Abstract
- What is Health Insurance?
- What is MediShield Life?
- Who should buy Health Insurance?
- How much Health Insurance should I buy?
- Should I top up my MediShield Life coverage with an Integrated Shield Plan?
- Can I get 100% coverage without any out-of-pocket expenses?
- What are all these jargons in my health insurance policy contract?
- Is that all for health insurance?
- What should I take note if I want to make claims?
What is Health Insurance?
Health insurance prevents you and your family from suffering a financial loss as a result of an accident, illness or disability. It can provide an income while you are disabled or hospitalized, or cover the cost of your medical treatment or nursing care.
Health insurance may not always fully reimburse you. In reality, there is usually a sharing of costs to minimize the abuse of the healthcare system. Cost sharing could come in the form of: deductible, co-insurance and pro-ration.
What is MediShield Life?
For all Singapore Citizens or Permanent Residents, the government has provided a basic medical insurance called MediShield Life.
It is a basic health insurance plan, administered by the Central Provident Fund (CPF) Board, which helps to pay for large hospital bills and selected costly outpatient treatments, such as dialysis and chemotherapy for cancer. Premiums can be fully paid using Medisave.
MediShield Life pay-outs are pegged at B2 or C ward types, the MediShield Life pay-out will make up a small proportion of the bill of private hospital bills only. Most of their bill will need to be paid using Medisave and/or cash.
Who should buy Health Insurance?
Everyone should purchase additional health insurance because medical expenses are simply too high to cover out of pocket. According to the
Singapore Department of Statistics, the cost of Medical & Dental Treatment has risen nearly 78% in the last 20 years, or more than 2.9% per annum. This is almost double the 20-year inflation rate of the MAS Core Inflation Measure, which is 1.5% per annum.
Ministry of Health publishes
MOH | Fee Benchmarks and Bill Amount Information as public information to guide in charging appropriately and also allowing consumers to make better informed decisions.
Ministry of Health (MOH) recently revealed statistics which showed that between 2007 and 2017, private healthcare costs increased by 9.0% per annum, rising at a rate almost double that of public hospitals.
Taking a simple knee operation as an example. The bill includes your hospital stay, operation fees and assorted other costs:
Ward class |
Total hospital bill |
Public hospital — C |
$5,329 |
Public hospital — B2 |
$6,432 |
Public hospital — B1 |
$19,772 |
Public hospital — A |
$22,389 |
Private hospital |
$34,531 |
How much Health Insurance should I buy?
Since MediShield Life covers only B2 wards and below, you should consider an Integrated Shield Plan and its riders if you want B1 or higher wards. Do note that if you want to select your doctor in a restructured hospital, you would need to be in a A ward.
You may want to consider the following points:
- Employer medical benefits – What coverage is provided to you by your employer?
- Your hospital and ward class preference – Private or Restructured Hospital? Single ward or multiple beds in 1 ward?
- Any preference for doctor
- Level of income protection you require if you become ill or disabled
- Your ability to pay premiums over the long-term
Hospitalization insurance works on a reimbursement basis so the maximum you can claim is the total amount you have paid. You do not need multiple policies to cover this. But hospital income policies are different. All the policies will pay concurrently for every day of your hospitalization.
If you are looking to switch your hospitalization policy from 1 insurer to another, a tip to note is that any pre-existing conditions (any illness or disability you already have at the point of sign up) will not be covered by the new insurer. Therefore, it’s important to consider your health status before doing any switching. This may result in exclusions, loading or even rejection of policy.
Should I top up my MediShield Life coverage with an Integrated Shield Plan (IP)?
Hospitalization coverage is made of up 3 building blocks, namely, MediShield Life; Integrated Shield Plan and also rider. An Integrated Shield Plan (IP) is a medical insurance plan which offers additional benefits on top of that provided by MediShield Life.
There are Additional Withdrawal Limits (AWLs) to enable Singaporeans to use their CPF Medisave, up to a cap, to pay the additional premium for the private insurance component of IPs. The AWLs apply on top of the amount of Medisave used for MediShield Life premiums and can range between $300 to $900. Ministry of Health has provided a
comparison of Integrated Shield Plans for consumers to make more informed decisions.
Can I get 100% coverage without any out-of-pocket expenses?
All Integrated Plans offer “riders” (add-ons) that reduce the deductible and co-insurance costs down to just 5% and usually capped at a further out of pocket limit. These out-of-pocket limits vary from insurer to insurer. Insured would be required to visit the insurer’s panel of specialists and/or apply for pre-authorization approval prior to non-emergency hospitalization.
What are all these jargons in my health insurance policy contract?
Deductible - A deductible is the initial amount you have to pay for eligible medical claim(s) made in a policy year, before you can start receiving any payouts from your insurance policy. For example, if your Integrated Shield Plan includes an annual deductible of S$3,500, you must pay S$3,500 for the first hospitalization claim made in that year before your Integrated Shield Plan starts to pay for your subsequent medical expenses. Any further hospitalization before your policy date will not incur a deductible.
This is meant to screen out small claims as these plans are designed to cover larger hospital and treatment bills. The amount of deductible payable differs with each insurer and depends on the plan you’ve signed up for.
Co-insurance - The co-insurance amount you have to pay under your Integrated Shield Plan is a fixed percentage and only kicks in once you have met your deductible. For instance, if your hospital bill is S$20,000 and your Integrated Shield Plan has a S$3,500 annual deductible and a 10% co-insurance feature, you’ll first have to pay the S$3,500 deductible, before paying 10% of the remaining eligible cost (S$16,500) which works out to an additional S$1,650. Your insurer will pay the remaining of the total eligible medical cost.
You can also tap onto your CPF Medisave to pay for the deductible and co-insurance, up to certain limits, if they are not covered by your health insurance.
Is that all for health insurance?
Hospital income insurance – Pays a fixed amount of benefit for each day you are hospitalized for medical treatment or surgery. This is irrespective of the amount that has been reimbursed for your hospitalization treatment or stay. There may be a maximum number of days that the policy will pay for certain benefits. You may claim across multiple hospital income policies for the same hospitalization stay. The purpose of this is to cover for loss of income during the hospitalization stay or for any other miscellaneous expenses.
Critical illness insurance – Pays a lump sum benefit upon diagnosis of a critical illness to cover for loss of income during treatment and recuperation. Some use the payout for alternative treatments or change of diets as well. The critical illness could be in the early, intermediate or major stages and would be payable depending on the policy wording in the contract. If you purchase an early-stage critical illness coverage policy, you can claim upon diagnosis of an early-stage critical illness. If the policy purchased only covers major critical illnesses, an early-stage diagnosis of a critical illness would not be claimable.
Disability income insurance – Pays a fixed amount each month when you suffer a total and permanent disability due to illness or accident. These policies aim to ease your financial burden, and are not intended to completely replace the income you earned before the disability happened. Thus, policies usually only cover 80% of the last drawn income.
Long-term care insurance – Pays a fixed amount each month towards expenses for long-term care. There are 2 versions that are provided for by the government for Singapore citizens and Permanent Residents. Both of which could be supplemented by private insurers to increase the period of payout and also the amount of monthly payout.
- Eldershield - A severe disability insurance scheme which provides basic financial protection to those who need long-term care especially in their old age. It provides a monthly cash payout for up to 72 months to help pay out-of-pocket expenses for the care of severely disabled persons.
|
If you joined ElderShield
from September 2007 (inclusive)
ElderShield400 |
If you joined ElderShield between September 2002 and August 2007
ElderShield300 |
Payout Amount |
$400 / month |
$300 / month |
Payout Duration |
Up to 72 months (6 years) |
Up to 60 months (5 years) |
- CareShield Life - Long-term care insurance which provides financial protection against long-term care costs of Singaporeans in the event of severe disability. Benefits include: Lifetime cash payouts for as long as the insured remain severely disabled and increasing payouts, starting at $600/month in 2020.
Personal accident insurance – Pays a lump sum upon accidental death, disability or dismemberment. Some policies reimburse outpatient and specialist medical bills incurred as a result of any unforeseen event. The benefits usually cover all phases of suffering an accident, from evacuation to hospitalization and treatment, rehabilitation and recovery. In case of an accidental death, personal accident plans also provide a death benefit. Coverage is usually 24/7 worldwide.
What should I take note if I want to make claims?
To make a claim, you usually need to fill in a claim form from the insurer and provide proof to support your claim. You may also be required to pay any fees associated with obtaining the necessary supporting documents.