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Medical inflation in Singapore is expected to reach 10%, which is above the global average of 8%. The increase in chronic condition cases, as well as the aging population needing care, fuels medical inflation in Asia's most expensive city for medical care.
Managing and paying for care chronic condition care in Singapore is not cheap. This not only decreases the quality of life, but also makes employees and individuals less productive, which has a direct impact on the economy.
In Singapore, inpatient costs are mounting due to increasing medical fees for particular types of treatment, especially cancer and cardiovascular care.
Employers are increasingly looking to contain costs via methods like introducing deductibles or co-pays, while at the same time working on implementing wellness and preventative programs to improve health outcomes.
Employers are starting to re-think employee benefits by offering mental health support and wellness programs. In the long term, this will encourage employees to be more active and healthy, and will hopefully have a positive impact in containing medical inflation.
This trend continues from the previous editions of our Cost of International Health Insurance Reports. The growing upper-middle class in countries such as China, as well as population growth of High Net Worth and Ultra High Net Worth individuals who are willing to travel abroad for treatment, are driving the demand for international quality private healthcare. This, in turn, drives up the cost of healthcare, and subsequently the premiums of insurance plans that cover such care.
On a global scale, the cost of healthcare is increasing and has been doing so on a consistent basis for many years. Some of the drivers influencing the rise in healthcare costs include global population aging, poor health habits that lead to the development of chronic conditions, the increasing cost of medical technology and research, and overuse of medical care.
Increased regulatory requirements that vary greatly between different regions are affecting the insurance world vastly. Insurers are thus increasingly struggling with the requirement of offering global health plans that can accommodate all of the different jurisdictions' regulations. Two of the most prominent regulatory trends that we believe are having a significant impact on IPMI premiums globally are the EU's General Data Protection Regulation (GDPR), and the roll-out of mandatory health insurance in a growing number of regions, such as Thailand and Oman.
As in our previous annual editions of the Cost of International Health Insurance report, health insurance fraud continues to be a major issue for the industry and consumers. A growing number of insurers are developing and expanding the use of technology to improve their anti-fraud means. This may initially have an upward impact on premiums due to the insurers' heavy investment in new forms of technology, but will hopefully have a downward impact on premiums in the future as the result of a significant decline in medical insurance fraud.
The increasingly common use of technology in the insurance industry is having an enormous effect on how insurers design their products, underwrite policies, administer plans, as well as manage claims ( including identifying fraudulent ones). The use of big data, artificial intelligence (AI), and the growing importance of telemedicine in a number of key regions all contribute to the improvement and acceleration of many processes (for example, faster claims handling), and may potentially result in huge cost savings. This could mean slower premium inflation rates in the future.
97% of the countries studied have seen an increase in premiums versus last year, with only 3 countries witnessing a decrease. One notable finding is that Australia and Singapore saw significant jumps in their rankings for both individual and family plans. Another standout finding in our 2019 report is that Canada is now the second most expensive country for individual and family IPMI, replacing Hong Kong for this position.
When looking at the top 20 most expensive countries for individual and family health insurance, it is immediately clear that countries from the Americas are dominant in both rankings. More specifically, 15 out of the 29 countries featured in the top 20 ranking tables are from the Americas. There are a number of reasons why plans offered in this region are relatively costly, one reason being that healthcare costs in many of the countries within this region are either very expensive (e.g. the US and Canada), or rising rapidly (e.g. Mexico).
A number of the leading insurers in China did not apply an increase to their premium in 2019, and some even reduced their premiums. One explanation for this is that insurers have improved their ability to identify and segment high-cost providers, and are able to offer cheaper plans that exclude such facilities. A change in government policy has also contributed to a reduction in medical costs in the region.
21 African countries saw premium inflation rates of 15% or higher for individual plans, while 10 African countries saw inflation rates of 15% or higher for family plans. Among the factors that contribute to this phenomenon are the increasing cost of claims in the region, as well as a growing middle class population with higher disposable income.