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Reasons and Factors – Rising Premiums for our Integrated Shield Plan, and how does it affect us?

Many policy members receiving their Integrated Shield Plans policy renewal this year has been seeing increments in premiums.

There are several interconnected reasons why Integrated Shield Plans (ISPs) are experiencing steep premium increments in Singapore in 2025:

  1. MediShield Life Enhancements (Effective April 2025):
    • Increased Coverage and Claim Limits: MediShield Life, the basic national health insurance scheme, has undergone a comprehensive review, leading to significantly enhanced coverage and higher claim limits across various areas (e.g., daily ward limits, annual claim limits, outpatient treatments, high-cost therapies).
    • “Knock-on” Effect on IPs: Since ISPs are built on top of MediShield Life, an increase in MediShield Life’s coverage means the base component of the ISP premium (the MediShield Life portion) will increase. While ISPs provide coverage beyond MediShield Life, the fundamental uplift in the national scheme meant adjustments in the overall premium structure.
    • Increased Inpatient Deductible: To help manage the overall premium increases for MediShield Life, the inpatient deductible is also increasing. This can indirectly influence the private component of ISPs as well.
  2. Rising Healthcare Costs (Medical Inflation):
    • General Inflation: Singapore, like many other countries, is experiencing significant medical inflation. This refers to the rate at which medical costs (e.g., doctors’ fees, hospital charges, cost of drugs, medical technology, staff salaries) are rising. Projections indicate medical insurance costs in Singapore could rise by 12% in 2025.
    • Advanced Medical Technology and Treatments: Innovations in medical technology and the availability of new, often more expensive, treatments and diagnostic tools contribute to higher healthcare costs. While these advancements improve patient outcomes, they come at a higher price.
    • Increased Utilisation of Healthcare Services: With an aging population and increased awareness, there’s a higher demand for and frequency of healthcare claims. This higher utilization directly impacts insurers’ payout obligations.
    • Over-consumption/Over-servicing: Some sources suggest that “overly generous” insurance policies (especially those with very low out-of-pocket expenses for policyholders through riders) can lead to higher and even excessive consumption of medical services, which drives up overall healthcare costs for everyone.
  3. Insurers’ Commercial and Actuarial Considerations:
    • Claims Experience: Insurers adjust premiums based on their claims experience. There have been reports of significant increases in overall IP claims costs in the first half of 2024 compared to the previous year.
    • “Premium Freeze” Lifted: The Life Insurance Association (LIA) had previously implemented a “premium freeze” for some IP plans, which ended on August 31, 2024. With this freeze lifted, insurers have adjusted their premiums to reflect the actual cost trends and claims.
    • Age-related Increases: As policyholders age, the likelihood of needing medical care increases, naturally leading to higher premiums in older age bands.
    • Riders: While riders provide additional benefits (often reducing out-of-pocket expenses to 5% or a low cap), they have also been identified as a significant driver of rising healthcare costs and, consequently, steeper premium increases.

In essence, the steep premium increments for ISPs in 2025 are a confluence of necessary adjustments to the base MediShield Life scheme, the escalating cost of healthcare services due to inflation and medical advancements, and insurers’ need to manage claims and maintain financial viability.

There are certainly ways to manage the premiums increments, such as changing and downgrade our plans benefit, however, this would mean compromising and lowering benefits in exchange for certain reduction in premiums. I discuss downgrading of medical plans in this article (link HERE).

For those who have allowance on budget, it is crucial to see if you can ride thorough these phases of premiums adjustments – until we see any positive drivers and change implementation from governmental agencies pushing for sustainability and affordability.

Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek unbiased financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.

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Judy Lang

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Hi there! I’m Judy Lang from Financial Alliance, a quality and innovative financial advisory firm in Singapore. With over ten years in the field, I specialize in international medical insurance, investment advice, retirement planning, and comprehensive financial planning.

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根据《个人数据保护法》，鑫盟理财私人有限公司征求您的同意向您收集并使用您的个人信息。鑫盟理财将根据公司的个人数据保护政策所阐述的用途使用您的个人资料（例如姓名，证件号码，联系电话，邮寄地址，电邮地址和照片）。 该政策可在本公司网站上查寻，网址为 https://fa.com.sg/data-protection-policy/.

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  • 鑫盟理财私人有限公司的代表或员工并未直接与我联系或提出要约或招揽购买我原居住国境内所不提供的任何金融产品.
  • Financial Alliance Pte Ltd ( “FAPL”) is licensed by the Monetary Authority of Singapore (“MAS”) and allowed to conduct financial advisory activities in accordance with the Financial Advisers Act (Cap. 110) (“FAA”) and the Securities & Futures Act (Cap. 289) (“SFA”) within the jurisdiction of the Republic of Singapore and in accordance with the licenses granted by MAS
  • 鑫盟理财私人有限公司( “鑫盟理财”)持有由新加坡金融管理局(“MAS”)所颁发的牌照，并许可在新加坡共和国境内依据财务顾问法（第110章）和证券与期货交易法（第289章）进行财务咨询等相关业务
  • Any services provided by FAPL to persons not ordinarily resident in Singapore are provided solely on an offshore basis from Singapore, resulting from direct enquiry on the part of the foreign residents.
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  • As an integral part of the provision of such services, FAPL may from time to time make available to such residents, documents and information making reference to capital markets products (for example, in connection with the provision of fund management or investment advisory services outside of the foreign jurisdiction).
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  • Such documents and information are provided by Financial Alliance Pte Ltd (“FAPL”) is for general information only and is not intended for anyone other than the recipient.
  • 此类由鑫盟理财所提供的文件和信息仅供收件人做一般信息参考。
  • It does not take into account the specific investment objectives, financial situation or particular needs of any particular person.
  • 此类文件和信息不会把-个人投资目标，财务状况或其特定需求等考虑在内。
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  • 鑫盟理财向该人士提供此类文件和信息将不构成要约或招揽购买或出售或认购任何此类资本市场产品，或达成交易或参与任何特定的投资策略，也不构成有关此类金融产品的建议或推荐。
  • These documents may not be published, circulated, reproduced or distributed in whole or in part to any other person without FAPL’s prior written consent.
  • 未经鑫盟理财的事先书面同意，不得将这些文件全文或部分发布，传播，复制或分发给其他人。
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  • You shall ensure that you have and will continue to be fully compliant with all applicable laws in your home country when entering into discussion or contracts with FAPL.
  • 在与鑫盟理财进行讨论或签订合约时，您应确保您已完全遵守并将继续遵守您所在原居住国的所有适用法律及条规。

In compliance with the Personal Data Protection Act, Financial Alliance Pte Ltd (“FAPL”) seek your consent to collect and use your personal data (e.g. name, NRIC, contact numbers, mailing addresses, email addresses and photograph) for the purposes of and in accordance with FAPL’s Data Protection Policy, which can be found on FAPL’s website at https://fa.com.sg/data-protection-policy/.

根据《个人数据保护法》，鑫盟理财私人有限公司征求您的同意向您收集并使用您的个人信息。鑫盟理财将根据公司的个人数据保护政策所阐述的用途使用您的个人资料（例如姓名，证件号码，联系电话，邮寄地址，电邮地址和照片）。 该政策可在本公司网站上查寻，网址为 https://fa.com.sg/data-protection-policy/.

By submitting this form, you are deemed to have read and understood FAPL’s Personal Data Policy.

提交此表格，即表示您已阅读并理解鑫盟理财私人有限公司的个人数据政策