A STUDY OF THE PRIVATE HEALTH INSURANCE IN SINGAPORE

Abstract

The subject of healthcare financing has always been a hotly debated issue in many developed and developing count1ies. In Singapore, the common problems associated with most of the healthcare financing system in developed countries have been successfully kept under control with its effective healthcare financing system revolving around Medisave, MediShield and Medifund, or commonly know as the 3Ms. Nonetheless, there exists lingering concern about the sufficiency of healthcare coverage for the average Singaporeans. It was noted that private health insurance is an attractive solution but the government is conservative about the development of private health insurance as a means of healthcare financing due to the pitfalls that are like to follow. Hence, this thesis attempts to provide an in-depth study of the private health insurance market in Singapore. It was found that the industry offers a wide range of products. Each of these health insurance product helps patients ease the financial burden in the event of a illness in different way but not every one of them is equally desirable. In addition, the product features are studied. It was found that although cost sharing mechanisms are not commonly adopted in the market, there is generally other fom1s of measures to prevent abusive insurance utilisation. In the trend analysis, local private health insurance sector exhibited potential of strong growth. Nevertheless, there should be constant monitoring is sti11 needed to keep its development in the right track as there exists subtle hints of moral hazard problem, especially in the group segment. Hence the government is right in taking a cautious approach for extending the role of private health insurance in Singapore. It was recommended that private health insurance should be promoted as a means to help Singaporeans defray medical expenses so that they build up their Medisave or personal savings in preparation for healthcare in the old age. Before this is done, the general public has to be educated on the correct use of private health insurance and the 3Ms system.