News from July 2025. Original Article from The Straits Times.
Singapore’s health insurance landscape was stirred in mid-2025 when Great Eastern (GE) announced it would temporarily stop issuing pre-authorisation certificates for medical admissions to Mount Elizabeth Hospital and Mount Elizabeth Novena Hospital, effective June 17. This decision — while not affecting emergency cases — has left many policyholders reassessing where and how they seek private medical treatment.
What Pre-Authorisation Means
Pre-authorisation is a process that allows an insurer to review and approve a medical procedure before hospital admission, ensuring that the treatment is necessary and reasonably priced. It gives policyholders clarity on costs and coverage ahead of time. Without this, patients face uncertainty about how much of their bill will be reimbursed.
To ease the transition, the two affected hospitals can still issue electronic Letters of Guarantee (e-LOGs) of up to $50,000, which waive the need for an upfront deposit. However, this does not guarantee reimbursement — if GE later deems a claim inadmissible, the patient must bear the costs personally.
Impact on Policyholders
Policyholders under GE’s Integrated Shield Plans (IPs) must now decide whether to continue treatment at Mount Elizabeth, move to other private hospitals where pre-authorisation is still available, or even switch insurers. However, changing insurance providers comes with risks — especially for those with pre-existing medical conditions, which may not be covered under new plans.
Some policyholders have voiced frustration, arguing that such restrictions should apply only to new customers, not existing ones who made healthcare choices based on earlier assurances.
Currently, seven insurers offer IPs in Singapore. While Income and Singlife do not provide pre-authorisation, AIA, Prudential, HSBC Life, and Raffles Health still do — though experts caution that GE’s decision might prompt others to reconsider their policies amid rising healthcare costs.
Why Great Eastern Made the Move
According to GE, the decision stems from observations that certain private hospitals have been charging significantly higher fees for similar medical outcomes. By suspending pre-authorisation for these two hospitals, GE aims to rein in escalating medical costs that could otherwise lead to higher insurance premiums for everyone.
Financial results support this rationale: GE’s underwriting profit rebounded to $4.8 million in 2024, after a $44.9 million loss in 2023. Analysts view the suspension as part of a broader effort to control cost levers and sustain profitability.
Expert Opinions Split
Experts are divided on how policyholders should respond.
- Mr Alex Lee of the Singapore Actuarial Society said GE’s move is within its contractual rights, as pre-authorisation issuance is at the insurer’s discretion. He added that the withdrawal is aimed at breaking the cycle of medical cost inflation, where easy affordability drives up overall healthcare spending.
- Mr Kyith Ng, a senior insurance specialist at Havend, suggested that policyholders should maintain a medical emergency fund — perhaps around $20,000 — to handle out-of-pocket expenses and claim delays. Some claims, he noted, can take up to six months to process.
- In contrast, Associate Professor Walter Theseira from the Singapore University of Social Sciences argued that requiring people to keep large cash reserves defeats the purpose of insurance, which is meant to provide financial assurance and risk protection.
Government and Industry Reactions
The Ministry of Health (MOH) is currently engaging with Great Eastern to assess the impact on consumers and ensure that policyholders continue to enjoy their full contractual benefits. The ministry emphasised that IP insurers are obligated to honour claims in line with policy terms.
Industry observers also note that the move sends a “warning shot” to private healthcare providers. If hospitals continue to raise prices unsustainably, other insurers may follow GE’s lead, which could pressure the private sector to moderate costs.
The Bigger Picture
At its core, GE’s suspension of pre-authorisation highlights the delicate balance between affordability and access in Singapore’s healthcare system. With premiums rising, medical costs escalating, and policyholders demanding transparency, insurers are under pressure to find ways to manage expenses without compromising quality of care. private hospitals, and pushing insurers and regulators to rethink how to maintain sustainable, equitable healthcare coverage in the long run.
Private hospitals, insurers and regulators have to rethink how to maintain sustainable, equitable healthcare coverage in the long run.
