Last updated on August 2nd, 2018 at 04:14 pm
As reported in a recent straits times article, NTUC incomeshield lost $14m to claims while AVIVA Myshield lost $10m. It is unsurprising now that both these insurers will soon be raising their premium rates.
NTUC INCOMESHIELD PLUS RIDER
From Oct2016, Plus rider premiums (For PREFERRED PLAN ONLY) will rise about 10%-20% across different ages. This is the new table and if you are an existing policy holder, you will receive the premium revision notice soon. Do note that if you are on assist rider (with 10% co-payment) instead, there will be no change. I’ve usually advocated using this rider for those who do not have a preference.
Aviva MyHealth Plus
The new premium rates are yet to be fully announced. From sources, there will be substantial increment to premiums for the Plan 1 Option C rider. Please check with you planner if you are using the Aviva IP currently. Previously, AVIVA absorbed charges for medishield if your child is in the FOC plan2. Looking forward, they will not be doing so and you may have to pay an extra $130/year more from your medisave for each kid. Will update this post when it is released.
There will be a change to their moratorium underwriting method but this affects new applications only.
What does this show?
Medical inflation is real and higher consumption of medical services have shown no signs of abating! I’ve a buddy who is an expert in IT developments of the healthcare sector and he is adamant that the next big thing will be preventive healthcare. Perhaps that is the only way rein in consumption. In April earlier this year, I posted on the rise in IP rider premiums for Prudential who lost $12m themselves in 2015. You may check on “Did you know that your medical insurance cost just increased?”.
I wouldn’t be surprised if AIA and GE LIFE face losses at some point in future. The underwriting is largely similar and the hospitals will bill the same way. New player AXA Life is trying to innovate out cost savings by partnering with a healthcare network to assess all potential claims. It remains to be seen if it is effective and you may read “AXA shield offers more but is not a game changer” through this link.
The best way to manage your cost in the long run may be to accept some form of co-payment for hospital bills. This means using partial riders (like the NTUC assist rider or AVIVA Option A) or not taking IP riders at some stage in your life. Plans covering to “A” wards and below may be more resilient to medical inflation and premiums may rise more slowly in these plans.
The views and opinions expressed in this article are those of the author and do not represent the views of any other organisation.