You may have read about the recent news that the government will be increasing MediShield Life premiums in 2025 and are wondering how this will affect you.
Before we dive into it, here’s a quick overview of MediShield Life:
MediShield Life is Singapore’s national health insurance scheme that provides all Singaporeans and PRs with essential protection against large hospital bills and selected outpatient treatments.
According to the Ministry of Health (MOH), the premium adjustments aim to ensure that MediShield Life remains financially sustainable while enhancing the coverage it offers.
From April 2025, the premiums will increase by up to 35%, phased evenly over three years.
We break down the reasons behind the increase, what support is available to offset the additional costs, and what this means for your insurance expenses.
Why Are MediShield Life Premiums Increasing?
The MediShield Life premiums are reviewed by the MediShield Life Council every three years. This review ensures that the scheme remains financially sustainable and continues to support the growing healthcare demands of Singaporeans. There are two main reasons for the increase in MediShield Life premiums starting in 2025.
1. Rising healthcare costs
As medical treatments — both inpatient and outpatient — become more expensive, the MediShield Life scheme needs to adjust its premiums to ensure that it can cover a significant portion of these costs. With Singapore’s ageing population and increased frequency of claims, the demand for healthcare services has increased, further contributing to rising costs. To keep up with these changes, the government has to raise premiums to ensure the scheme’s sustainability.
2. Enhanced coverage
Another reason is the expansion of MediShield Life coverage. It has been expanded to include new outpatient treatments, and the claim limits have been increased to provide more meaningful protection. This includes raising the inpatient and day surgery claim limits to fully cover 9 out of 10 subsidised bills and increasing the policy year claim limit to $200,000 from $150,000. To provide a higher level of support for policyholders, these adjustments require an increase in premiums.
Summary of MediShield Life Coverage
With MediShield Life, you are covered whether you stay in a Class B2 or C ward in public hospitals or require costly treatments like dialysis.
As part of the 2025 changes, MediShield Life coverage is being expanded and enhanced. Here are some of the key updates to the scheme:
- Increased inpatient and day surgery claim limits: The claim limits for inpatient and day surgery will be increased to ensure that 9 out of 10 subsidised bills are fully covered. This will help reduce the financial burden on patients and provide greater assurance during hospitalisation.
- Higher policy year claim limit: The policy year claim limit will be raised from $150,000 to $200,000, allowing for greater coverage for those who face exceptionally high medical costs.
- Increase in inpatient deductible: The inpatient deductible, which is the amount you must pay before MediShield Life kicks in, will also increase by up to $1,500. This change helps keep premiums affordable while ensuring that MediShield Life remains focused on covering larger medical bills.
- Enhanced outpatient coverage: The coverage for outpatient treatments will be expanded to fully cover 9 out of 10 subsidised bills. This includes increased claim limits for treatments like dialysis and chemotherapy.
- Expansion to new outpatient treatments: MediShield Life will now cover new outpatient treatments and home-based medical care, making healthcare more accessible to those who require treatment outside of a hospital setting.
- Introduction of an outpatient deductible: A new outpatient deductible of $500 per year will be introduced to focus coverage on larger bills while making smaller claims more manageable.
- Decrease in co-insurance for outpatient treatments: The co-insurance for outpatient treatments will be reduced, which means patients will need to pay a smaller portion of their bill, making healthcare more affordable.
Government Support and Subsidies to Offset the Increase
To help Singaporeans manage the rise in premiums, the government is offering several forms of support and subsidies. These measures are designed to more than offset the premium increases over the next three years.
Premium subsidies
The government is increasing premium subsidies for lower- and middle-income Singaporeans, with subsidies increasing by 5-10 percentage points. For older age groups, subsidies can now reach up to 60%. These increased subsidies will help reduce the financial burden for those most affected by the premium increase.
To further ease the burden, additional MediSave top-ups will be provided, varying by age group. These include:
- The Majulah Package: Announced earlier, this one-time package provides MediSave top-ups for eligible seniors. The top-up will be enhanced to help cover the rising premiums.
- Pioneer and Merdeka Generation Packages: Seniors from the Pioneer and Merdeka Generations will receive additional MediSave top-ups. For example, the Pioneer Generation will see an increase of up to $300 in annual top-ups, bringing the total to $1,200 per year.
- Increased MediSave Grant for Newborns: From April 2025, the MediSave grant for newborns will be increased from $4,000 to $5,000, ensuring their MediShield Life premiums are fully covered until age 21.
Additional financial support
The government will also expand additional premium support to help those unable to afford their MediShield Life premiums after subsidies. This means that individuals with limited financial means can still access essential healthcare coverage without financial hardship.
Health Promotion Board’s Healthy 365 App
Those on Health 365 can earn Healthpoints through the app by participating in health activities and challenges. These Healthpoints can then be redeemed for premium discounts, helping to offset the cost of MediShield Life premiums.
According to MOH, the combination of increased subsidies, MediSave top-ups, and other support measures will offset the premium increases for most Singaporeans over the next three years.
Impact on Integrated Shield Plan (IP) Premiums
MediShield Life forms the foundation of most Integrated Shield Plans (IPs), which offer additional coverage for those who wish to stay in private hospitals or higher-class wards in public hospitals. Due to the increase in MediShield Life premiums, IP premiums may also be affected.
Pro-ration factor reduction
As part of the changes, the pro-ration factor for Class A and B1 wards in public hospitals will be reduced. This means that MediShield Life will cover a smaller portion of these bills, and the IP will have to cover a higher share. Insurers may pass these additional costs on to customers by adjusting IP premiums.
Potential premium adjustments
With the changes to MediShield Life and the overall rise in healthcare costs, insurers will likely review and adjust IP premiums accordingly. Policyholders should be aware that their IP premiums may increase, and it is advisable to stay informed about any upcoming changes by reviewing policy documents or consulting their insurer.
Know Your Coverage Before You Need It
With significant changes coming to MediShield Life, it is crucial to stay informed and proactive. Here are some steps you can take to ensure you are well-prepared:
1. Conduct annual reviews
Review your health insurance coverage annually, especially when there are major changes like the upcoming MediShield Life premium increase. Regular reviews will help ensure that your insurance plan continues to meet your healthcare needs without placing a strain on your finances.
2. Use the health insurance checker
If you’re unsure of your existing coverage, we have a health insurance checker that lets you find out about your coverage and how it aligns with the upcoming changes. This tool can help you see if you need to adjust your plan to better suit your needs.
3. Speak with your Insurance Agent
If you are unsure how the changes affect your coverage or premiums, speak with your insurance agent. They can help you understand your options and make informed decisions about any adjustments to your insurance coverage.
While the increase in MediShield Life premiums may seem significant, the government is providing subsidies and support measures to offset the additional costs, ensuring that healthcare remains affordable for Singaporeans. On top of that, this is all still in your CPF, so you don’t have to pay with cash.
