In Singapore, we are afraid of outliving our savings and be saddled with high medical bills due to long-term illnesses. The advancement in medical technology has enabled us to develop new drugs which may cure some illnesses, but may also add to the burgeoning medical costs.
It is therefore important that medical expenses are well-covered by our health insurance, and we can focus on our recovery process during the recuperation period.
One national health insurance plan that all Singaporeans and Permanent Residents will be looking forward to is the launch of Medishield Life on 1 November 2015.
This is an important step in alleviating the increasing medical costs in Singapore. Medishield Life will help to offset large hospital bills and certain outpatient treatments. It is also an upgrade to our existing Medishield, which is one of the pillars of our 3M Health Financing Framework.
Medishield is designed to pay for large hospital bills and costly outpatient treatments such as dialysis and chemotherapy for cancer. However, the coverage is only applicable for patients who are staying in a public hospital, Class B2/C wards and below. Nevertheless, there are some who would like to stay in Class B1/A wards and above and probably in private hospitals so they may opt to buy an integrated shield plan with one of the private insurers to cover for such extra costs.
Another important concept about Health Insurance is the deductible and co-insurance. Basically, patients are expected to pay a portion of the total bill (known as deductible) and a percentage of the excess as co-insurance. This illustration will show you how much you need to pay.
So at this point in time, what should I do if I want to purchase health insurance?
Well, for a start you are already covered under both Medisave which you can use to offset medical expenses subject to limits and the Medishield scheme which will help to cover the hospital bills and outpatient treatments to a certain extent.
However, if you were to refer to our previous infographic, this scheme is designed to be a co-payment solution which means that you will still need to pay for deductibles and co-insurance either by Medisave or Cash.
Let's assume that you decided not to pay anything out of your pocket for hospital bills and outpatient treatments. You would then need to have an integrated shield plan from a private insurer to cover for these charges. Thus, you can start to compare the various integrated shield plans and decide which offers you the best value for the coverage that you are seeking. More importantly, you will probably need to add in riders to cover for the deductibles and co-insurance because the basic plan only covers the portion net off all these charges.
The other scenario is such that you believe the upcoming Medishield Life is sufficient and do not think there is a need to opt for an integrated shield plan with one of the private insurers. One of the key differences will be the coverage extended to Class B2/C wards in public hospitals for Medishield Life but the integrated shield plans can cover up to standard rooms in private hospitals. Furthermore, the additional coverage provided by these private integrated shield plans will add to your premiums and as you get older, you will need to pay more too so affordability is another consideration.
In conclusion, if you decide not to do anything, you can be assured that your hospitalisation bills and outpatient treatments will be paid for by either Medisave or Medishield Life or both to a certain extent. However, if you would like to cover your charges from the first dollar up and affordability is not an issue then perhaps an integrated shield plan would be more suitable.
If you wish to find out more information or to review your existing health insurance shield plans, please feel free to send us an enquiry to our investment advisory team, advisory@fundsupermart.com. Our dedicated team of advisers will be more than happy to assist you further.