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Who is minding the gap on health in health insurance?

Who is minding the gap on health in health insurance?

Source: Straits Times
Article Date: 17 Sep 2020
Author: Wong Chiang Yin

A regulatory void exists with MAS regulating the financial aspects of health insurance providers, but no agency regulating the health coverage provided.

MediShield Life was implemented by the Government in November 2015. Since then, all Singaporeans regardless of age or pre-existing diseases have cover from this universal health insurance scheme.

Together with Medisave, should a Singaporean choose subsidised care (in a Class B2 or C ward) from restructured hospitals, MediShield Life will largely ensure that Singaporeans do not have to make out-of-pocket payments for 90 per cent of bills.

Singaporeans who desire to seek care from "private" classes (B1 or A class) in restructured hospitals or private hospitals have the option of buying Integrated Shield Plans (IPs) from private insurance companies.

There are now seven insurance companies selling IPs, or IP providers. IPs give higher payouts that will cover much of the larger bills that arise from private classes of restructured hospitals and private hospitals.

Both MediShield Life and IP premiums can be paid for by Medisave accounts.

Earlier this year, one IP provider, Aviva, decided it would no longer provide coverage for diagnostic endoscopies to its IP policy holders. Diagnostic endoscopies are frequently performed to diagnose many conditions, including common cancers such as colon, stomach, bladder and nasopharyngeal (nose and throat) cancers.

This naturally created much unhappiness and concern in the medical fraternity. A delay in cancer diagnosis has ominous consequences. The Singapore Medical Association wrote to The Straits Times Forum page (Insurers set dangerous precedent by not covering diagnostic procedures, Aug 29) to highlight this problem.

The chairman of the Government Parliamentary Committee for Health, medical oncologist Tan Wu Meng, referred to this letter in his parliamentary speech on Sept 1 highlighting the problems facing people who have bought IPs. His comments are insightful and bear reproducing here.

"In a Straits Times Forum letter published on Aug 29, the Singapore Medical Association shared that some insurers are no longer allowing claims for diagnostic endoscopies even when medically necessary."

Describing this as "a serious development" with implications for patient care and safety, he added: "It is also a very visible sign that individual patients, individual customers do not have bargaining power to stop insurance companies from such practices. When an insurance company moves the goalposts for an Integrated Shield Plan, it is not so easy for a patient to switch provider, because existing conditions become pre-existing conditions under the new policy."

He called for the authorities to step in. "The invisible hand of the market appears to have become unbalanced. And so I call upon MOH and MAS to look into this and see if the visible hand of the regulators needs to come in to level the playing field for patients," he said. The two agencies are the Ministry of Health (MOH) and Monetary Authority of Singapore (MAS), which regulates financial services including insurance.

In this case, fortunately, Aviva reversed this policy on Sept 4 and reinstated coverage of diagnostic endoscopies. But this incident has opened up some questions of how IP providers can unilaterally decide on what to cover and what not to cover in their IPs.

In the process, although a policy holder may have paid his IP premiums, he may even be worse off than another person who relies only on "garden-variety" MediShield Life for healthcare insurance coverage.


Let us take the example of a colonoscopy, since it is the gold standard for detecting the commonest cancer in Singapore - colorectal cancer. The whole idea of performing a colonoscopy is to detect cancer or polyps as early as possible. There is a high chance that non-cancerous polyps will become cancer later on and they should be removed during the colonoscopy. Polyps are common findings in colonoscopies.

Depending on how many and how big these polyps are, these procedures are classified as either Table 3A, 3B or 3C. Table of Operations is the MOH's way of classifying operations by complexity. They range from Table 1A (least complex) to 7C (most complex).

If a claim is made for a colonoscopy where there are polyps found and then removed during the procedure, MediShield Life actually makes payouts; the size of the payouts is pegged to the bill sizes of subsidised classes in restructured hospitals. Basically, MediShield Life is designed to make payouts for Table 3 operations or higher. For Table 1 and 2 operations, MediShield Life is not needed and Medisave alone should suffice as the bill sizes are smaller.

Some may think that since there are polyps to be removed in the procedure, then such colonoscopies are deemed "therapeutic colonoscopies" and hence will be covered.

However, in an actual case experienced by a private sector gastroenterologist, the IP claim was initially denied because someone decided that removal of polyps was a "preventive measure", given the fact that the polyps were still non-cancerous at the time of the procedure, ignoring the fact that polyps have a significant chance of turning cancerous later on.

In a March 16 letter signed by Aviva chief executive officer Nishit Majmudar, he quoted two instances of alleged "over-consumption and over-servicing within the healthcare sector", in an apparent attempt to justify withdrawal of the company's IP coverage for diagnostic endoscopes, including "any treatment to prevent illness".

I think such an approach is misguided. There are more than 14,000 registered medical practitioners in Singapore. Truth be told, there will always be a few unethical doctors among them who will over-service patients and they need to be taken to task.

But there are established avenues for this through the MOH or the Singapore Medical Council. Civil litigation and mediation can also be used to address certain disputes involving money.

Diminishing the scope of IP coverage to below that of even MediShield Life by withdrawing coverage of certain procedures so as to address over-servicing is not the way to go.

There is a misconception that IPs are bought only by the middle class or wealthy. In fact, according to a report published by the Health Insurance Task Force in 2016, two-thirds of Singapore residents bought IPs. Half of these IP policy holders also bought riders that provided first-dollar coverage (which obviates the need to pay deductibles and co-payment).


The decision to withdraw coverage for certain procedures by IP providers highlights a bigger problem with health insurance regulation in Singapore today. The sale of insurance products sold in Singapore is regulated by the MAS mainly through the Insurance Act and Financial Advisers Act (FAA). The Insurance Act deals mainly with licensing of insurance companies and the financial management of these companies, such as maintaining fund solvency, capital adequacy, custody and maintenance of assets and so on.

In addition, insurance is divided into life and general insurance. Health belongs to general insurance. While there are strict definitions and requirements governing the sale of life insurance products under the FAA, what is covered or not covered in general insurance (health insurance, for example) is usually deemed a commercial matter between the insurer and the insured.

The authority that administers the Insurance Act is the MAS. The Insurance Act focuses on the safety and soundness of the regulated entity and, therefore, indirectly safeguards the consumer. But it does not really talk much about protecting consumer rights in terms of scope of coverage or size of payouts.

MAS probably does not have the expertise or the experience to take a position on what diseases or procedures should or should not be covered under an IP.

The healthcare expertise obviously resides with the MOH, but it is not legislatively positioned to regulate insurance companies or health insurance.

Interestingly, MAS has also issued guidelines on fair dealing in 2009 under the FAA. But it is unclear if health insurance products, especially IPs, come under financial advisory products sold by licensed financial dealers or financial institutions. They probably do not, because if they did, one would really wonder how an IP provider unilaterally and suddenly withdrawing coverage for certain procedures would constitute fair dealing.

As such, the environment today is as what Dr Tan has said in Parliament - the individual patient lacks bargaining power to stop IP providers from moving the goalposts by changing the scope of coverage.

The current regulatory framework also does not give these individual patients sufficient protection from these practices. Today, it may be diagnostic endoscopies, tomorrow it may be something else.

To effectively and holistically regulate health insurance, and in so doing directly protect the interests of patients, one should look at both aspects of the business - the financial and actuarial part, as well as the healthcare part.

Unfortunately, there appears to be a regulatory void on the healthcare side that needs to be addressed urgently. This is especially so when IPs involve Medisave monies which, in turn, are taken from our Central Provident Fund (CPF) savings.

After all, since the founding of our country, the Government has always been a prudent and active custodian of how CPF money can be used. We need to regulate the health in health insurance IPs.

Dr Wong Chiang Yin is a public health specialist working in the private sector. He was formerly president of the Singapore Medical Association (2006 to 2009) and is now an assistant master of the Academy of Medicine Singapore. He is also a member of the Singapore Medical Council.


Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.


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