Managing Health Inflation - Singapore

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 between 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 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. 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. 

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. Singapore is expected to overtake Indonesia to become the Asia-Pacific market with the highest medical inflation at 16.9 per cent.

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.

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.