Protecting the Family with Health Insurance

It is expensive to fall ill in Singapore.

If you have a long-term illness, require a major operation, or do not have company coverage for health insurance, you probably could relate to the statement.

Getting a long-term illness can result in a hefty bill in Singapore if you are not subsidised. As per MOH detailed benchmark forwards, the median total bill can easily range from low thousands for Public Hospital Ward C to as high as tens of thousands at Private Hospital. This excludes follow up treatments such as chemotherapy. Over the last 3 years, I had experienced 2 major illnesses in the family with both parents having to juggle with long term treatments. It was a difficult journey, but we are glad that the episodes were over. Throughout this period, there was additional stress since I had a career switch that resulted in significantly lower income. Having both parents needing long term medical treatments that could have put a major dent in finances was a daunting scenario.

According to this article on the cost of cancer treatment, the average cost of non-subsided cancer surgery, chemotherapy and medication in a Public hospital could easily go up to $50,000 or more. Without a backup plan, high unforeseen medical costs could easily wipe out my retirement funds. Thankfully, what made it less traumatic was that both of my parents have Health Insurance that covered a significant portion of the medical bills. With financial pressure at ease, we could put our focus on the treatments without the added financial worries.

In today's world, other than the usual health threats, we must grapple with Covid19 in our midst. We must be wary about possible hospitalisation and the impending bills from the implication of this pandemic. Given this, Health insurance would play a bigger part in our life.

Health Insurance: The Basic

Ask the layman on the street, the definition of health insurance and you probably may end up with different interpretations. Some may confuse it as a plan that usually gives you a lump sum payout when diagnosed with a terminal illness (critical illness insurance), while others think it is an insurance that would cover the GP’s visit (medical insurance).

To simplify, health insurance is a plan that helps defray your healthcare cost if you are injured, sick or disabled. However, it is meant to cover large medical expenses rather than the usual GP visits unless it is linked to a major or long-term illness.

Am I covered?

Before you decide which Health Insurance to take in Singapore, you might want to know what are the Health Insurances is available to Singaporeans and Permanent Residents.

Medisave

Many mistook Medisave as a medical insurance plan. Rather, it is a National Medical Savings Scheme that helps individuals put aside part of their income into the Medisave Account for future personal or immediate family medical needs such as hospitalisation, day surgery and other expenses.  It is not an Insurance Plan, but you can use the funds to pay for medical expenses or supplement the premiums for Health Insurance.

Medishield Life

MediShield Life is a basic health insurance plan that is meant to guard against hefty hospital bills and costly outpatient treatments, such as cancer chemotherapy. This is a compulsory scheme for all Singapore Citizens and PR and will cover everyone including the aged and those with pre-existing illness. This is an improvement over the original Medshield as it provides lifetime coverage without a lifetime claim limit.

However, MediShield Life is intended to provide coverage for Class B2 or C wards in Public hospitals. There is no lifetime claim limit but there is an annual limit of $100,000 or more. In some cases, this may not be sufficient for the whole course of treatment. MediShield premiums can be fully paid using Medisave.

In a nutshell, every Singaporeans is covered by MediShield Life. However, to get better coverage, you might want to consider Integrated Shield Plans.

Should I get Additional Coverage?

Integrated Shield Plan

At this point, you would probably question the need for an Integrated Shield Plan given that everyone is covered for basic healthcare in Singapore. The key word here is ‘Basic Healthcare’. While Medishield Life does provide coverage, when you are ill, you would normally want the best medical treatments out there. While some may opt for a more comfortable stay in a public hospital with a B1 or A class ward, others may like to use Private Hospital. The key differences between them are that the waiting time for Private Hospital is usually shorter compared to Public Hospital for treatments and surgery. Furthermore, you can also choose your preferred Doctor, unlike a public hospital where the doctors are assigned to you randomly. However, costs for Private Hospital will be much more as it is not subsidised by the Government.

While MediShield Life does provide some coverage for Private Hospital, you would still have to bear the difference in costs. For long term treatments, this could mean an upsize bill that could potentially wipe off your savings.

Integrated Shield Plan is an additional plan on top of Medishield Life to cover you for a larger sum for both public and private hospitals. It gives you more medical options to choose, as well as increase coverage in terms of overall costs. This is also the plan that my parents have taken. With this plan, they can choose the preferred ward for their hospitalisation. More importantly, most of their medical fees have been covered by their treatment. It is important to note that Integrated Shield Plans do NOT cover all expenses. You would have to be responsible for co-payments, deductibles, and proration factors.

Personally, I had benefited from this plan too when I had to do a treatment for a Nosebleed that lasted for weeks. The cost of the treatment was as much as the premium I had paid for the year. In fact, I do not have to pay for the treatment as I had a rider that covered the co-payment (Policy bought when I started NS many moons ago!)

Riders

To enhance your policy, you could add riders to your Integrated Shield Plan. For an additional premium, you can opt for lower co-payment for your plans. For those who had bought riders before 7 March 2018, there is a possibility that the rider can cover all the expenses including co-payment. This option is not available to new applicants for Health Insurance and it will soon be phased out. Nonetheless, riders, allow you to have a co-payment limit and pay only up to 5% of the claimable amount depending on the riders chosen.

After deciding to opt for higher coverage with the Integrated Shield Plan, you may be wondering what the next step is. While most insurers would provide Health Insurance. Not all are equal in terms of coverage, benefits, and terms. The basic to look out for would be the maximum annual coverage limit, Pre-Hospitalisation benefit period, post hospitalisation benefit, types of wards entitlement and premiums payable. For those who prefer to get information from one source, financial products aggregators like Moneysmart do provide a comprehensive comparison between the insurers and what it provides. This is our go-to site whenever we would like to have a comparison of financial products from Insurances to loans and credits.

 

At the end of the day, consider getting yourself an insurance plan that suits your needs and budgets. For those who are hesitant to upgrade because they are covered under company policies, do note that such policies might not be portable if you leave the company. Furthermore, if pre-existing illness exists, taking a policy in your latter years might end up more expensive. For me, I had taken up Health Insurance for the boys since they were babies. It was the most sensible thing to do for me as for a small premium, any potential major health-related expenses are covered. That would mean one less thing to worry about should the need arise.

Have you got your Health Insurance yet?