With the high cost of healthcare here, it’s key for expats to secure comprehensive health insurance when living in Singapore. But health insurance costs can be expensive too; Pacific Prime’s Cost of Health Insurance Report 2020-2021 found that Singapore is the third most expensive place in the world to get insured. On average, an individual and family here will need to fork out $7,480 and $21,046 for premiums, respectively. The cost of health insurance has also increased in 2020 compared to 2019, while 36 out of the 100 locations in the study saw a decline. So why are health insurance premiums in Singapore so expensive? The team at Pacific Prime Singapore tell us more about their findings.
#1 Medical costs are on the rise
This is largely due to advancements in medical technology and increased operating costs. When healthcare providers in Singapore increase their prices, health insurers end up paying more, resulting in higher health insurance premiums.
#2 Bad lifestyle habits
Another reason is people’s way of living; having a poor diet, for example, a lack of exercise or even heightened stress. These can lead to a rise in chronic diseases such as diabetes and circulatory diseases, driving up insurance claims. To tackle this, the Health Promotion Board (HPB) in Singapore seeks to educate the population on the importance of healthy living.
#3 People are living longer
Singapore is facing a “silver tsunami”; by 2030, 1 in 4 people in the country will be older than 65 years. As life expectancy increases, people are more likely to require medical care. This places a burden on the healthcare system, increasing costs. In turn, insurers have to adjust their health insurance premiums.
#4 Increasing value of health insurance claims
Some policyholders are overusing their insurance plans and making many large claims. The latest and most expensive treatments may not always be necessary for a given condition, but those with insurance plans are likely to opt for these as they won’t have to pay out of their own pocket. In response, insurers have to increase premiums. To tackle this, measures are in place such as co-payments.
#5 Advancement in technology
Insurtech is a big buzzword in the insurance sector as digital health systems (mobile apps, patient portals, and more) are increasingly being used to enhance efficiency and accessibility. One way is through telemedicine or virtual health consultations, which has gained traction during the pandemic. Investments in telemedicine systems and networks can increase costs in the short-run and have spillover effects on insurance premiums.
To check out more health insurance trends globally, download Pacific Prime’s Cost of Health Insurance 2020-2021 report.