Health Minister Khaw Boon Wan told local reporters on Sunday that average monthly fees in MediShield, the sole government health insurance program that covers more than half the population, would rise by about S$10.

He said this would help reduce out-of-pocket expenses for major medical bills from 60 percent to 30 percent.

"I must have met thousands of people and I think they agree with me that there is a problem for patients who are very sick, with very large bills," the Straits Times newspaper quoted Khaw as saying.

"And MediShield today is inadequate."

Khaw said that the goal of MediShield when it was introduced 14 years ago was to ensure patients paid only 10 percent of their hospital bills.

But he said, with fees remaining unchanged since then, ballooning health costs have meant patients are now paying on average about 50 percent of their hospital bills.

Adding to the concerns is that payouts over the past two years have for the first time exceeded premiums collected, although the scheme still has deep reserves.

Khaw said full details of the overhaul would be announced over the next one to two months, with the changes to implemented by July 1 next year.

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