Summary of Changes to the Integrated Shield Plan

The following is an edited version of what I wrote to my clients a few months back to explain changes to the Integrated Shield plan.

I understand that there has been some anxiety regarding the proposed changes to the integrated shield hospitalisation plans by the Singapore government in consultation with the six major insurers to address spiraling costs and the subsequent increase in premiums.  As you would have no doubt noticed, there gave been some increase in your annual premium.  The following is an explanation from AIA’s perspective and how it affects you. 

What are the new guidelines from Ministry of Health (MOH) about?

In accordance with the MOH’s guidelines announced on the 07^th March 2018, all integrated plan riders available for sale from the 01^st April 2019 are to incorporate both co-payment and co-payment cap, and will no longer cover 100% of the deductibles and co-insurance of integrated plans moving forward.

Why is this necessary?

Aligned with the recommendations from the Health Insurance Task Force (HITF), these changes encourage everyone to play a more active role in managing their medical care costs, and are part of collective efforts to ensure that healthcare and health insurance remain available and affordable in Singapore.

What is a co-payment feature?

With a co-payment feature, policyholders will need to pay out-of-pocket of a minimum of 5% or more on their hospitalisation, outpatient treatment as well as day surgery bills, net of any rider cash benefit payout.  This means the integrated plan and rider will no longer cover 100% of the bills.

What is a co-payment cap feature?

The aim of the co-payment cap feature is to protect policyholders against large bills by limiting the out-of-pocket amount we have to pay per policy year if we seek treatment from one of our insurer’s preferred healthcare providers or if the treatment has been pre-authorised by our insurer.  The minimum co-payment cap insurers can apply is S$3,000.

How do these changes affect the existing AIA Max Essential Rider?

Riders purchased before 08^th March 2018:

Those with riders purchased before the 08^th March will continue to enjoy the current benefits under their existing AIA Max Essential rider.

AIA will continue to monitor and review the claims experience from time to time, and should there be a need to incorporate the co-payment and co-payment cap features, please be assured that AIA will inform the client on any changes affecting their coverage at least 31 days prior to the change taking effect.

Riders purchased from 08^th March 2018 up to the date on which AIA introduces the new riders based on the new guidelines:

Those with riders purchased from the 08^th March will continue to enjoy the current benefits under their existing AIA Max Essential rider.  However, in accordance with the Ministry of Health guidelines, their AIA Max Essential rider will be revised to incorporate both the co-payment and co-payment cap features, upon you’re their A Max Essential rider renewal from 01^st April 2021.

Please be assured that AIA will reach out to inform the client on any changes affecting their coverage at least 31 days prior to the change taking effect.

How do these changes affect any reinstatement or upgrading of existing AIA Max Essential Rider; or any Mid-Term add of AIA Max Essential Rider?

Upgrading/ mid-term addition or reinstatement request before 08^th March 2018:

The AIA Max Essential rider will be based on the current benefits.

AIA will continue to monitor and review the claims experience from time to time, and should there be a need to incorporate the co-payment and co-payment cap features, please be assured that AIA will inform the client on any changes affecting their coverage at least 31 days prior to the change taking effect.

Upgrading / mid-term addition request from 08^th March 2018 up to the date on which AIA introduces the new riders based on the new guidelines:

The AIA Max Essential rider will be based on the current benefits up to renewal from the 01th April 2021, upon which date co-payment and co-payment cap features will apply.

Please be assured that AIA will reach out to inform clients on any changes affecting their coverage at least 31 days prior to the change taking effect.

How do these changes affect any Downgrade of existing AIA Max Essential Rider?

Downgrading of AIA Max Essential is not considered as a new business, hence the downgraded AIA Max Essential rider will be based on the current benefits.

AIA will continue to monitor and review the claims experience from time to time, and should there be a need to incorporate the co-payment and co-payment cap features, please be assured that AIA will inform the client on any changes affecting their coverage at least 31 days prior to the change taking effect.

Does AIA Singapore do pre-authorisation?

Yes.  In 2017, AIA launched the AIA pre-authorisation service for AIA policyholders who are insured with AIA HealthShield Gold Max A and AIA Max Essential A or AIA Max Essential A Saver.

Pre-authorisation assesses prospective claims based on diagnosis, planned procedures, the estimated length of hospital stay and hospitalisation and surgical charges before the actual surgery or admission.  This currently applies to inpatient admissions at Mount Alvernia, Gleneagles Hospital and Thomson Medical Centre, or any day surgeries performed with a clinic under the AIA Quality Healthcare partners and we will be continuously reviewing this.

Prior to the planned surgeries or hospital admissions, our specialist partners and customers will need to submit the pre-authorisation form for AIA’s review.  A Letter of Guarantee (LOG) with the approved amount will be issued within about 3 working days to the participating hospitals or clinics.

Will there be a reduction of premium since the benefits are reduced?  How much impact would the changes have on claims management and insurance premiums?

In general, premium rates are adjusted from time to time based on the client’s age, individual insurers’ claims experience, medical inflation, as well as general cost of treatment, supplies and medical services in Singapore.  These rates are, therefore, not guaranteed.  The measures proposed by the HITF are introduced with the long-term purpose of ensuring sustainable access to quality healthcare.  The impact of these changes may take some time to realise.  However, we believe that in the long run, alongside our efforts to ensure quality healthcare is delivered to our customers and that these measures will benefit them in managing the level of claims inflation, and, therefore, moderating the level of integrated plan and rider premium increases each year.

It appears that riders are “guaranteed renewal”.  How does the rider policy contract permit AIA Singapore to make changes to my existing rider?

The AIA HealthShield Gold Max and Max Essential riders are guaranteed renewable in nature.  This means that AIA will not terminate the plan at any time, except when there is fraud.  However, given the evolving medical landscape, continuously changing healthcare landscape, it is common for health insurers to vary the premiums, benefits and / or cover or amend any privilege, term or condition of health insurance policies.  Please be assured that AIA will inform policyholders on any changes to their policies, at least 31 days via letter before the effective date of any changes.

How can I be assured that AIA Singapore’s doctor panel will have a sufficient spread of doctors, and uphold good quality of care?

In January 2017, AIA introduced AIA Preferred Healthcare Providers, a network of over 250 trusted, well-qualified and experienced medical professionals.  AIA is the first insurer to establish direct partnerships with the medical community to deliver quality, affordable healthcare together.

AIA Healthcare Partners (private specialists) are chosen based on a strict review on the following criteria:

a.         Minimum of 5 years of specialist experience;

b.         Professional track record;

c.         Claims History;

d.         Appropriate choice of treatment; and

e.         Consistent charging behaviour.

AIA Preferred Healthcare Providers collectively cover over 26 medical specialties, ensuring that our clientele will be able to find a doctor with the expertise needed.  You can view the full list here: AIA Specialist List.

Does AIA Singapore think these changes are sufficient to manage claims?  If not, what else will AIA Singapore be doing?

AIA Singapore continues to work together with all stakeholders in the industry, including MOH and the Life Insurance Association of Singapore (LIA Singapore), to manage healthcare and claims costs in Singapore.  Together, we believe that we can be effective in ensuring quality healthcare is delivered to our customers and managing claims costs to keep health insurance affordable and accessible for all in Singapore.

As an industry leader, AIA Singapore is committed to proactively playing our part to implement the HITF recommendations, including:

a. Establishing a network of AIA Quality Healthcare Partners, making us the first insurer to establish direct partnerships with the medical community to ensure quality, affordable healthcare is delivered to our members;

b. Launching AIA Max Essential A Saver, an alternative rider option for AIA HealthShield Gold Max A policyholders seeking affordable coverage for treatments specifically in Government / Restructured Hospitals, or with any of our AIA Quality Healthcare Partners;

c. Introducing our AIA pre-authorisation service which provides a fuss-free process for pre-approval of treatments for AIA policyholders covered under AIA HealthShield Gold Max A integrated shield plan and AIA Max Essential A or AIA Max Essential A Saver riders; and

d. Beyond the HITF recommendations, AIA are also constantly enhancing our pioneering AIA Vitality wellness programme which inspires individuals to take action and make real change to their health by rewarding them for the small steps they take to become healthier every day.