Why are MediShield Life premiums increasing as we get older?
MediShield Life premiums are age-based (i.e. set in line with the risks for each age group).
With an ageing population, it is important to try to avoid intergenerational cross-subsidy, where the young has to pay for the old. If premiums were not priced by age, premiums will keep escalating as a growing number of elderly would need to be supported by a decreasing number of younger policyholders. This will impose an increasing burden on future generations and will not be sustainable. Instead, the Government provides subsidies and premium assistance to those who are unable to afford their premiums.
MediShield Life is different from the social insurance schemes in other countries, where the insurance contributions paid by the working population (e.g. through payroll taxes) are used to fund payouts, which are mostly used by the elderly or sick.
