn), growing 9.4% from the previous year in local currency terms. By 2024, health expenditure is expected to have reached a value of SGD40.0bn (USD31.5bn), representing a compound annual growth rate of 9.2% in local terms and 10.7% in US dollars. Over the long term, healthcare spending is expected to reach SGD61.1bn (USD48.9bn) in 2029.


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