Building up a reserve on Medishield

Published in the Straits Times Forum on 3 October.

I refer to the letter from the Ministry of Health entitled “MOH exploring Medishield coverage for congenital illnesses” (ST 28 Sep 2009).

The Ministry said, “Medishield must build up sufficient reserves to fund future claims, as it is a long-term health insurance policy.”

I am not clear why this has to be the case. The premiums charged for Medishield in each year are based on each age band and are adjusted according to the claim experience.

If there is an intent to build up a reserve to reduce the premium rates that will be charged at the higher ages, the principles and method to be adopted must be stated clearly and the stakeholders must be allowed to express their views on this matter.

Without transparency, there is a risk that some groups may be unfairly treated or a huge reserve may be built up that will never be used in the lifetime of the contributing members. This will unnecessarily add to the cost of health care.

If there is sufficient reserve in the current premium rates, it may be possible to cover the congenital illnesses without any increase in premium rates, or to reduce the Deductible and make Medisheld more attractive to the members.

Tan Kin Lian