Adapted from CNA TODAY – “How private health insurance is driving up healthcare costs, and what should be done about it,” by Nicole Lam (Nov 8, 2025)
Private health insurance in Singapore, once seen as a safety net for major medical expenses, has become a key driver of escalating healthcare costs. Experts warn that a “vicious cycle” of generous coverage, overconsumption, and rising premiums is pushing the system toward unsustainability.
How the Cycle Began
Integrated Shield Plans (IPs) — private insurance add-ons that complement MediShield Life — were designed to offer flexibility and coverage for higher-class wards or private hospitals. However, as benefits became more comprehensive, both patients and providers began to over-utilize healthcare services.
Patients, shielded from out-of-pocket costs, often agree to more tests and treatments. Doctors, operating under a fee-for-service model, may also order additional procedures. This increases overall claims, forcing insurers to raise premiums — which in turn fuels expectations of even more generous coverage.
Health Minister Ong Ye Kung has described this as a “buffet syndrome”:
“It is paid for, so eat more. It’s human nature, and it’s happening all over the world.”
Mounting Costs and Industry Strain
In 2025, healthcare expenditure reached S$20.9 billion, up from S$9 billion a decade earlier. IP premiums for private hospitals have risen by around 20% in recent years, yet four of Singapore’s seven major IP insurers — including Income and Singlife — reported underwriting losses in 2024.
Some insurers saw claim volumes increase by more than 25%, far outpacing medical inflation.
Despite higher costs, about 70% of Singaporeans continue to maintain IPs, often with riders that cover nearly 100% of medical bills. Many cite peace of mind and quicker access to care as reasons for retaining their plans.
Government Measures and Reforms
To manage spiraling costs, the Ministry of Health (MOH) has worked with the Monetary Authority of Singapore (MAS) to impose stricter oversight on IP design — introducing higher co-payment requirements and encouraging lower-premium, higher-deductible plans.
Benchmarking of private hospital charges — including surgeons’ fees, room rates, and medical consumables — has also proven effective. Since 2018, the growth in surgeon fees slowed from 3% annually to just 0.4% between 2019 and 2023.
Still, experts such as Assoc Prof Alec Morton of NUS caution that stronger regulation alone may not resolve the issue:
“Over-regulation risks reducing choice and innovation. Real reform requires all stakeholders — insurers, doctors, hospitals, and patients — to act together.”
Balancing Sustainability and Care
Insurers are now redesigning products to remain viable while ensuring essential protection. MOH’s focus on value-based care and home-based alternatives, such as MIC@Home, aims to make healthcare both affordable and sustainable in the long term.
As Dr Peter Chow, CEO of IHH Healthcare Singapore, puts it:
“Doctors, hospitals, and insurers each have their part to play. This isn’t about conflict — it’s about responsibility.”
