Medical costs have been rising a lot recently. Notably, national health insurance and fees charged by doctors have been heating up. It seems like prices keep on increasing despite measures that have been put in place to tackle inflation. What does the inflation situation look like currently? Read on to find out more!
In Summary
The healthcare inflation rate was 1.13% in 2021
From 2001 to 2021, the cost of healthcare rose up to 54.8%
The average healthcare inflation rate was 2.21% from 2001 to 2021
The cost of health insurance has shot up to 4.89% in 2021
Why did healthcare prices inflate?
Inflation occurs when the prices of goods and services increase over time. Normally, in a healthy economy, inflation is common because businesses and consumers are likely to spend more. A high demand (with supply being constant) causes prices to rise.
These goods and services that we spend on includes healthcare, which explains why healthcare also increases along with other goods and services.
To understand inflation, we typically look at the Consumer Price Index (CPI). CPI measures the average change in prices of commonly consumed goods and services in a country. Healthcare is one of the 10 main groups that are tracked in Singapore.
From 2001 to 2021, CPI-Healthcare rose by 54.8%. In other words, a healthcare service that costed $10,000 in 2001 will cost $15,480 in 2021.
Prices have been rising every year, with the exception of the year 2015 and 2020. And in 2021, inflation in healthcare was 1.13%.
How does the cost of healthcare differ from the general cost of living?
From 2001 to 2021, the CPI All-items grew by 35.8%, whereas the CPI-Healthcare increased by 54.8%.
At the same time, the average general inflation rate was 1.54%, while the average healthcare inflation rate was 2.21%.
Overall, we can see that the increase in healthcare costs outweighs the growth of the cost of living in Singapore.
How do we protect ourselves from healthcare inflation?
Inflation is an external factor that is not within our control. It will do us no good to keep focusing on it. What we can do, however, is to learn how to better respond o it.
Every Singaporean is insured through Medishield Life, a national health insurance scheme. This insurance scheme covers our basic hospitalization needs. Moreover, Singaporeans are able to boost Medishield Life's coverage through the Integrated Shield Plan (IP).
However, the premiums of these IPs have risen significantly and have undergone many noteworthy changes. It is likely that changes will continue to be established, especially with the ongoing discussions between the government and medical/insurance associations.
With this trend of rising healthcare costs, simply going for the most expensive health insurance plan may no longer be the most viable option anymore. We should, instead, turn towards insurance policies that are more "value-for-money". Find out which healthcare insurance policy will be best suited for you by Whatsapping me at 97901583.
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