A major change in coverage for cancer treatment kicked in from 1 April 2023, transforming how private insurers cover cancer treatment costs. Instead of covering “as-charged”, Integrated Shield Plans (IPs) from private insurers come with an upper coverage limit and only subsidise treatments on the Cancer Drug List (CDL) for outpatient cancer treatments.
This policy amendment will be applicable to all policyholders upon the renewal of their IP contract, which for the majority, was on 1 April 2023. Patients currently undergoing cancer treatment will receive a six-month extension on their existing coverage to enable them to complete their treatment regimen.
What are the changes?
|IPs coverage before changes
IPs’ coverage after changes
|MediShield Life has a limit of S$3,000 in total for cancer drugs and services, and IPs pay the rest after the patient’s co-payment.
IPs will cover five times MediShield Life’s limit of S$200 – S$9,600 per month for cancer drugs and S$3,600 annually for cancer services.
|MediShield Life’s claim limit has minimal effect on out-of-pocket expenses for patients with IPs.
Patients with IPs might have to pay out-of-pocket for cancer treatments.
|IPs covered drugs and treatments not on the CDL.
IPs cover only drugs and treatments on the CDL.
Prior to the change, patients will pay for a deductible and a certain percentage of co-payment while IPs will cover the rest of the outpatient cancer drug treatments “as charged”.
With the recent changes, private insurers will only pay up to a maximum of five times the amount of coverage that the basic MediShield Life does. The maximum coverage limit will be enforced across all plans, regardless of whether it is public sector B1, A class wards, or private sector healthcare.
Previously, IPs also provided coverage for cancer drugs that are not on the CDL. From 1 April 2023, private insurers only cover treatments that are listed on the CDL. According to the Ministry of Health, more than 90% of Health Sciences Authority-approved cancer treatments are already on the CDL.
The MediShield Life claim limit for cancer drug services has also been increased from S$1,200 to S$3,600 per calendar year from 1 April. Mr Ong Ye Kung, Singapore’s Minister for Health, had shared that the increase in claim limit is a reflection of feedback that “the MediShield Life claim limit may not be adequate for some patients” and the authorities have “therefore reviewed the limits and have decided to increase it.”
Main reason for policy changes
According to Singapore General Hospital, the cost of cancer treatment increases 20% year-on-year. Restricting coverage to only drugs on the CDL helps Singapore to curb the rising costs as only treatments that are proven to work and are of value will be allowed on the list.
Prior to 1 September 2022, MediShield Life provided coverage of up to S$3,000 per month for all cancer drugs and services. IPs frequently cover costs exceeding this limit on an as-charged basis with a minor co-payment from patients. This approach resulted in a scenario where pharmaceutical companies lacked the motivation to reduce their pricing for less expensive drug treatments.
Consequently, Singapore incurred comparatively higher expenses for many cancer drugs in contrast to other nations. The financing modifications allow Singapore to bargain for reduced prices, thereby guaranteeing that cancer treatment expenditures and insurance premiums remain economically viable for Singaporeans in the long run.
While the change in September 2022 only affects those paying with their MediShield Life and Medisave, the price of drugs procured by the public sector has fallen by approximately 30% across the board. With the new financing methods for IPs kicking in from April 2023, cancer drugs procured by the private sector could potentially also see a dip in prices.
Potential implications of the new changes
Cancer is the leading cause of death in Singapore. According to a report by the Health Promotion Board, it is estimated that 22.66% of men (almost 1 in 4) and 22.03% (about 1 in 5) of women would develop cancer by age 75. With cancer treatment costs on the rise constantly, changes to cost financing options are inevitable. The Singapore government stepping in to curb the rising prices allows authorities “to negotiate lower prices for cancer drugs, and ensure that cancer treatment costs and insurance premiums remain affordable for Singaporeans in the long term.”
However, these changes can potentially greatly impact cancer patients’ care options and out-of-pocket expenses. Patients whose cancer spread beyond the original site or whose cases are more complicated could face a bill shock, given that even a coverage that is five times the MediShield Life limits would not be able to cover their outpatient bills.
One oncologist said the “MediShield Life coverage of drugs is based on the heavily subsidised prices at public hospitals. Five times that might not be enough as the private sector is not able to buy such medicines at the same price as public institutions, which purchase collectively in large amounts.”
Another potential implication arising from the changes would be more cancer patients being admitted to the hospital to ensure their treatments are covered. With inpatient cancer treatments being subsidised as charged by IPs, this could be a possible way for cancer patients to minimise their out-of-pocket expenses. However, doing this would undoubtedly put a strain on the healthcare system, taking up resources and manpower away from those who need it more.
What are private insurers offering?
The IPs insurers have collectively extended coverage for cancer treatments that are not on the CDL through benefits provided by the rider component of their policies. This will offer individuals who opt for wider coverage the flexibility to do so, albeit at an additional cost. It is important to note that the rider component is only payable through cash and cannot be funded via MediSave.
Not only are drugs not on CDL being subsidised, but private insurers are also promising 15-20 times MediShield Life’s limits with their riders.
AIA’s Max A Cancer Care Booster promises 16 times MediShield Life’s monthly limit for cancer drugs on CDL, 10 times MediShield Life’s annual limit for cancer services, and S$200,000 for non-CDL cancer drug treatments annually.
Great Eastern’s GREAT TotalCare offers 18 times the monthly limit for cancer drugs on CDL, as charged for cancer services, and S$150,000 – S$250,000 (dependent on policy type) for non-CDL cancer drug treatments annually.
Meanwhile, Prudential’s PRUShield with PRUShield and PRUExtra have up to 20 times the limit for cancer drugs on CDL and cancer services, and S$150,000 per year with PRUExtra for non-CDL cancer drug treatments annually.
Upon a cancer diagnosis, the immediate concern for an individual is usually the financial burden associated with treatment costs, rather than concerns about their health.
Medical insurance is meant to cushion hefty medical bills and allow patients to recover without needing to worry about costs. While it is important to curb the rising cancer drugs and treatment costs, it would be pointless if insurance policies are unable to help patients foot their medical bills.
With the new changes in IPs’ coverage, this might be a good time for you to check on your medical insurance and the riders you have. If you need more information about medical insurance and various riders, feel free to reach out to the Planner Bee team at firstname.lastname@example.org.