Singapore companies rethink health cover as claim costs climb

MOH rider changes tighten coverage and lift co-payment exposure from April 2026.

Rising private medical claims and tighter policy rules are forcing insurers and employers in Singapore to redesign health benefits as medical inflation accelerates and workers face higher out-of-pocket costs.

Kai Tze Yeoh, head of product strategy and healthcare propositions for Singapore and Australia at Cigna Healthcare, said the value of international health cover is shifting beyond price.

“Whilst we see healthcare costs converging globally, the biggest value of a global plan no longer lies solely in affordability but also in its geographic flexibility,” he said in an emailed reply to questions.

“Modern executives no longer view their lives through a single-country lens,” he told Insurance Asia. “They want a plan that follows them from a Singapore headquarters to a regional hub without re-underwriting or losing continuity of cover.”

A Cigna report in April found that 51% of globally mobile employees say delays in care affect work-life balance. The study also showed that about 80% of respondents experience stress linked to financial pressure, isolation, and disrupted routines, whilst 73% want stronger healthcare support before relocation.

Yeoh said higher use rates are also lifting claims, particularly as preventive diagnostics improve early detection.

“The biggest advantage of modern healthcare solutions is the ability to detect health conditions earlier,” he said. “Hence, we see a higher incidence of claims from health conditions such as gastrointestinal issues, musculoskeletal injury and neoplasms.”

Artificial intelligence (AI)-assisted colonoscopy and similar tools are increasing detection of early-stage conditions, raising short-term claims even as outcomes improve, he added.

Singapore is also tightening insurance design. Under Ministry of Health (MOH) changes that took effect on 1 April,
riders will no longer fully cover deductibles that range from $1,170 (S$1,500) to $2,740 (S$3,500) a year.

The annual co-payment cap will also rise from  $2,340 (S$3,000) to $4,690 (S$6,000). In return, premiums are expected to fall about 30% on average, or $470 (S$600) a year for private hospital policyholders.

Kelvin Loh, chief healthcare officer at AIA Group Ltd., said the broader cost issue is being driven by both system design and inefficiency.

“The fee-for-service model is not sustainable,” he said by telephone. “It is the traditional payment model in Asia, but it is no longer sustainable and needs to be fundamentally changed,” he added, noting that it rewards volume of activity rather than outcomes.

He said unnecessary tests, repeated diagnostics, and avoidable hospital admissions continue to inflate costs.

Loh also cited evidence suggesting as much as 60% of back surgeries might be inefficient or unnecessary.

A Willis Towers Watson Public Ltd. Co. report in November 2025 projected Singapore medical inflation at 16.9% in 2026, driven mainly by private healthcare claims.

Yeoh said insurers are responding by tightening medical review processes and aligning decisions with global clinical standards.

Loh said fragmented care and inconsistent medical definitions across hospitals complicate cost control and claim management.

“AIA’s healthcare strategy is about creating a system where patients, providers, and payers all benefit,” he said. “For the most part, we will do this by working with partners in the healthcare provision system.”