SINGAPORE – With medical cost inflation in Singapore projected to hit a record high of 16.9 per cent in 2026, the Life Insurance Association Singapore (LIA) called for collective action to tackle issues such as overconsumption of healthcare services, and to contain rising treatment costs.
This means collaboration is needed among insurers, healthcare professionals and providers, consumers and the authorities.
For a start, all seven Integrated Shield Plan (IP) insurers have to launch new riders by April 1 to meet the Ministry of Health’s (MOH) new requirements.
The new riders will require consumers to pay more out of pocket before insurance kicks in and play a bigger role in sharing the responsibility of tamping down rising costs, said LIA executive director Chan Wai Kit in a media interview on March 30.
Based on responses from four IP insurers earlier, the new riders will be priced, on average, at least 30 per cent lower than existing riders, with one insurer offering premium reductions of up to 84 per cent.
But it remains to be seen whether the lower premiums can indeed move the needle towards more sustainable healthcare, said Mr Chan and Ms Wong Sze Keed, who was re-elected as LIA president on March 30.
Mr Chan said that choosing products offered at the lowest premiums will also mean the coverage will differ.
“If the expectations are not aligned, then you are going to hit the other problem down the road, which is ‘I thought I had this (covered) but actually, because of my decision earlier, I don’t,’” he said.
Ms Wong, who is also the chief executive officer of AIA Singapore, said: “Fundamentally, even if you think that affordability is an issue, you should also know what (a rider) covers… I think that process is very critical.”
To address rising insurance premiums and private healthcare costs by instilling discipline in healthcare consumption, particularly for minor procedures, MOH has mandated that new IP riders sold from April 1 can no longer cover the minimum IP deductibles set by the ministry.
This means that those with the new riders have to pay at least $1,500 before insurance coverage kicks in.
In addition, the co-payment cap will be doubled from the current $3,000 to $6,000, requiring policyholders to pay a larger portion of their bills.
Medical costs are expected to continue rising in 2026 globally, with the Asia-Pacific region reporting the highest increase at 14 per cent, according to the 2026 Global Medical Trends report published in November 2025 by global advisory, broking and solutions company WTW.
According to the report, Singapore is expected to overtake Indonesia to become the Asia-Pacific market with the highest medical inflation at 16.9 per cent.
Past WTW annual reports showed that medical inflation in Singapore had been under 10 per cent until 2024, when it rose to 12.3 per cent, and further grew to 15.5 per cent in 2025.
Factors leading to higher medical inflation here include an ageing population; adoption of costly new technologies, treatments and medication; and high operating expenses driven by increasing real estate prices and salaries due to a shortage of healthcare staff.
The Global Asia Insurance Partnership (GAIP), a non-profit tripartite partnership of the insurance industry, regulators and academia, said the health protection gap in Asia – the difference between healthcare costs and financial resources available, including insurance – is now the single largest protection gap. This is compared with other gaps such as mortality and catastrophe protection gaps.
“In Singapore, the discussion is not only about medical inflation, but also about broader healthcare cost trends, including utilisation, how care is delivered, and what these mean for long-term affordability,” said Ms Min Hung Cheng, chief executive officer of GAIP.
The re-elected members of the Life Insurance Association Singapore’s management committee: (From left) Mr Alistair Chamberlain, Mr Andrew Yeo, Mr Gregory Hingston, Ms Pearlyn Phau, Ms Wong Sze Keed, Ms Chan San San, Mr Harpreet Bindra, and Mr Frank O’Neill (representing Mr Benoit Meslet). They are joined by Mr Chan Wai Kit, executive director of LIA Singapore.
PHOTO: LIFE INSURANCE ASSOCIATION, SINGAPORE
GAIP will release its research paper on April 7 relating to healthcare affordability and insurance sustainability.
The LIA management committee also shared its top priorities for the one-year office term after the March 30 election.
Besides collaborating with stakeholders and enhancing public education, especially in the areas of wealth and health protection, LIA will launch a series of financial literacy workshops for students at institutes of higher learning, in partnership with the Singapore College of Insurance.
From April, interactive, in-person workshops will be conducted for students at ITE College Central and Republic Polytechnic to equip them with practical financial knowledge. LIA hopes to work with more institutions on this programme.