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Straits Times
11-07-2025
- Health
- Straits Times
What's in store for policyholders after GE removes pre-authorisation letters for two private hospitals
Sign up now: Get ST's newsletters delivered to your inbox GE temporarily stopped issuing pre-authorisation certificates for admissions to Mount Elizabeth Hospital and Mount Elizabeth Novena Hospital from June 17. SINGAPORE - Some policyholders of Great Eastern (GE) found themselves in a pickle after the insurer temporarily stopped issuing pre-authorisation certificates for admissions to Mount Elizabeth hospitals from June 17. Policyholders will now have to re-evaluate whether they want to go to Mount Elizabeth Hospital or Mount Elizabeth Novena Hospital for treatment; switch to another private hospital; or change insurance provider altogether. The incident has also highlighted the need for a separate pool of funds for unexpected medical expenses, even though the verdict on such a fund is mixed. Integrated Shield Plan (IP) holders of GE policies have to make some choices now that pre-authorisation for planned medical procedures has been suspended at the two Mount Elizabeth hospitals. Pre-authorisation is not required for emergency situations, where immediate medical attention is needed. Mr Alex Lee, president of the Singapore Actuarial Society (SAS), said those who still decide to go to the two hospitals for treatment will have to foot the bill out of their own pockets first and claim it back later. Mr Lee added that GE may reimburse the claim if it is deemed as reasonable. This will be no different from the scenario in which the policyholder has received pre-authorisation for the medical procedure. However, the insurer could also reject the claim if the treatment is excluded under the policy conditions, he said. Mr Kyith Ng, senior solutions specialist at insurance advisory firm Havend, said these GE policyholders will have to face the uncertainty over whether their insurance will cover their hospital expenses and how much of the bill it will cover. SAS' Mr Lee said other policyholders, who want peace of mind before their medical treatment starts, could choose to move to another private hospital where GE continues to offer pre-authorisation for admissions. There are eight private hospitals in Singapore, including the two Mount Elizabeth ones: Gleneagles, Parkway East, Farrer Park, Raffles, Thomson Medical Centre and Crawfurd Hospital. There is also one private not-for-profit hospital, Mount Alvernia. The process of pre-authorisation allows an insurer to assess whether a medical procedure recommended by the doctor is necessary and at a reasonable cost, said Associate Professor Chen Renbao from the department of finance at the National University of Singapore (NUS) Business School. Upon approval, policyholders have a gauge of the estimated treatment costs and know how much their insurance policy will cover prior to hospitalisation. There are some GE policyholders who are contemplating whether to switch to another insurance provider. They can do so if they do not have pre-existing illnesses, which will exclude these medical conditions from any new insurance coverage. One policyholder who wishes to remain anonymous told The Straits Times that his entire family uses Mount Elizabeth hospitals. He is thinking of switching to another IP insurer but is concerned about any exclusions that will not be covered. He told ST that GE should not impose such restrictions on existing policyholders and that these restrictions should only apply to new ones. Of the seven private insurers that offer IPs, Income and Singlife do not offer pre-authorisation for medical procedures. The other four, AIA, Prudential, HSBC Life and Raffles Health, do but Havend's Mr Ng said there is no certainty they will continue to do so. 'What GE does may make the other insurers wonder if they can do the same,' he added. If policyholders switch insurers and that insurer later makes changes to its claims policy, they could be caught in a bind, Mr Ng noted. Health insurance provides a safety net against unexpected health issues and offers individuals and their families protection in case major medical treatment becomes necessary. Mr Ng said an individual could build up savings specific for medical needs as another safety net. The fund can be used to pay any pre-hospitalisation procedures such as scans, blood tests or post-hospitalisation expenses like physiotherapy or speech therapy. Policyholders have to pay pre- and post-hospitalisation expenses in cash and then submit the claims for approval, Mr Ng added. Furthermore, some claims might take longer than usual to process. Mr Ng has seen cases drag out for as long as six months. Claimants will face a cash-flow crunch if they do not set aside enough cash on hand, he added. There are situations where individuals will need to pay medical costs upfront, though this is not always so, Mr Ng noted, adding that they just need to ensure they have an adequate amount to supplement those needs. Otherwise, they may be compelled to use the money set aside for other purposes, like their children's education or their own retirement. 'The money has to come from somewhere.' So, by setting aside say $20,000, individuals know how much money they have for such exigencies and will not have to take the money from their other financial funds, Mr Ng said. However, Associate Professor Walter Theseira from the Singapore University of Social Sciences, said it is not efficient for most people to maintain 'substantial funds in cash for medical needs', given that these are infrequent and large. He said the point of having more comprehensive insurance is to reduce the need to maintain funds just for medical purposes. If insurance does not give individuals such assurance, 'it is not of much value as an insurance product'. The Ministry of Health (MOH) has said it is engaging with GE to better understand the impact of its decision to suspend pre-authorisation certificates for Mount Elizabeth hospitals. In its reply to queries from the media on June 19, MOH said IP insurers 'would have to ensure that policyholders continue to be able to access the full benefits of their policies in accordance with the terms and conditions for claims, as stated in their policy contracts'. SAS' Mr Lee said GE is not in breach of contractual obligations. This is because 'issuance of Certificate of Pre-authorisation is at Great Eastern's discretion', according to the policy contract that SAS has sighted. According to GE's website, the insurer states that it has 'observed that, over the past few years, certain private hospitals have been charging significantly more for similar treatment or the same clinical outcomes'. Mr Lee noted that by withdrawing pre-authorisation for the two hospitals, GE hopes that it will help address 'the issue of rising charges from the two hospitals'. Prof Chen from the NUS Business School said that GE is prioritising healthcare providers that offer high-quality care and better cost management, specifically those that are more cost-effective and transparent about pricing. Having looked through the financials of all the IP insurers which filed their latest 2024 results with the Monetary Authority of Singapore, Havend's Mr Ng said he can see that GE is 'trying to control the cost levers' within its control. The insurer posted an underwriting profit in 2024 of $4.8 million, after making an underwriting loss of $44.9 million in 2023. This makes GE one of the three IP insurers which turned in a profit in 2024. The other two are Prudential and AIA. Three other IP insurers, Singlife, Income and HSBC Life, widened their underwriting losses while the last one, Raffles Health, narrowed its underwriting losses. Mr Lee said that insurance, especially in cases requiring little or no out-of-pocket expense, strengthens policyholders' sense of affordability. Demand induced by this stronger sense of affordability can drive up medical costs, he noted, adding that this never-ending cycle of medical cost inflation can be broken if the sense of affordability gets meaningfully dampened. However, Mr Lee pointed out that there are other factors such as shortage of medical professionals, supply chain disruptions and medical innovations that will drive up medical inflation. He added that if medical costs continue to rise, insurers will have no choice but to raise premiums because there is hardly any pricing buffer left in the rates being charged. Mr Lee said: 'At its core, this pre-authorisation withdrawal aims to address rising medical costs that, if poorly controlled, lead to premium rates spiralling upwards in future.' Prof Theseira added: 'This certainly could be perceived as a shot across the bow for private hospitals and doctors who have higher than average charges. 'If the decision changes patient behaviour, it would pressure private healthcare providers to moderate charges or risk similar actions being levied against them by other insurers.'
Straits Times
29-06-2025
- Health
- Straits Times
Forum: Sustaining affordable healthcare is a shared responsibility
We refer to the Forum letter 'Insurers' restriction of patient choice undermines trust in system' (June 19) and wish to provide context on pre-authorisation and panel doctors. To ensure a sustainable healthcare ecosystem, all parties need to play a part in making quality healthcare affordable and accessible. Insurers and patients are payers of healthcare services. Healthcare providers who recommend treatments and charges must do so responsibly to manage healthcare inflation. The year-on-year increase in medical costs is untenable, and Integrated Shield Plan (IP) insurers will continue to be proactive in introducing measures to ensure patients continue to receive quality care while balancing the collective needs of policyholders to keep premiums affordable. Ultimately, policyholders bear the brunt when medical and claims costs escalate. This is why IP insurers regularly review claims data and update their practices, measures and controls to ensure a sustainable healthcare system. Pre-authorisation and panel doctors were among measures recommended by the multilateral Health Insurance Task Force in 2016 to address escalating healthcare costs. Pre-authorisation is a service – not a contractual clause – that gives policyholders assurance that their treatment will be covered when deemed fair and medically necessary. Not all IP insurers offer this service, and, where it is limited to selected hospitals, it is often due to cost or implementational considerations. The absence of pre-authorisation does not restrict a policyholder's choice of healthcare provider. Besides pre-authorisation, policyholders may apply for an electronic letter of guarantee as a waiver of deposit, reducing the need for upfront payment. Panel doctors provide quality treatment at pre-agreed rates, and policyholders may enjoy additional benefits such as lower co-payments. The introduction of panel doctors has reduced instances of over-treatment and over-charging, helping to ensure a more sustainable healthcare system for all. Despite rising premiums, the total IP portfolio continues to operate at single-digit gross margin and sometimes at a loss. The insurance industry is committed to policyholders' interests and to communicate any changes to benefits and coverage. We urge all parties – including doctors, hospitals, government agencies and patients – to work collaboratively in managing healthcare costs to ensure continued access to quality healthcare in Singapore. Chan Wai Kit Executive Director Life Insurance Association, Singapore More on this Topic Forum: What readers are saying Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
25-06-2025
- Business
- Business Times
The Integrated Shield Plan is broken
I REFER to the article, 'For Integrated Shield Plan insurers, raising premiums should be a last resort'. (BT, Jun 24) But as the French would say, it's 'au contraire'. For years, insurers have followed the path of least resistance – raise premiums or amend policy terms to suit their financial interests. Policyholders' protests and concerns be damned. All in the name of sustainability; ironically, sometimes with the encouragement or tacit approval of the government. The introduction of co-payments under IP policy riders (originally sold on the basis of eliminating co-payments under the main policy) is a case in point. The supporting narrative used by both insurers and the government is that claims are much higher than anticipated for a variety of reasons: high healthcare cost inflation, rapidly ageing population (didn't they know?) and some abuses by doctors as well as patients. Our insurers have obviously made wrong actuarial claims assumptions. Should they not take more responsibility for their mistakes? Why pass the buck to policyholders? In what other business can a company ask their customers to pay for their mistakes? If insurers need to make a course correction, they should apply their new rules/premiums to new policies. Many existing policyholders have paid premiums for years or decades. But now we are trapped; we cannot switch insurers due to our age. Insurers know. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up My family is a case in point. My five family members have been insured under Income Insurance's IncomeShield policies (with riders) for more than two decades. Until about two years ago we had never made a claim. In March 2025, when I renewed, the total premiums for my own Enhanced IncomeShield Preferred policies (main policy and rider) rose 48.3 per cent while the premium for my plus rider policy jumped 70.7 per cent. Over the last three years, my Enhanced IncomeShield Preferred premium more than doubled and the premium for the rider jumped 144.5 per cent. This is after being required since 2021 to make co-payments on the rider in the event of a claim. Much of the talk of sustainability seems to have been confined to concerns about the financial interests of insurers. But many policyholders have already reached or passed their end point. As has been reported, some had to abandon their policies while others were forced to downgrade their coverage due to huge premiums increases – sadly just at the time when they need the coverage most. Singapore's Integrated Shield insurance scheme is clearly broken. It is imperative that the government takes the lead to study how reforms can be effected to ensure long-suffering policyholders can in fact be spared their detriment. Ho Swee Huat
Business Times
23-06-2025
- Business
- Business Times
Surge in claims drags some Integrated Shield insurers into the red; higher premiums expected
[SINGAPORE] A double-digit surge in claims is putting pressure on the profitability of Integrated Shield Plan (IP) insurers, raising the spectre of more premium hikes. For six IP insurers, net claims surged by between 9 and 27 per cent last year, due to medical cost inflation and higher claims particularly among older policyholders. Four out of seven IP insurers posted underwriting losses in 2024. Those in the red were Income Insurance, Singlife, HSBC Life and Raffles Health Insurance (RHI). The only one to show a decline in net claims – of 18 per cent – was RHI. General manager Ben Siah said that RHI takes 'a disciplined approach to adjudicating claims, ensuring that claims paid out are reasonable and customary'. 'Continued discipline will be increasingly important due to the persistently high inflation in medical claims costs,' he added. Income went from an underwriting profit of S$16.1 million in 2023 to a loss of S$49.5 million in 2024 despite raising premiums across the board last year. The insurer said that its premium adjustments were introduced gradually from the third quarter, and it would take time for the impact to be fully reflected. Income's 2024 IP performance was hit by higher claims costs due to medical inflation, 'higher incidence and severity rates due to an ageing population, and a backlog of claims from 2023 caused by delayed processing by medical institutions that flowed into 2024'. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Singlife's losses deepened from S$26.2 million in 2023 to S$59.7 million in the following year. Helen Shen, Singlife group head of products, noted that it made a provision in 2024 'based on (its) worsening claims experience'. 'This allows us to better manage our financial position in the short term and our financial resilience in the long term.' The standout is Prudential, whose underwriting profit more than doubled from S$11.4 million in 2023 to S$25.3 million in 2024. Prudential was the first in the market with claims-based pricing in 2017, which has apparently helped to rein in the overconsumption of healthcare. Prudential chief health officer Sidharth Kachroo observed that product design, such as co-payment and claims-based premium pricing, 'has been important in encouraging the mindful use of healthcare services'. 'Customers who don't make any claims enjoy premium discounts at their next policy renewal and we have received feedback that they appreciate this discount,' he noted. Great Eastern's (GE) IP portfolio reversed from a loss of S$44.9 million in 2023 to a profit of S$4.8 million in the following year. AIA was also profitable last year at S$7.2 million, though the underwriting profit was lower than the S$12.7 million previously. AIA said: 'While we observe some changes in our underwriting profits from the previous year, it's important to view this within the context of our substantial portfolio, which exceeds S$900 million in premiums. Our overall profitability levels remain relatively consistent between the two periods.' Like other insurers, it cited medical cost inflation, but also singled out 'hospital and facility-related charges'. At least three insurers are raising premiums. For Singlife, the adjustment is across its portfolio by an average of more than 10 per cent. HSBC Life's adjustments for 2025 apply to its private-hospital base plans and riders, 'in line with industry standards', said the company's chief health officer Manu Tandon. Prudential is raising premiums for two private-hospital riders. AIA and RHI said that they are still reviewing their options. It could not be confirmed if GE is raising premiums. Increasing medical costs Based on Mercer Marsh Benefits' survey of insurers in 55 markets, the medical trend rate – defined as the year-on-year increase in claims – puts the expected 2025 rate for Singapore at 11 per cent, lower than the Asia average of 13 per cent. Asia's trend rate is pushed up by outliers such as the Philippines (21 per cent) and Indonesia (19 per cent). Aon's expected medical trend rate for Singapore, net of domestic inflation, is 11.5 per cent in 2025. Public-hospital bills are not spared from claims inflation. Prudential said: 'We have seen an upward trend in the number of claims and average bill sizes from both public and private hospitals over the last few years. This trend continued in 2024, where the volume of claims increased by over 15 per cent from 2023.' Alex Lee, president of the Singapore Actuarial Society, said that as a product category, long-term medical insurance is running at 'near break-even' for the IP insurers taken in aggregate, based on returns filed by insurers with the Monetary Authority of Singapore. 'If medical cost continues to rise, insurers will have no choice but to raise premiums because there is hardly any pricing buffer left in the rates being charged if premiums are not raised,' he added. 'Macro factors such as a shortage of medical professionals, supply-chain disruptions, and medical innovations are systemic issues faced by all consumers of healthcare, and therefore all insurers. Switching of insurers does not shield policyholders from these macro factors.' A GE spokesperson noted that the insurer's profit margin is just 0.8 per cent of earned premiums, but that medical inflation exceeded 10 per cent. 'Therefore, an upward adjustment in premiums is inevitable, but raising premiums alone is not the solution. The bigger challenge is addressing medical inflation driven by a mindset of 'buffet syndrome' consumption, which is why we are continuously refining our product proposition to encourage more conscious consumption among customers in terms of their treatment choices,' the spokesperson said. GE recently took the market by surprise when it temporarily halted the issuance of pre-authorisation certificates for policyholders seeking admission into two hospitals – Mount Elizabeth and Mount Elizabeth Novena. The insurer said that based on its like-for-like comparison, bill sizes at these two hospitals were 20 to 30 per cent higher than at other private hospitals. GE said of its return to profitability: 'The annual review of our IP premiums has contributed to the improved financial performance of our IP portfolio, supported by premium revisions made (last year), more disciplined annual reviews of premiums, and efforts to reduce distribution expenses.' Last year, it rolled out two riders designed to encourage 'conscious consumption', where the S$3,500 deductible is not covered. 'As healthcare costs continue to climb, fostering a more mindful approach to healthcare consumption will be key to ensuring long-term sustainability and affordability for all policyholders,' the spokesperson noted. Singlife's Shen said that the firm has already raised premiums this year 'across (its) portfolio by an average of over 10 per cent for increased healthcare consumption'. The insurer has also implemented some initiatives, including working closely with medical providers to manage claims costs 'through negotiated fees and pre-agreed treatment packages'. 'This approach helps keep overall bill sizes in check while ensuring policyholders receive quality healthcare without unnecessary financial strain,' said Shen. She added that the firm also introduced no-claims discounts of up to 20 per cent for eligible policyholders 'to encourage healthy lifestyles and responsible healthcare usage'. Insurance advisory Havend's chief executive Eddy Cheong said that higher premiums are a 'foregone conclusion'. 'Policyholders need to be realistic about their healthcare expectations… If this trend (of higher premiums) continues, more seniors will downgrade or give up their IP to fall back on to MediShield Life,' he observed. 'Considering this, you should first weigh your healthcare expectation with your financial ability in IP decision-making, more so for retirees and those transiting into retirement. Even within the same hospital benefit level, the premium rates can range widely across the seven IP insurers.' Its compilation of lifetime premiums for private-hospital IPs range between S$360,000 to S$900,000, including riders. 'Hence, you should also find out what additional benefits your IP plan is offering you to justify the additional premium.'
Business Times
23-06-2025
- Business
- Business Times
For Integrated Shield Plan insurers, raising premiums should be a last resort
[SINGAPORE] That medical inflation is on the rise is not surprising, nor that it outstrips overall inflation by three or four times. But what I found sobering in my perusal of Integrated Shield Plan (IP) insurers' accounts is the strong double-digit increases in net claims. The data points were extracted from insurers' 2024 returns filed with the Monetary Authority of Singapore. For six IP insurers, net claims rose by between 9 and nearly 28 per cent in 2024, compared to 2023. This suggests bill sizes and claims are rising at a clip far faster than medical inflation, estimated at 10 to 11 per cent. The exception was Raffles Health Insurance (RHI), whose net claims fell by 18 per cent. RHI entered the IP market around 2018, and likely has the smallest policyholder base. On the face of it, the factors driving the surge in claims are also obvious. The biggest culprit is cost inflation due to salaries and advanced medical treatments including more sophisticated screening technologies, among other things. Second is an ageing population who use healthcare more frequently and intensely. Third is over-charging by private hospitals. Great Eastern's (GE) temporary suspension of pre-authorisation certificates at two Mount Elizabeth Hospitals is symptomatic of this. GE has said its own like-for-like comparison shows bill sizes at the two facilities are 20 to 30 per cent higher than other private hospitals. Fourth is wastage, which is not transparent and surely, not insubstantial. Mercer Marsh Benefits' survey of 225 insurers across 55 markets hints at this. Among Asian respondents, 'inefficient and wasteful care' (68 per cent) is the third-biggest concern, after 'high-cost claimants' (87 per cent) and new cancer therapies (74 per cent). BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Asia's medical trend rate – defined as the year-on-year increase in claims – is projected at 13 per cent for 2025, higher than the global average of 10.9 per cent. Singapore's medical trend rate is 11 per cent. Rising claims have taken a toll on IP insurers' profitability. Four of the seven IP insurers are in the red, and some have begun to raise premiums this year. Given that IP insurer's profit margins are thin, higher premiums may well be inevitable. But with the frequency of premium hikes to date, it should be a last resort and not the first lever to pull. Already, measures are in place to curb over-consumption, including claims-based pricing by some insurers. Insurers should also take a hard look at costs – both internal and external. These include management and distribution expenses. A pattern of outsized bills sizes is another red flag. GE's suspension of pre-authorisation certificates has provoked an outcry, but I applaud them for taking action to dampen over-charging. Insurance, after all, is a risk-pooling mechanism. Less than 20 per cent of policyholders in an IP risk pool makes a claim in any single year, as the Singapore Actuarial Society pointed out in a paper on IP portability last year. They dutifully pay premiums and suffer premium rises. There is a greater benefit for the entire risk pool when charges are reined in for the sake of more sustainable premiums in the long run. Left unchecked, escalating premiums may well force people out of IPs altogether, which would neither benefit them nor the risk pool itself.
