askST: Do I need a rider with changes to cancer insurance?

By Salma Khalik
Senior Health Correspondent

Changes to how cancer treatment is financed for private patients with Integrated Shield plans (IPs) kicked in on April 1. Senior health correspondent Salma Khalik looks at how this will affect patients with IPs.

Q: What exactly has changed?

A: There are several changes. Cancer treatment is no longer covered “as charged” in the way it was covered by all IP plans that are still being sold. (A few plans are no longer sold but were being maintained for people who were already on them. But they offer lower coverage.).

Another change is the split between cancer drugs and cancer services (which include everything else, such as doctor’s consultation fee, laboratory tests, scans and other medicines that might be needed for conditions such as nausea or infection). Each has its own cap.

The MediShield Life (MSL) cap for drugs is $200 to $9,600 a month depending on treatment, and for services, it is $3,600 a year.

The sort of drugs and treatments that IPs can cover are also clearly spelt out. IPs can pay only for drugs and treatments that are on the Cancer Drug List (CDL). These represent about 90 per cent of drugs and treatments approved for use here by the regulator, the Health Sciences Authority (HSA).

The remaining 10 per cent of approved drugs and treatments cannot be covered by IPs. The reason is either they have not been clinically proven to be effective, or the price at which they are sold is not value for money.

Patients who require more than one cancer drug can claim against insurance up to the limit for the highest-cost drug, unless all the drugs used are listed together as a combination treatment on the CDL. Previously, all drugs could be paid for with insurance.

Q: That’s too complicated. Just tell me if my IP will fully cover my cancer treatment.

A: That will depend on which insurer you are with, and how much the insurer is willing to pay. Coverage is not identical across the seven insurers.

If you are getting treatment with a B1- or A-class IP in a public institution, chances are you will have no problems where drugs are concerned as the CDL price limits are based on what the public sector pays, plus the government subsidy.

Where you might have a problem is the insurance payout for cancer drug services, which is pegged at two to five times the MSL limit of $3,600 a year. How much you are covered for again depends on your plan and what your insurer decides to give.

This will generally be enough for most patients in the public sector, except for outliers such as a patient who requires very expensive treatment like an antifungal one.

If you are seeking treatment in the private sector, most insurers provide five times the MSL limits for both drugs and services. Again, it should generally be enough, especially for straightforward, early-stage cancers.

A problem may arise, however, if you are given drugs on three-week cycles, which is the most common practice. This could mean double the amount of drugs on some months. Whether this amount remains within the limits imposed by the IPs will depend on how much you are charged for the drugs.

Similarly, private hospital IPs will pay up to $18,000 a year for related services such as your doctor’s fees, tests, scans and other medication. Again, it would depend on what you require and how much you are charged for these services.

Q: What happens if I need a treatment that is not on the CDL?

A: Unfortunately, your IP cannot cover non-CDL treatments. The good news is that more drugs and treatments have been added to the list – from the original 270 to more than 340 now, which is about 90 per cent of all HSA-approved treatments.

If pharmaceutical companies selling non-CDL drugs are willing to lower their prices to a level that is considered value for money by the Government, then more will be added to the CDL.

However, most riders do provide some coverage for non-CDL drugs. Among the major IP insurers, Great Eastern appears to have the best non-CDL rider coverage at $250,000, with AIA offering $200,000 a year, Income $15,000 a month ($180,000 a year) and Prudential $150,000 a year.

Q: So does that mean I need to get a rider if I don’t have one?

A: That is a difficult question to answer. Today, two in three IP holders have bought riders.

On a national level, riders are bad news. In 2016, patients with first-dollar riders had medical bills that were 60 per cent higher than those who did not have riders.

Explaining why there was a need for patients to pay part of their bill, then Health Minister Gan Kim Yong said riders that paid for everything “encourage unnecessary treatment, leading to rising healthcare costs not only for those with such riders but for all of us”.

On a personal level, however, people fear facing huge out-of-pocket payment for medical treatments. So they bought riders before the changes to cancer financing to reduce their out-of-pocket payments for big bills.

Without a rider, patients need to pay the deductible, which is cumulative over the year, and 10 per cent of the rest of their bills. With a rider, they pay 5 per cent of bills, capped at $3,000 a year, subject to conditions.

So for people who do not expect to get huge bills, a rider might not make sense since its premium can be high and must be paid for in cash, unlike the IPs, which are paid for with money from MediSave.

But with the changes to insurance coverage for cancer treatments, riders have taken on a new role.

Insurance continues to cover most other treatments on an “as charged” basis, so riders just pay the mandated patient’s share.

There are, however, caps to cancer coverage, as mentioned above. They are five times the MSL limits for both drugs and cancer services for private hospital plans, and lower coverage for A- and B1-class plans.

Will such coverage be enough? Probably enough for most patients, but not all. For those whose insurance coverage is not enough, would the patient’s share be significant? It depends on the drugs and services used, possibly.

Riders also offer some coverage for non-CDL treatments which IPs cannot cover. Most people would not need such treatments. But what if you do?

Q: I’ve just been diagnosed with cancer, and I’m being treated with a non-CDL drug. I do not have a rider. How will this affect insurance coverage?

A: If your treatment has already started, your insurer will continue covering you under the previous system till the end of September.

If you have not started treatment, it will depend on when your insurance year starts. This is because the changes to insurance coverage takes effect only from the time you renew your current contract.

If your insurance year is from April to March, then the changes apply to you immediately. If you had renewed your contract in March, there will be no changes to the way you are covered till you are due to recontract in March 2024.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

This article was first published in The Straits Times on 3 April 2023.