Debate on MediShield Life Scheme Bill – MP Lee Li Lian

By MP for Punggol East SMC, Lee Li Lian
[Delivered in Parliament on 29 Jan 2015]

This Bill sets out the legislative framework and powers for the implementation and administration of the MediShield Life Scheme. I support this bill but I have several clarifications and concerns which I will elaborate as I move on.

Penalty for late payment of premiums
According to clause 11, interests may be imposed from time to time on outstanding premiums for that insurance period for those who default on payments. And in clause 17, a penalty may also be added on to the premiums and interests. I would like to find out under what circumstances will interests and/ or penalties be imposed?

The total amount of penalties and interests imposed cannot exceed 17%. According to an online article from Channel News Asia, these recovery measures are meant to clamp down on wilful defaulters with the means to pay their premiums, and are adapted from existing income tax legislation. On what basis did Medishield Life decide to adopt such measure from the income tax legislation and how is medical insurance premium comparable to income tax?

Will the insured lose their cover if the payment is still not recovered despite multiple reminders and interest incurred? I would like to assume that they would not since this is a compulsory national insurance but still I would like to seek a confirmation. And if the insurance is indeed lapsed, is there a function to reinstate the policy?

Will this scheme allow premium holidays for insured that genuinely cannot pay for their premiums? These could be individuals who lose their job and stop contributing to their CPF Medisave. Some may argue that although the insured becomes unemployed, Medisave savings will be able to see them through the difficult period. However, let us not forget that there are individuals who are paying for the premiums of their children, spouse and parents from their own Medisave account.

Access to health information
Under clause 27, an authorized person, certified by the Minister, can have access to an individual health information or history. I can understand the need to have access for such information for the purpose of determining loading factor to the premiums as stated in clause 27, sub section 1a.

However, like many Singaporeans, I am concerned about how much information is available and accessible to those given the authority to assess the database. What security measures are put in place to ensure that the abuse of medical information is kept to the minimum?

An individual can choose to opt out of the system if he/ she does not want to give such access to the Ministry. Once an individual is out, will all details be removed from viewing? Or only partial information? Apart from not being able to enjoy premiums subsidies, what other benefits are they not entitled to? Will there be any implications to their claims? At which point of the application process would the insured be able to opt out?

Underwriting process and pre-existing conditions
Like every insurance policy, an applicant needs to go through the underwriting process. I would like to find out how will this be done in the case of Medishield Life. Will this be individual or group underwriting?

One of the key features of Medishield Life is, it covers pre-existing conditions. Pre-existing conditions not currently covered under MediShield will have to pay an extra 30 per cent in premiums for 10 years. Is 30% a standard rate for all pre-existing conditions or it is a range of up to 30% depending on the severity of the pre-existing conditions?

Next, the Insured will pay normal premiums after the 10 years, is this guaranteed? Or subject to claims and/ or premiums payment experiences? More details on what constitutes pre-existing is not available. What about scenario such as, an insured was fully covered under Medishield, a few years down the road, the insured took up a private integrated shield plan and had conditions to be excluded. Will such conditions be treated as pre-existing and will be required to pay more premiums under Medishield Life?

Lastly, for insured who are currently on private integrated shield plans, their premiums are paid directly to the private insurers who will service the policyholder’s needs. Private insurers will service all claims and sort out back-end arrangements with CPF Board to include any payouts from MediShield through CCPS (Central Claims Processing System).

Since Medishield Life is replacing Medishield, am I right to assume that the current procedures remain unchanged? That is, the insured do not need to pay premiums separately?

With that, I look forward to the Minister’s responses.
Thank you Madam.