The MediShield Life Fund needs to set aside enough monies to honour expected future commitments including:

             i.        Future premium rebates

To ensure that MediShield Life premiums remain affordable in old age, part of the premiums that policyholders pay when young is set aside ,and returned as premium rebates when they are old and less likely to be working. The contributions from each age cohort will be used to support their own rebates in old age. This helps to distribute premiums more evenly throughout policyholders’ lifetimes.

            ii.        Claims incurred but not yet submitted or paid

This is for expected claims, where the treatment has already taken place (and hence hospitalisation expenses have already been incurred) but have yet to be submitted or paid. This includes the projected future costs for those who have already started on multi-year treatments.

          iii.        Claims not yet incurred but expected to be paid in the future

This is for claims where treatments have not taken place but are expected to occur in the next few years based on actuarial projections and after allowing for future premium collections. This also includes an allowance for the fact that premiums typically remain constant between each scheme review, unlike average claim amounts that increase annually in tandem with rising medical treatment costs.