Private health insurers to allow policyholders to switch to new riders without additional underwriting

Seven years ago, when MOH

, it did so only for new riders sold from March 2018.

Nevertheless, Integrated Shield Plan (IP) insurers subsequently adjusted their older riders to incorporate the co-payment requirement.

MOH’s latest requirements will similarly be imposed only on new riders, and the decision on what will happen to existing riders, which are commercial contracts between insurers and their policyholders, is left to the insurers to decide.

The Straits Times reached out to all seven IP insurers that sell riders on top of IPs, and asked for their plans regarding the existing rider products.

None of the insurers could confirm detailed plans at present.

AIA chief marketing and healthcare officer Irma Hadikusuma said if there are any changes to the coverage of its IP riders, AIA will notify its policyholders at least 31 days in advance, to ensure they have ample time to prepare and make informed decisions about their coverage.

A spokeswoman for Great Eastern said existing rider policyholders will continue to enjoy the benefits under their current plans, and can choose to switch to the new riders at any time after the products are launched.

HSBC Life chief health officer Manu Tandon said HSBC will continue to assess the rider plan and provide existing policyholders with advance notice on any policy changes.

Emphasing that there is no immediate impact on existing riders, Income Insurance chief customer officer Dhiren Amin said the company will continue to assess if changes would be needed to keep the healthcare insurance sustainable for its policyholders, and will inform them of policy changes.

Echoing LIA’s call for policyholders to discuss insurance coverage with their financial advisers, Dr Sidharth Kachroo, Prudential’s chief health officer, said existing rider policyholders can still choose to retain the current rider, or switch to any existing Prudential rider.

Raffles Health Insurance (RHI) is currently assessing the situation and will update policyholders in due course.

“An important part of the assessment is the affordability of private healthcare insurance over the longer term for policyholders, to ensure they have the appropriate coverage when it is required”, said RHI general manager Ben Siah.

Ms Helen Shen, group head of products for Singlife, said the company understands that some policyholders may be worried about their coverage, and that it is committed to being transparent about any changes.

“We will update with more details on our new product after careful study of the requirements and the impact they will have on policyholders”, she said.

Currently, a 40-year-old policyholder has to pay around $3,400 in premiums each year for a private hospital IP and rider, and a 60-year-old policyholder pays about $9,500 each year.

MOH has observed that the number of people with riders declines with age and that older age groups are less likely to have riders.

With premiums of new riders expected to be 30 per cent lower compared with existing highest-tier riders, more rider policyholders might decide to switch to the new riders, which would mean IP insurers could collect less in premiums.

Mr Alex Lee, president of the Singapore Actuarial Society, however, believes that more policyholders switching to new riders need not necessarily mean more losses for the insurers, if they also see a corresponding decline in claims payouts.

He added that looking at the trends of how IP and rider premiums have risen in recent years, it would seem that getting people to pay “some meaningful amount of healthcare cost out of pocket” does seem to influence consumers’ choices of where they seek treatment and what services they consume, which in turn helps to control healthcare costs.

Hence, the requirement for riders not to cover the minimum IP deductibles should, in the medium to long term, help dampen cost increases in the private sector, said Mr Lee.