By Lorna Tan and Shawn Lee
If you’ve only got a minute:
- Integrated Shield Plan rider premiums have increased significantly, with those for private hospitals growing at an average of 17.2% annually in the last three years.
- From April, new IP riders sold must follow a stricter cost-sharing framework which aims to encourage prudent use of healthcare services.
- Insurers are not allowed to sell new IP riders that cover a patient's deductible and Co-payment cap is raised to a minimum of SGD6,000 per policy year.
This article was first published in The Business Times.
The landscape for hospitalisation Integrated Shield plan (IP) riders is shifting significantly. Since the start of April, new IP riders sold must follow a stricter cost-sharing framework which aims to encourage prudent use of healthcare services.
To recap, IP riders are optional cash-only add-ons designed to cover out-of-pocket components – the deductible and co-insurance – of a hospital bill, that a standard IP does not pay.
The deductible is the fixed amount - S$1,500 for a Class C ward and up to S$3,500 for a Private or Class A ward - payable by you per policy year before the insurance kicks in. The co-payment is the percentage of the remaining bill you share with the insurer. This is typically 5 per cent of the remaining bill, capped at a fixed amount per policy year.
For those who are holding on to IP riders that are unaffected by the new rider design, the deductible component of the hospital bill is covered and the co-payment is capped at S$3,000 per policy year, subject to terms and conditions such as adhering to the insurer’s panel of doctors.
Such an IP design has led to some patients over consuming healthcare services and certain doctors over prescribing and potentially over charging tests and treatments, resulting in a "buffet syndrome".
As such, IP claims have been driven higher which led insurers to raise premiums. Over the past three years, IP rider premiums for private hospitals have grown at an average of 17.2 per cent annually. The most expensive lifetime IP premiums with riders can exceed S$800,000, excluding premiums for MediShield Life.
To arrest this vicious cycle of escalating healthcare costs and premiums, new requirements for IP riders took place this month.
New requirements from April 1
Insurers are not allowed to sell new IP riders that cover a patient's deductible.
The co-payment cap is raised to a minimum of S$6,000 per policy year to keep pace with bill sizes that have increased over time. Having more skin in the game will likely make you think twice about over consuming medical services.
Since the new IP rider covers less, the premium is expected to drop by about 30 per cent lower on average, compared to existing riders offering more coverage.
Impact of new riders
Going forward, you may need to tap more on your CPF MediSave account to cover a larger share of your hospitalisation bill.
That said, Ministry of Health projects that 60 per cent of rider claimants should not need to pay any cash out-of-pocket after MediSave. Of the remaining 40 per cent who do face cash out-of-pocket costs, the majority would pay S$1,000 or less, and practically all would pay S$3,000 or less.
While out-of-pocket costs may increase, the changes are expected to translate to average annual premium savings of around S$600 for private hospital IP rider policyholders and around S$200 for public hospital rider policyholders. Older policyholders stand to enjoy greater premium savings.
Transition for existing policyholders
- Bought IP rider before November 27, 2025: Your current coverage remains in place for now though insurers may eventually transition these plans later. Monitor for updates from your insurer. You may switch to the new riders launched from April 2026 without additional underwriting, provided they offer similar or lower benefits.
- Bought between November 27, 2025 and March 31, 2026: These plans will be automatically transition to the new compliant rider at your next policy renewal after April 1, 2028.
Given these changes, it is an opportune time to review your health insurance coverage. Here are some considerations.
1. Understand your healthcare preference: This includes your choice of ward, access to preferred doctors, and potential wait time differences between public and private hospitals.
2. Consider your insurance preference: Assess whether a new IP rider better suits your needs and long-term affordability. Riders can provide coverage for treatments not on the Cancer Drug List (CDL) and extend coverage during pre- and post-hospitalisation periods.
3. Stick to an affordable budget: Assess your current and future affordability, as premiums for IPs and riders can rise significantly as you age.
4. Build adequate emergency funds: Set aside at least 3 to 6 months of monthly expenses, as the new changes will require higher out-of-pocket costs in the event of hospitalisation.
5. Check if your employer’s group medical insurance can plug the gap for the deductible component: Many corporate plans cover these costs even if your personal IP rider no longer does.
6. Consider switching insurers only if you are in good health with no medical history: Wait until your new plan is approved before terminating your existing coverage. Your coverage will be automatically ported to the new insurer, and any unused premiums from your existing insurer will be refunded upon switching.
7. Think carefully before cancelling or downgrading your rider: Any future addition or upgrade of riders will require medical underwriting.
8. Review your medical insurance and premiums annually: This is because IPs and the riders are subject to changes.
Over time, the new rider design should help moderate overall healthcare costs and break the current spiral of rising bills and escalating premiums, returning health insurance to its core purpose while protecting you against significant healthcare expenses.
By understanding these changes, you will be better placed to make informed decisions and enjoy greater peace of mind, knowing you are financially prepared for any healthcare episode.
