Wednesday, August 18, 2004

medical insurance is a mystery to me

"MediShield premiums to go up but will be kept 'affordable' "

the Health Minister announced yesterday that MediShield premiums will rise in the near future (although there has not yet been an announcement how much they will rise). i have no doubt that they will remain affordable, because the premium right now is a mindblogging $12 a year. twelve Singapore dollars per annum.

i thought i had read that number wrong. 12 dollars a month maybe, i could believe. but $12 a year? that costs even less than my highly highly subsidised schoolfees! my mind boggled.

and now, although the premiums will rise, the amount you can claim and the things you can claim for will also increase accordingly. you know, for all i complain about what the government does, occasionally something like this zooms along and totally smacks me in the head.

my premiums for fairly crappy medical insurance in the states would be crippling for my miserable income if i had to pay them. (thankfully, the scholarship board pays all 'mandatory' school-related fees, and health coverage is one of them, since college insists you have coverage whether with their preferred provider or your own) i mean, it runs into hundreds of dollars per ten week term. if i had to pay for insurance the entire year it would be well above a thousand dollars. but in Singapore, for MediShield (which covers catastrophic illness-related hospitalisation), you pay just $12 a year??! granted the coverage is much less -something like 40% of the cost- but still.

the cost of public healthcare -that is, government hospitals and polyclinics (clinics run by the govt with highly subsidised costs)- in this country is stunning, but in a totally different way than the cost of healthcare in the states is stunning. i mean, seriously. if you don't go to private doctors and private hospitals, you can get excellent care (let's not talk about service, but care, first and foremost, ie making sure you get better and not die) for a really low cost. -blink-

one quibble, finally:

Said Mr Khaw: 'We must remove cherry-picking and reverse the fragmentation
of the MediShield risk pool.'

One way to do this, he said, is to make it a must for people to subscribe to a basic MediShield scheme before they can buy the extra products - such as private hospitalisation benefits - offered by commercial insurance companies. If this comes to pass, it will be unprecedented, and could limit private insurers to merely offering plans that complement the MediShield scheme, rather than independent ones.

But this is not unusual, said Mr Khaw, and he used a cable TV analogy to explain: 'You can subscribe to the HBO movie channel if you want by paying extra, but before you do that, you must subscribe to a basic tier.'

that's a totally weird analogy. but that's beside the point. while i agree that enlarging the risk pool is a great thing re: keeping down premiums and raising level of care available for the price, i don't think that compulsory MediShield is the way to go. look, that's like saying 'we have an inferior product, but since we are the government, we are going to force everyone to buy this inferior product before they are allowed to get a better one.' oh wait. that's not even 'like' saying that, that IS saying that. if you can make MediShield attractive, people will go to it anyway. come on, low premiums, high coverage, what more can people ask for in an insurance scheme, right?

of course, if you don't force everyone to buy MediShield, you might wind up with the reverse of private insurer's cherry-picking: adverse selection. MediShield will wind up covering the high-risk people that private companies won't insure, and hence premiums will spiral upward and/or MediShield will go bankrupt. hmm.

it's just that saying 'we'll force you to buy MediShield' automatically puts my hackles up. why can't they phrase things more nicely? -sigh-

update: a most timely article in the Times today about the high cost of health insurance in the US raising labour costs and contributing the unemployment. and this isn't even the auto industry! take a look: "Cost of Benefits Cited as Factor in Slump of Jobs"

3 Comments:

At 4:57 PM, August 18, 2004, Blogger The Legal Janitor said...

maybe we can see this as another form of redistributive tax? albeit a flat tax is actually regressive...

The way I see it, even if everyone pays the MediShield premium, I think only the poor, or at least those without coverage from private insurance, will be the ones utilizing MS coverage. More likely than not, those who are financially better off would have private insurance. In this way, the risk pool is larger, and the poor are better protected... what do you think?

On a related note, I believe many things in Singapore are cheaper than other countries, ie consumer goods, food, transport, health care, but costs associated with land use are still very high. So I guess you can treat it as though the cost of living are still the same in the end, just that numbers have shifted around...

 
At 10:48 AM, August 19, 2004, Blogger J. said...

i think it's wrong to force everyone to buy a certain -government provided, at that- form of medical insurance just to prevent adverse selection. though it would also be just as wrong to force private insurers not to cherry-pick.

the best solution, in my opinion, is to make sure that MediShield is a relevant and useful form of medical insurance so that most people will opt to take it even if they could afford more expensive medical insurance. it's not something impossible for the govt to do, esp if they are willing to subsidise it. or to increase the coverage. not to use government monopoly power to force everyone to buy MediShield, however temptingly easy that solution is.

and re: cost of living -ah, but if you don't own land, or if you live in a paid-for HDB flat, then the cost of land doesn't really affect you. and if you don't drive, like me, then everything really is cheap, even transport. and the essential things are tres cheap, compared with other modern industrialised nations.

 
At 4:38 PM, August 19, 2004, Blogger The Legal Janitor said...

True true, I agree with you about the essentials being more affordable than in other countries. Healthcare in Australia is also a nightmare, as is eating out and entertainment...

But I still can't help having this nagging thought at the back of my head that we're still paying for it somehow... through some hidden cost or something...

Btw, I linked to you on my libertarian blog, I hope you don't mind... =)

 

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