Hospital Insurances Changes [May 2025]

Daniel Lee
May 16
7 min read

This article is written for my clients. If you are not my client but choose to read this article, please note that this is not financial advice. Please speak to your financial advisor before making any decision.

Another year, another round of premium increases. While I’m sure all of us are sick of hearing the news of price hikes on our hospital insurance, we have no choice but to deal with the cards that are dealt to us by the industry.

In this article, I’ll run you through

Key changes you need to be aware of
Our options moving forward
What I am doing for myself
TLDR

For those who are too lazy to read, I got you covered fam (no pun intended). You can jump straight to the TLDR section.

Key Changes You Need To Be Aware Of

This round of changes in April 2025 is mainly on premium increases that are targeted mainly for the Medishield Life component (which affects everyone) and private hospital coverages (which affects those insured up to private hospitals).

From a complete coverage standpoint (Medishield Life + Integrated Shield Plan + Co-payment Rider), there are no material changes in the benefits. This round of changes focuses largely on pricing to adjust for medical inflation and the insurer’s underwriting sustainability.

MediShield Life Premium Increase

With higher claims and expansion of coverage, premiums may increase by as much as 35%. The increases will be phased evenly over three years from April next year to March 2028.

Private Coverage Premium Increase

Similar to the previous years, the bulk of the premium changes this round largely affects policyholders who are covered for private hospital treatments with the bulk of the premium increase applying mainly to the co-payment rider component.

Those who are insured up to Government A Ward hospital may see their premium increase as well, though the nominal increment is low (due to the low base effect) and almost negligible, in my opinion.

In totality, after accounting for all the premium increases across all components, the companies, here are the following percentage increases in the average annual lifetime cost (Age 1 to 85) for the two companies that I recommend that you are on.

Introduction Of No Claim Discounts (Only For Private Hospital Coverage)

Unfortunately, the industry is shifting toward claim-based pricing, with more insurers raising premiums upfront while implementing a No-Claim Discount to discourage excessive use of health insurance.

Thankfully, this trend is only present in the area of Private Hospital Coverage, which is also why we see the majority of the premium increase affecting those who are covered for private hospital treatments.

Currently, 4 out of 7 insurers practice No Claim Discounts.

For us, HSBC Life has introduced their version of a No-Claim Discount following this round of premium increases while NTUC Income continues to apply a standard premium regardless of claim experiences.

For HSBC, their version of a No-Claim Discount will commence starting in April 2025. Moving forward, there will be a yearly review where if you did not claim on the policy over the last 12 months, you will enjoy a certain percentage of discount (up to 20%) applied to your premiums.

Do note that the No-Claim Discount mainly applies to the premiums for the Co-Payment Riders only.

Overall Impact On The Market Leaders

Despite the numerous changes in the industry post-COVID, what remains steadfast are the market leaders.

Taking into account both benefits and costs, my stance towards the market leaders remains unchanged – for cost-effectiveness (NTUC income) and benefits (HSBC Life).

The changes that we have experienced thus far affect the entire industry and are not isolated to a specific company, which is the reason why, on relative terms, the market leaders remain unchanged as the industry has changed for the worse as a whole.

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Our options moving forward

Now that you understand what’s changed, let us talk about your options moving forward if you’re currently covered for private hosptialization.

If you would like to be covered for private hospital treatment

If you’re on HSBC Life – the question you’d have to ask is if you are okay with paying a higher premium (as compared to Income) to continue to enjoy the higher benefits (Non-CDL Claim Limit & misc. benefits). If you do not see a need for the higher benefits, you might want to consider other providers.

If you’re on NTUC Income – chances are that your focus is on getting yourself adequately covered while focusing primarily on budget. If that objective remains unchanged, you can continue to insure with NTUC income.

If you feel that the premiums for private coverage are too much

The only option for this would be to downgrade your coverage to cover yourself for up to Public A ward coverage.

However, if you are considering a replacement, do bear in mind that there are risks associated with such an action. The biggest risk of doing so is the risk of having your pre-existing conditions (known or unknown) excluded from your newer insurer which may be covered by your existing provider.

Please SPEAK TO ME if you are unsure of what’s best for you or before making any decision.

We can schedule a session to run through your options in greater detail for tailored financial advice.

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What I am doing for myself

Currently, I am insured under HSBC Life which covers private hospital treatments.

Reason for continuing with HSBC:

I’ll not be making any changes to my plans as HSBC Life remains to be, in my opinion, the market leader for having the best benefits at a reasonable price.

Furthermore, I feel that having a higher non-CDL claim limit is something that I can afford and is worth paying for to further reduce the risk of having insufficient “alternative” healthcare coverage when the time arises.

While the miscellaneous benefits are good to have, as I’ve repeatedly said, we wouldn’t die without it, but for the non-CDL claim limit, this will make a material impact should the need for it arise.

If you don’t know what I am talking about you can read about it here: 3 Changes To The Hospital Insurance Industry

Reason for continuing with Private Coverages:

As for why I’d continue to remain to be covered up to private hospital, here’s my two cents. Having seen the quality of stay within Public B1 & B2 wards, I’ve concluded that the minimum standard of care that I’d like to receive would be at least A ward.

However, given the demographic trends, the rising purchasing power of Singaporeans and PRs and the limited number of A-wards available. I’d very much want to keep my options open for private hospital care to avoid encountering the issues of long waiting time and the other issues that come with a constrained public healthcare capacity.

While it sucks that the prices have gone up drastically over the last 5 years, I feel that as price takers, it is what it is. So long as I can afford the premiums comfortably, I do not see a need to compromise on my benefits, given the trade-offs associated with doing so.

That said, to each their own. As I’ve always preached, there are no right or wrong answers; what is important is that you understand what you’re paying for and make a decision that you can afford and not regret in the future.

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TLDR

Long story short:

Prices have increased again across the board, with those who are insuring for private hospital treatment feeling the majority of the increment (both on a percentage and nominal basis.

For us, here are the percentage increases in the average annual lifetime cost

HSBC Life's drastic increase in premiums for private hospital coverage is accompanied by the introduction of a no-claim discount, which will be applied starting next year with an increase in discount for every year that we do not claim on the policy.

This no-claim discount that was introduced is increasingly becoming an industry standard, with 4 out of 7 insurers practising it for their private hospital coverages. The discount only applies to the premiums of the co-payment riders.

Moving forward, your options largely depend on what you are willing to pay for. This is summarised in the table below:

The key difference between HSBC Life and NTUC income that could justify the price difference, in my opinion, is the higher non-CDL claim limit of $30k/m for HSBC Life as compared to the $15k/m for NTUC income.

If you don’t know what I am talking about you can read about it here: 3 Changes To The Hospital Insurance Industry

While HSBC Life does offer several miscellaneous benefits that are absent in NTUC Income’s policy, as I’ve repeatedly said, we wouldn’t be financially ruined without it.

However, for the area of non-CDL claims, having a higher claim limit will make a material impact should the need for it arise.

If you need a session to run through your options, we can have the conversation either during our annual review, or you can schedule a session with me today.

If you’re not my client and are reading this, please seek proper financial advice before making a decision. This article is written to inform my clients of the changes, and opinions towards the changes. It is by no means to be seen as financial advice.

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Daniel is a Licensed Independent Financial Consultant with MAS and a Certified Financial Planner (CFP®).

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