What is the accumulated surplus in MediShield?

March 31, 2012

I refer to the increase in MediShield premiums.

Claims grew faster than premiums?

One of the reasons given for the increase was that between 2008 and 2011, the MediShield scheme paid out 21 per cent more in claims each year, while premiums grew by only 10 per cent each year.

The above statistic is but just one of various statistics that may be taken into account for the financing of national healthcare insurance schemes.

Other statistics which we need to know are the ratio of claims to premiums (not the growth in claims over premiums), the accumulated surplus in the MediShield scheme, the accumulated interest on MediShield funds, etc.

$131m more in premiums than claims?

For example, it was disclosed in Parliament recently that between 2006 and 2010, MediShield collected an average of $131 million more in premiums each year than it paid out in claims.

As I understand that most countries’ national healthcare insurance schemes are funded on a break-even basis, why is our MediShield accumulating huge surpluses? The consistent rhetoric that the MediShield scheme is not for profit, should be backed up by more disclosure of MediShield’s financial statements.

Medisave top-ups pay for premium increase?

As to the one-time Medisave top-up announced in the recent Budget to help cushion the impact of the premium increase, and older policyholders who are beyond the re-employment age of 65 will receive direct and long-term assistance via Medisave top-ups under the GST voucher scheme of up to $37.50 per month which can offset the premium increase in full. I would like to point out that Medisave top-ups may not necessarily be used to pay increased MediShield premiums as they may be instantly wiped out by medical bills or past bills in arrears.

Medifund surplus to protected reserves?

Also, instead of transferring the $86 million Medifund surpluses over the last three elections to the protected reserves, why not transfer this to the MediShield fund instead?

This may negate the need to increase premiums by so much now.

MediShield accounts should be made public?

I would also like to suggest that the financial statements and accounts for MediShield be made public.

.

Alex Lew
Leong Sze Hian

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About the Author

Leong
Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.