$0 Medical Expenses: is it possible? (part 1/2)

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.

Table 1: Medical Bill for a patient who stayed 9 days in B1 wards

 

 

 

 

 

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.

Table 1: Medical Bill for a patient who stayed 9 days in B1 wards

 

 

 

 

 

 

 

In simple Math,

Table 1: Medical Bill for a patient who stayed 9 days in B1 wards

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.

Table 1: Medical Bill for a patient who stayed 9 days in B1 wards

Table 1: Medical Bill for a patient who stayed 9 days in B1 wards

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.

Table 4: Medical Bill for a patient who stayed 9 days in B1 wards

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:

Table 5: Medical Bill for a patient who stayed 9 days in B1 wards

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.

Table 5: Medical Bill for a patient who stayed 9 days in B1 wards

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.

Summary

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.

Table 5: Medical Bill for a patient who stayed 9 days in B1 wards

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