What You Need to Know About the New Cancer Drug List (CDL)
Cancer is a disease that affects millions of people around the world, and it can be very costly to treat. In Singapore, the Ministry of Health (MOH) conducted a review of MediShield Life in 2020 and found that the cost of cancer treatment was increasing at a shocking rate of 20% per annum compounded each year.
This staggering increase each year means that treatment costs will continue to escalate quickly, and premiums for healthcare insurance will also increase drastically unless something is done to control these rising costs.
What is the Cancer Drug List (CDL) and why?
To address this issue, MOH has created the Cancer Drug List (CDL), which is a list of approved cancer drugs that can be claimed from your MediSave, MediShield, and one’s integrated Shield policy. The changes have already been implemented for MediSave and MediShield from September 2022, and for integrated Shield policies, the changes will take effect when your policy renews after 1st April 2023.
Prior to the CDL, coverage for cancer treatment under integrated Shield plans was on an as-charged basis, which meant that insurance companies would cover the cost of treatment regardless of how expensive it was. This incentivises drug companies to increase the prices of their drugs since patients usually do not bear the costs and charge such expenses to their insurance. MOH found that Singapore was paying more for cancer treatment than other developed countries like South Korea and the UK.
The CDL allows the MOH to manage the cost of cancer treatment in Singapore by negotiating with drug manufacturers to include their treatments on the list. The theory is that cancer treatment providers will want to be on the CDL so that insurance will pay their treatments, and they will be willing to negotiate with the MOH to be included on the list by lowering costs.
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While the CDL may be beneficial in managing the cost of cancer treatment in Singapore, there are some downsides. Certain treatments will no longer be covered, as only 90% of HSA-approved cancer treatments will be on the list. This means that if you are seeking treatment from the remaining 10%, it will not be claimable. Additionally, even if the treatment is on the CDL, there is a cap to the amount of insurance coverage that can be paid out in such a claim, even if you upgrade to an integrated Shield policy.
Previously, it was as charged, but now it’s only a maximum of five times the MediShield Life limit. MediShield Life currently allows a maximum claim of S$9,600 per month for claimable CDL treatments, and this amount depends on the specific treatment. It also allows a maximum of S$3,600 per year for cancer drug services which include things like consultation, scans, treatment preparation etc. Integrated Shield policies will only be able to cover a maximum of S$48,000 per month and S$18,000 per year for these two areas.
Things we can do
Buying an integrated Shield plan rider
One of the things individuals can do to cope with the changes brought about by the CDL is to consider getting a rider along with their integrated Shield plan. This is because riders can cover non-CDL drugs up to specified limits. Plans like HSBC Life Shield and SingLife Shield, for instance, can give you up to S$30,000 per month of coverage on non-CDL treatment with their riders.
Upgrading to these plans and buying their riders could be a viable option if you are concerned about claiming outside of the CDL. However, please note that this is not an endorsement of these plans and as usual, this is not personal financial advice. Please consult a qualified financial advisor if you have specific questions.
Increase critical illness coverage
Talking about insurance, one should also review their coverage against critical illness and increase the coverage if necessary. In an event such as cancer, critical illness coverage steps in to provide a lump sum payout to hedge against an increased cost of living due to the illness. Such a payout can also be used to defray the costs of cancer treatment that is beyond the CDL coverage.
We should not spend too much on insurance, so as usual we need to avoid pricey plans like whole life policies and investment-linked policies. At the same time, we shouldn’t scrimp if the coverage is necessary to hedge us against potentially devastating events. Do watch my insurance webinar for more information.
Opting for restructured hospitals rather than private ones
When it comes to treatment, my personal take is that I would opt for restructured hospitals rather than private hospitals. For-profit hospitals have an obvious financial incentive to charge as much as they can to maximise their revenues and while as-charged plans might have been able to cope with their charges in the past, the new changes may make even having private insurance insufficient to cope with the high charges.
This can be a highly contentious issue as some people may strongly feel that private hospitals provide a much better quality of care compared to restructured ones. If you share that view, you should make sure you have adequate insurance coverage for private hospitalisation. Personally, I am currently comfortable with restructured hospitals and feel that the costs would be better managed this way.
Increasing our funds for contingencies
Lastly, it’s important to increase the funds we have for contingences. In the short term, that involves channeling more funds towards low-risk instruments like Singapore Savings Bond and higher-interest bank accounts. In the longer term, it means being more prudent in finances and putting aside more funds for future needs.
These are things we should be doing anyway, but the rising cost of medical expenses has led me to be a lot more pessimistic when it comes to preparing for future unknowns. Not only is a sizeable amount of reserves useful to tackle medical costs, it also allows for options like paying for insurance and seeking treatment abroad. The peace of mind it gives is also invaluable.
In conclusion, the CDL is a significant change to the healthcare landscape in Singapore, particularly for those seeking cancer treatment. While it may result in some treatments no longer being covered, it also has the potential to help manage the rising costs of cancer treatment in the long term. As individuals, there are steps we can take to cope with these changes, such as getting a rider, increasing critical illness coverage, opting for less expensive medical providers, and building our reserves for emergencies. By taking a proactive approach, we can ensure that we are still getting the care we need while managing our healthcare costs effectively.
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