Are we setting aside too much reserves for MediShield Life?

The MediShield Life Fund is said to be designed in a way that it is self-sustaining and based on actuarial principles, with each age group paying premiums, under the compulsory MediSheld Life which all citizens in Singapore have to subscribe to, to broadly support its own current and future claims.

“This means that the Fund has to set aside enough monies as reserves to honour payouts for projected future benefits, and to hold a buffer against adverse scenarios.” – MOH

According to the Ministry of Health‘s website – “As at end 2016, the total assets of the Fund stood at $ 5.9 billion. Over the past 5 years, on average, about two-thirds of the Fund comprised reserves to fund the expected scheme liabilities.”

Does this mean that the claims paid as a proportion of the assets of the fund were about $1.967 billion (one-third), with about $3.93 billion (two-thirds) as reserves?

From the table below – the actual claims paid was $2.734 billion with $3.417 billion required reserves.

 

The claims paid to premiums collected ratio was 43.2% ($2.734 billion divided by $6.332 billion).

Is this the lowest claims to premiums ratio of all the national health insurance schemes in the world?

If we include the interest earned by the fund – what is the loss ratio?

As to MOH stating, “The following table shows the Fund’s incurred loss ratio over the period 2012 to 2016. The incurred loss ratio over the period is 99%. This is derived from the Fund receiving $4,871 million in premiums while paying out or setting aside $4,815 million to support policyholders’ claims and scheme liabilities”

Since it is a mandatory scheme which even Singaporeans and PRs living abroad have to pay premiums, and the premiums increase with age as well as the premiums and premium subsidies can be decided almost at the will of the Government – is there really a need to have so much reserves “to support policyholders’ claims and scheme liabilities”?

Is this the national health insurance scheme with the ‘most reserves’ in the world?

 

 Leong Sze Hian

 

 

 

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5 Responses to “Are we setting aside too much reserves for MediShield Life?”

  • LIONS:

    Its just *choping* your CPF so you got money to pay your hospital bill$ plus G$T TO US!
    WE are just playing it save in case you got no money to pay us?

    We are the ONLY ONE$ who can enjoy $8 MAJOR SURGERY by TOP SG DOCTORS.
    YOU PEASANTS must pay TOP $ for INDIAN FT-doctors,like it or not.

    Else,you can choose to commit suicide like so many ELDERLY SGS had already done so.
    You think we care?
    You got to be joking!

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  • patriot of Temesak:

    Any form of MONIES to be collected to Fund their LEEgal Gambling is an ASSET ENHANCEMENT for the Evil Regime… the 69.999% sheepish IDIOTS willingly & stoopidly PAY & PAY!!!

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  • smiling face tiger CH Tat:

    we are first encouraged to buy enhanced health insurance when ah cow said he pay $8 for his bypass when ah cow is then the health minister

    we can choose to buy different type of plan based on our affordability

    now becos excess claim on health insurance policies and insurance cannot earn, this smiling face tiger come out to say

    The zero co-payment feature of these full riders has resulted in a “buffet syndrome”, leading to over-consumption, over-servicing and over-charging of healthcare services

    this smiling face tiger, last time discourage use of dialect, when election come, he sing hokkien song…

    hope he will admit to hospital and ask him what class he want to stay in hospital ?

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  • Kelvin Wang:

    Gahment announced Medishield life will cover those uninsured and those with pre-existing sickness. But who pays for it eventually. Think. I had to downgrade my policy to ‘subsidize’ these 2 groups. The daft 70% still daft.

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  • Fiscal sophistry:

    With such amounts of healthcare reserves from citizen financial contributions, Medisave would have become a comprehensive national healthcare program in any other democratic first world country.
    But what coverage does it provide today?

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