Singapore healthcare system is one of the more well-established in the world. While the costs for medical treatment at the heavily subsidized B2 and C wards at the Singapore Restructured hospitals remain affordable, treatment and medication at private hospital or non-subsidized wards can be high. So, having sufficient medical (hospitalisation) and life insurance coverage for you and your family members are important in order to battle against the increasing medical expenses.
In this first part of this two-part article on $0 Medical Expenses: is it possible?, I’ll share with you how the as-charged integrated shield plan (ISP) offered by insurance companies and the riders for the ISP can be used to cover all the medical expenses, effectively cutting it down to $0.
Hospitalisation Plan for Medical Treatment
Claimable Amount for Medical Expenses
Every working individual (Singapore citizen or Singapore Permanent Resident) is required by law to contribute to the Medisave portion of his CPF account. Typically, most people will utilize their Medisave to buy Medishield, a low-cost medical insurance scheme provided by CPF Board, for themselves or their family members as financial protection against hospitalisation expenses and treatment. Medishield, however, is usually inadequate in covering the incurred medical expenses due to its low claimable limits for hospital services and surgical treatment. As illustrated in Table 1 below, a patient who stayed 9 days in B1 wards in a Singapore Restructured Hospital, is only able to claim for $8,250 out of the $92,000 medical expenses via the Medishield plan.
In order to cover the expenses, it is highly recommended that one should purchase the Medisave-approved Integrated Shield Plan (ISP) offered by insurance companies like NTUC Income, AIA, Aviva, Great Eastern and Prudential. All these insurers now offer the “As Charged” plan that gives 100% coverage of all medical expenses (i.e. fully claimable) at a small additional premium using your Medisave. In the above example, the claimable amount for the medical expenses will be $92,000 if the patient is covered under the ISP.
Deductible and Co-Insurance for Medical Expenses
Wait a minute! When we say the medical expenses is fully claimable, it does not mean that the patient needs not to pay a single cent. He is still required to pay for the Deductible and Co-Insurance for the hospitalisation bill. By definition, Deductible is the initial amount an insured needs to pay for his claim(s) made in a policy year before any payout from the insurance company. Co-insurance is the percentage of the claim that an insured needs to pay, on the portion of the claimable amount above the Deductible. Figure 1 below illustrates the amount payable by the patient (the Insured) and the insurer for his total medical expenses.
In simple Math,
Under Medishield, the patient’s share of the Deductible ranges from $1,000 to $3,000, depending on the patient’s age. The Co-insurance ranges from 10% to 20%, depending on the size of the hospital bill. The details are as shown in Table 2 and Table 3 respectively.
Under ISP, the Deductible varies on the Ward class as shown in Table 4 below. The Co-insurance for ISP is 10% of the claimable amount above the Deductible.
Following the earlier example of the medical bill for the patient who stayed 9 days in B1 wards in a Restructured Hospital, the Deductible, Co-insurance and eventually the amount payable by the patient (the Insured) are calculated and showed in Table 5 below:
In this example, payouts from the ISP is $81,000 whereas Medishield only reimburses $5,825 for a hospitalisation bill of $92,000!
Rider for Deductible and Co-insurance
All ISP comes with option to purchase a rider to waive off the Deductible and Co-insurance. With this rider, it simply means that you pay $0 (yes, no typo error here!) instead of $11,000 for your final medical bill. The yearly cash-only premium for the rider for age 31–40 costs only $105 from NTUC Income. And this takes 100 years of yearly premium of $105 to make up to the $11,000 medical bill! So, you should be thinking of buying the rider even for your new born when his health is good.
Figure 2 in the following page shows the difference is the amount payable by the patient (the insured) for the Medishield, ISP and ISP with Rider.
It is obvious that the ‘As Charge’ and rider offer by private insurer’s Integrated Shield Plan is much more superior than the basic Medishield Plan. The additional premium is little compared to huge benefit it will reap in the long run. Before you decide on which ISP to purchase, you are encouraged to visit Ministry of Health (MOH) website at http://www.moh.gov.sg/mohcorp/hcfinancing.aspx?id=342 to study the differences of the ISPs offered by different insurers. The service indicators of the insurers are also available at the website for you to make an informed decision on what is best for you.
this complete Part 1 of this two-part article on $0 for Medical Expenses: is it possible. As explained in this article, the dream for $0 medical expenses can come through if you and your family have the right amount of appropriate hospitalisation and life insurance plans. Act now to upgrade to Medisave-approved Private Integrated Shield Plan with “As-Charged” feature and the rider.
In Part 2, I’ll cover the types of life insurance that one should consider to cover the expenses required while he is under medical treatment and recovering from the illness.