SINGAPORE - As more cutting-edge medical treatments offer the promise of combating previously incurable diseases, the possible inclusion of such treatments under a national health insurance scheme has been lauded by healthcare experts.

Health Minister Ong Ye Kung announced in Parliament on March 6 that premiums for MediShield Life are set to increase, in order to provide more assurance against large medical bills and to pay for new ground-breaking treatments.

An 11-member expert panel, the MediShield Life Council, is reviewing the scheme and expected to finalise its recommendations by the second half of 2024.

One of the things it is looking into is the expansion of MediShield Life coverage to cell, tissue and gene therapy products, also known as CTGTPs.

While these treatments are promising, many are nascent and very expensive, with prices ranging from a few hundred thousand dollars to a few million dollars per treatment, said Mr Ong previously, adding that insurance coverage will be extended to treatments that are clinically effective and cost-effective.

Associate Professor Jeremy Lim, director of the Leadership Institute for Global Health Transformation at the NUS Saw Swee Hock School of Public Health, said MediShield Life should definitely look at covering CTGTPs as some of the treatments are life-changing.

He raised the example of Zolgensma, an innovative gene therapy that is used to treat children with a genetic condition called spinal muscular atrophy or SMA. As at March 2023, there were about 50 people here with the disorder.

Those afflicted with SMA suffer from paralysis and breathing difficulties, and can die before the age of two. The single-dose treatment corrects the genetic defect and improves survival rates.

Zolgensma was, at one time, the most expensive drug in the world with a price tag of $3 million. The Straits Times previously reported three separate cases of parents in 2022 and 2023 who crowdfunded the money to get their children the treatment.

Prof Lim said: “There are more and more of such therapies in the pipeline, and we have to address these proactively. Premiums might go up modestly, but this is the price to pay for added protection and living in a society where children especially don’t have to die from treatable conditions.”

Associate Professor Wee Hwee Lin, director of the Centre for Health Intervention and Policy Evaluation Research at the NUS Saw Swee Hock School of Public Health, agrees.

She said: “While some may lament that MediShield Life premiums should not be increased because of the inclusion of high-cost therapies such as CTGTPs, the insurance mechanism is actually the most appropriate for protection against such unexpected and catastrophic costs. In fact, that’s what insurance is for, right?”

Prof Lim urged the Government to not just use the usual cost-effectiveness analysis to evaluate if a CTGTP treatment is worth the coverage, but to also consider working with manufacturers to bring in CTGTPs on a value-based contracting model where the price of the drug is tied to how well it performs. This would help keep the cost of CTGTPs affordable in Singapore, he said.

The MediShield Life review is being done against the backdrop of increasing hospital bill sizes.

The Health Minister shared in Parliament on March 6 that bill sizes have grown by 5 per cent annually in public hospitals, and by 7 per cent annually in private hospitals, over the last few years. This means that after government subsidies and MediShield Life, patients still have to pay a substantial out-of-pocket sum.

To tackle the problem, the MediShield Life Council will also look into increasing the amount that a patient can claim for both surgical operations and hospital stays, as well as enhancing outpatient coverage.

Dr Ng Chee Kwan, president of the Singapore Medical Association, explained why the cost of providing healthcare has risen over the years.

High dependency and intensive care units in hospitals are costly to run, he said.

“Increasingly, diagnosis of many medical conditions requires the use of costly scans such as CT, MRI or PET. The use of advanced surgical equipment such as the surgical robot has become commonplace.

“The standard of care for management of some cancers now includes genetic testing and targeted drug therapies. These tests and treatments are expensive, in the range of thousands to tens of thousands of dollars,” he said.

He added: “In the outpatient setting, clinic operating costs are adversely affected by high cost of rentals. Staff wages have grown to keep up with inflation and rising cost of living.”

Some of these costs would inevitably have to be passed on to patients, said Dr Ng, adding that he is reassured that the Government has promised that no one will lose MediShield Life coverage due to a genuine inability to afford premiums.

Healthcare economists gave varying estimates on how much they expect MediShield Life premiums to increase.

Singapore Management University’s associate professor of economics Kim Seonghoon said that taking into account factors like healthcare cost inflation and the ageing population, he expects the premium to rise by around 20 per cent to 30 per cent.

Meanwhile, Prof Wee said given that the scope of change this time is more limited compared with the last premium adjustment in 2020, she anticipates that the premium would rise by about 10 per cent to 15 per cent.

In 2020, changes to MediShield Life included raising the policy year claim limit from $100,000 to $150,000 and introducing higher claim limits for daily ward and treatment charges for the first two days of acute hospital stay. Premiums jumped by 25 per cent on average then.

Prof Lim said it is unlikely that annual premiums would rise by more than 20 per cent to 25 per cent or more than $100 or so for any age band, and premium increases may be phased in to help Singaporeans cope with the rise.

The experts added that it remains to be seen how the changes to MediShield Life will affect premiums for Integrated Shield Plans (IPs). IPs, which are offered by seven private insurance firms here, provide additional coverage beyond what is covered under MediShield Life.

Prof Kim said if MediShield Life becomes more attractive, it is possible that people with a relatively low health risk might ditch IPs and keep only MediShield Life.

“If this is the case, the remaining pool of IP holders is likely to have higher average costs and, thus, the insurance companies will respond to this change by further raising the insurance premium,” he said.

If MediShield Life picks up a larger chunk of total healthcare bills via expanded claim limits, the insurance companies operating IPs may have larger profits, which leaves room for lowering the IP premium, he said.

“Hence, the net impact will be determined by the relative magnitude of those two forces. However, I doubt that insurance companies will adjust IP premiums downwards,” said Prof Kim.

The Life Insurance Association Singapore’s executive director Chan Wai Kit said the insurance industry is prudent in periodically reviewing benefit levels and premiums.

For instance, IP insurers have not increased premiums since 2022 as part of measures to provide additional support for such policyholders amid implementation of the Cancer Drug List. Insurers will monitor claims and adjust premiums only from September 2024, said Mr Chan.

“As an industry, we remain committed to collaborating with government agencies and the medical fraternity to ensure the continued accessibility of medically necessary treatments. IP insurers will work closely with the Ministry of Health to ensure appropriateness of claims, and also strongly encourage patients and medical practitioners to play their part in ensuring that only necessary treatments are pursued,” he added.