Given the recent updates to the Integrated Shield Plan, is it advisable to rely on my company insurance for hospital coverage?

The most pressing issue in recent healthcare news is the significant increase in Integrated Shield Plan premiums, particularly for those seeking private hospital coverage.

This is due to rising healthcare costs and the need for insurers to maintain profitability. Here’s a summary of key takeaways:

Premium Increases: Several insurers, including AIA, Income Insurance, Singlife, Great Eastern, and Prudential, are raising premiums for their Integrated Shield (IP) plans.

Reasons for Increase: Rising healthcare costs, increased claims, and the need to maintain profitability are driving the premium hikes.

Impact on Policyholders: Policyholders, especially those with private hospital IPs, may see a substantial increase in their IP premiums at renewal. This will also translate to higher lifetime premiums.

Alternatives: Some insurers offer alternative riders or plans with lower premiums, but these may have limitations in coverage.

Long-Term Sustainability: The long-term sustainability of IPs is a concern, and insurers are taking steps to address this issue.

In essence, policyholders should be prepared for higher premiums and carefully evaluate their IP needs to make informed decisions.

So, if you have ever wondered what you should do in the unfortunate event that you are hospitalised… Did you know that as an employee in Singapore, your company likely provides medical insurance coverage for you? What will happen when you are admitted to a hospital for treatment? Is your company’s insurance sufficient, and should you claim through your company insurance or your Integrated Shield Plan? This article highlights three points to help you consider before making your decision.

1. Will claiming from my Integrated Shield plan affect my premiums?

Did you know that some insurers have implemented Claims Based Pricing on their Integrated Shield plan riders? This is similar to the No Claims Discount commonly practiced in car insurance policies where individuals are “rewarded” with a discount if they do not make any claims during their policy year.

^{Note: The information used for comparisons is based on data from the respective insurers' websites as of 28 August 2024.}

What this means is that your premiums may be affected if you make a claim from specified integrated shield plan riders. In such cases, you may find it is better off claiming your hospital bills from your company insurance first. This will avoid the possibility of your premiums increasing at renewal as a result of your claims made.

One thing to note is that while Singlife has not implemented claims-based pricing, there is a no claim discount on their rider premiums. There is a 15% discount on Singlife Health Plus premiums for the existing policyholders who have a maximum claim of $1,000 over the last two years. It also applies to the policyholders who have been insured with Singlife for no less than 2 years if there are no claims or claims less than S$1,000 during the assessment period. Policyholders who make a claim and no longer fulfil the eligibility conditions may see their premiums increase at renewal with the removal of the no claim discount on their rider premiums at renewal.

2. Comprehensiveness of company insurance

Ask yourself these few questions when thinking about whether to use your company insurance for your hospital bills:

How comprehensive is your company insurance?

If you are looking to seek treatment in a private hospital, check if your company insurance offers coverage for private hospitals, and what is the maximum benefit limit. It may also be possible to claim from your company insurance first up to the policy limits, then claim the remaining amount from your other insurance.

Is there any co-payment required?

With an Integrated Shield plan rider, you may only need to co-pay 5% of your hospital bills with this capped at $3,000 each policy year for treatment by panel providers. No deductibles are required with an Integrated Shield rider. Check if your company insurance is able to offer similar coverage.

What is the maximum coverage offered?

With integrated shield plan, the limit per policy year can go up to $2.5 million. Can your company insurance provide such high claim limits?

Will I need to make an upfront cash deposit?

Private insurers are able to issue a Letter of Guarantee (LOG) to selected hospitals to fully or partially waive the upfront cash deposit required by hospitals for hospitalisation or surgery. Can your company insurance also provide a LOG or will you need to make an upfront cash deposit upon admission?

Claim from your company insurance if they are able to provide you with satisfactory coverage. Otherwise, you may be better off making a claim from your Integrated Shield Plan to get treated at your chosen hospital and ward class.

3. Annual policy limit

Annual policy limit of integrated shield plans can be high, and may go up to $1 million for Class A plans, or $2.5 million for private hospital plans. However, an unexpected accident can be costly. Claiming from your company insurance first, if applicable, allows you to preserve the claim limit from your integrated shield plans. This ensures that you are still within your annual policy limit should you need to utilise your integrated shield plan again within the same policy year for an unexpectedly high medical bill.

Additionally, did you know that crossing over into a new policy year does not necessarily refresh your annual policy limit? For example, if you are hospitalised for less than 12 months, you may only be entitled to the annual policy limit of one year even if your period of hospitalisation crosses into the next policy year.

Your Key Considerations

Claims Process: Evaluate the ease of claiming (e.g. how much administrative work is required on your end) and potential processing times.

Reimbursement Time: Consider how quickly you can expect to receive reimbursement from each insurer.

Policy Documents: Review the terms and conditions of both your company insurance and IP to understand their specific coverage and limitations.

By understanding your company insurance and IP coverage, you can effectively supplement your protection and ensure you're adequately covered for healthcare expenses.

Our Recommendation

1. Prioritise Company Insurance

If your company offers comprehensive hospital insurance and this is able to cover for your hospital bills, then you may make a claim from your company insurance first. This allows you to preserve your annual policy limits, and also prevents your premiums from being affected by a claim (if applicable). Familiarise the claims procedures and conditions for both your company and Integrated Shield Plan (IP) to ensure that you understand the impact of making a claim from either policy.

2. Integrated Shield Plan (IP)

If your IP rider is not based on claims-based pricing, it may be more convenient to claim from your IP for your hospitalisation. This is because the claim process for IP is relatively seamless, with the hospital settling most of the administrative work on their end.

Additionally, if coverage offered by your company insurance is limited (e.g. out-of-pocket costs needed, upfront cash deposit at point of hospital admission, and/or policy limit cap), ensure that you supplement your coverage with IP plan and riders. This will help to cover any potential outstanding costs that you may have after claiming from your company insurance.

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^{Information obtained from:}

^{https://www.businesstimes.com.sg/wealth/five-seven-insurers-jack-private-hospital-premiums-under-integrated-shield-plans-some-double-digits}

^{https://www.income.com.sg/health-insurance/enhanced-incomeshield}

^{https://www.moh.gov.sg/docs/librariesprovider5/integrated-shield-plans-documents/april-2024/v3-comparison-of-ips-(apr-2024)---pvt.pdf?sfvrsn=ecdd2920_1}

^{https://www.moh.gov.sg/healthcare-schemes-subsidies/medishield-life/comparison-of-integrated-shield-plans}

^{https://www.prudential.com.sg/products/health-insurance/medical/claims-based-pricing}

^{https://www.aia.com.sg/en/our-products/health/medical-insurance/aia-healthshield-gold-max/claim-based-pricing}

^{https://www.greateasternlife.com/sg/en/personal-insurance/our-products/health-insurance/great-supremehealth/cap.html}

^{https://singlife.com/en/medical-insurance/shield/no-claims-discount}

^{Information retrieved on 28 August 2024.}

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