How Integrated Shield Plans’ downgrade from as charged to 5X of Medishield Life’s limit for cancer treatments affect you

Last month, I came across news that drugs on the Cancer Drug List will be covered by MediShield Life (‘MSL’) at a maximum range of $200 to $9,600 per month, depending on the type of drug. More critically, Integrated Shield Plans (‘ISP’)’s coverage for the same drugs will be set at 5 times that of MediShield Life’s, i.e. $1,000 to $48,000 per month. These are part of the 2^nd phase of Ministry of Health (‘MOH’)’s plan to slow the increasing cost of cancer treatments in Singapore’s hospitals.

To me, this is a big development but one that probably hasn’t caught the attention of most Singaporeans just yet. Unfortunately, if the policyholders only find out when they need their insurance policies which is at the point of seeking treatment, it might be too late to take any mitigating action then. Therefore, I spend time to perform a deep dive and understand the key changes under Phase 2. Now that Integrated Shield Plans have been adjusted from “as charged” to just 5 times of MediShield Life’s limit for approved cancer treatment plans, let’s find out how everyone would be affected.

Basics of MediShield Life, Integrated Shield Plans and Riders

Since there is quite a lot to cover, I will priortise content pertaining to the subject topic. As some first-time readers may find this article too technical and even confusing, you may start off by understanding the basics from previous articles that I have written:

• Understand MSL and ISP’s structure and coverage
• How does a rider added to a ISP work?

Without further ado, let us understand the key changes to your cancer treatment plans after this round of government’s intervention.

Key Changes To Your Cancer Treatment Plans After 1 Apr 2023

1) Limits to your MSL and ISP coverage

As aforementioned in my first paragraph, MOH had placed limits to how much your MSL and ISP will pay for the cost of your cancer drug. To understand the impact of these limits, I thought it is apt to show a before and after scenario as shown in Diagram 1.

Let us assume that the cost of this specific cancer drug is $80,000 per month. Before 1 April 2023, MOH allowed a maximum of $3,000 per month and a no claim limit to be claimed for all types of cancer drugs from the MSL and ISP respectively. After 1 April 2023, MOH will start to place limits ranging from $200 to $9,600 per month depending on the type of cancer drug. More importantly, the limits for ISP’s claim is set at 5 times that of MSL’s.

With this change, an ISP policyholder with no rider goes from paying just the deductible and co-insurance to paying these PLUS any excess not covered by the ISP. In my example, the out-of-pocket payment ballooned from $11,150 to $32,000 per month. On a monthly basis, that is a significant increase in the bill size especially if the drug is meant to be recurring or consumed for a long term.

Of course, I admitted that I may have used a simplified way of presenting the costs to aid the layman in understanding the magnitude of the changes. But I think this is the easiest way to get the message across to more people- your cancer bill can increase exponentially if you have no rider.

2) Cancer services are differentiated against cancer drugs as part of cancer treatment

Previously, there was no differentiation between cancer services and cancer drugs when it comes to coverage by both MSL and ISP. Post 1 April 2023, MOH have differentiated between the two by placing different claim limits. Let us understand how each segment is defined.

• Cancer Drugs: Drugs that have been clinically proven to be effective as well as provide value for money are included on the Cancer Drug List. About 90% of current drug treatments used in the public sector have been approved to be included on the Cancer Drug List by Health Sciences Authority. That also means that 10% of current drug treatments will no longer be covered by MSL and ISP going forward.
• Cancer Services: Services that might be incurred over the course of one’s cancer drug treatment, such as lab investigations (scans, blood tests), doctor consultations and supportive care drugs.

Since I have already explained the new limits placed on Cancer Drugs in Diagram 1, readers should note that the MediShield Life claim limit for Cancer Services is set at $3,600 per calendar year. ISP limits for Cancer Services range from 2 to 5 times that of MSL’s limit, depending on your insurance provider.

Applying the same methodology in Diagram 1, moving from “as-charged” to a claim limit of just $3,600 per calendar year is likely to see an ISP policyholder with no rider incurring more out-of-pocket costs when seeking cancer treatments.

3) Number of cancer drugs used per treatment

Another change is the claim limits applied when more than 1 cancer drug is used per treatment. If the drugs involved are not assessed to be cost-effective enough to be deemed as a combination treatment, only the limit of the most expensive drug will be taken into consideration. It WILL NOT be an aggregate of all the drugs’ individual limits.

Pardon me on how awkward this sounds, but if there is any oncologist who can help me with a better sentence structuring, do let me know.

Common misperceptions and misunderstandings

When I first came across the announcement, I found the changes all too confusing and simply skipped it. I can only imagine that if it is confusing for a financial blogger, it will be very difficult for the layman to grasp the changes. It was only after some articles and conversations with insiders that I became more enlightened. During the process, I also uncovered some common misperceptions and misunderstandings which could prove potentially financially ruinous. Here are just some examples.

A) I already have an Integrated Shield Plan bought before 1 April 2023, so this change does not affect me

Wrong. That is because ISP are structured to be renewed annually. It will impact all existing ISP policyholders from the time they renew their ISP. The renewal date depends on individual’s ISP commencement date. In other words, there is no running away from this change.

B) I have a rider on top of my ISP, therefore I will continue to enjoy coverage on a “as-charged” basis for approved cancer treatments

Wrong. As part of the change, riders have also changed from “as charged” to be capped at X times of MediShield Life’s limit. Why I use X is because coverage is not identical across the 7 insurers approved to sell ISP. For instance, AIA is providing a separate rider for outpatient cancer benefits with the AIA Max A Cancer Care Booster. This rider offers 16X the MSL limit per month for CDL drugs, on top of the usual 5X limit offered by the base plan (ISP). This aggregates the total coverage to 21 times the annual limit which should cover the majority of bill sizes.

C) I will never be covered for cancer drugs not on the Cancer Drug List

Some riders DO provide coverage for drugs not on the Cancer Drug List. For example, Great Eastern’s rider offers up to $250,000 per year for treatment on cancer drugs not on the approved list. Singlife came up with a Singlife Cancer Cover Plus which is a standalone plan that provides a high annual coverage limit of up to $1.5million, in excess of the deductible.

Conclusion

These are just 3 of many misconceptions that I can think of. As an ISP policyholder, I cant helped but feel that the goalpost keeps shifting. At the same time, my heart sinks whenever I receive the premium letter for my ISP. Therefore, I recognise that I cannot have the best of both worlds and something got to give to ensure that cancer treatments and insurance premiums affordable in the longer term.

Disclaimer: I am not a licensed financial advisor and should you need advice, you may speak to a licensed financial advisor whom I work with and trust.

This article is published on 23 April 2023

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