Full IP portability not right solution, may lead to higher premiums: MOH

IP insurers must take a step back and renew fundamental designs of their schemes

- Joyce Teo

Allowing all Integrated Shield Plan (IP) policyholders to switch insurers freely is not the right solution for the issues they face, as it may lead to higher premiums and higher healthcare costs, said Minister of State for Health Rahayu Mahzam.

"MOH does not believe that mandating full portability for IPs is the right solution for the issues faced by policyholders," she said in Parliament on Nov 12. Giving an update on a study by the Ministry of Health to assess the feasibility of IP portability, she said that, most of all, it is not an international best practice for supplementary and commercial personal health insurance to be fully portable.

The usual practice is for insurers to underwrite new policies in order to price the risks of accepting more policyholders with pre-existing conditions into their risk pool. Underwriting can result in the insurer imposing additional conditions on the policyholder's coverage, such as a waiting period during which no claims will be paid or exclusions to the coverage.

Policyholders may also have to pay higher premiums in view of the higher risks, said Ms Rahayu.

"At the national level, this will all contribute to higher costs, and this is where the ministry's concerns lie. We are constantly worried that these private policies are not sustainable. And that's the key thing that we need to look at, because the change in terms is really a sign of this happening," she said in response to a question on IP portability from Dr Tan Wu Meng (Jurong GRC).

Ms Rahayu said the IP insurers need to take a step back and renew the fundamental designs of their schemes.