Singapore's medical insurance scheme aims to achieve two important objectives - that no one would be left without proper care, and that those who seek treatment must also share part of the costs. As a result, those who buy private plans will end up with not one or two but three types of policies with different functions.
1. MediShield Life
This is a compulsory national health insurance plan administered by the Central Provident Fund Board, forming the foundation of all medical insurance here.
Its annual premium is affordable - the interest earned by the funds in your MediSave account alone is more than enough to pay for this if you have been dutifully contributing to it during your working years.
MediShield Life payouts are pegged at B2 or C ward types, so those who stay in higher-class wards or seek treatment at private hospitals will have to foot the additional charges if they do not have other insurance plans.
That said, those who have problems settling even their basic bills can apply for MediFund, the national safety net that ensures no Singaporean will be deprived of medical care.
2. Integrated Shield Plan and rider
These two plans are sold by insurers and over 70 per cent of people here buy them so that they can be covered even for private hospital treatment. But why do you need to have two policies and not just one?
The Integrated Shield Plan (IP) works by taking care of any extra expenses that are insufficiently covered by MediShield Life. But it does not cover every cent because there are quite substantial fixed sums - known as deductibles and co-insurance - that patients have to pay.
This is where the rider or supplementary policy comes in - it will pay for everything except the co-payment sum.
Take a patient who has a $65,000 private hospital bill. He has to pay a fixed deductible of $3,500 and a further 10 per cent of the remaining bill, or $6,150. This means he has to pay $9,650, while the combined MediShield Life and IP will pay the remaining $55,350.
If he has a rider with a 5 per cent co-payment share of the total amount, he does not need to pay $9,650, but only $3,250.
Such riders come with additional privileges - people who seek treatment with the insurers' panel of doctors do not need to pay more than $3,000 in a policy year.
3. Premiums for IPs
The pricing of medical policies is based on age. The IP's annual premium starts at less than $200 for children and increases gradually to over $200 and $300 for those in their 20s and 30s.
For most insurers, the price hike starts the moment you are in your 40s; the cost goes up to $600-plus and over $1,000 when you cross the 50-year mark.
From then on, the price will increase by almost $100 every year and bump up significantly after crossing the milestone of each decade - close to $2,000 at 61, up to $3,500 at 71, over $6,000 at 81, and more than $9,000 at 91.
You can use a few hundred dollars from your MediSave account to defray the costs of such policies - $300 for age 40 and below, $600 for 41 to 70, and $900 for 71 and older.
4. Premiums for riders
On average, the rider costs the most and you have to pay entirely in cash.
As the rider is meant to cover the "excess" portion of the bill, insurers have more leeway to tweak the terms to encourage their customers to seek treatment at their panel of doctors and hospitals.
For instance, all riders will cap the co-payment amount at $3,000 if you go to the insurers' panel of doctors or seek their prior approval first. Otherwise, you will pay 5 per cent or 10 per cent of the bill, plus other charges, depending on the terms of the rider.
Three insurers - Prudential, AIA and Great Eastern (GE) - have started a claim-based model for such riders to give discounts to those who stay healthy, and to encourage customers to go to public hospitals or private hospitals on the panel (for Prudential).
Those who abide by the terms will pay lower or marginally higher premiums, but those who choose non-preferred private hospitals will see their premiums double after only one treatment. Consecutive treatment at the same hospitals will cause this higher premium to remain (AIA), or go up 2.5-fold (GE) or threefold (Prudential).
Such increases are significant because riders cost more than IPs, especially if you are over 50.
5. Cost of annual premium
Unlike life policies, which allow you to pay lower premiums by choosing lower insured sums, you cannot ask for lower premiums by opting to lower the insured sums for your medical plans.
If you want to pay up to 40 per cent lower premiums, you can downgrade your private hospital plan to one that covers single wards in public hospitals, or one that covers the insurer's panel private hospitals (Prudential).
Unlike the premium for life policies, which remains the same as you age, medical insurance will become more costly as you age.
This is because people usually need some form of medical care as they become older, so the premiums go up for seniors as the chances of them making claims are higher. This is how much you need to pay as you age. The annual sums are derived by adding the premium of MediShield Life, which is the lowest, and the average costs of the standard IPs and riders of all six major insurers here (see table).
50 years old: $2,085
60 years old: $3,880
70 years old: $6,900
80 years old: $11,830
90 years old: $15,395
6. What you can do
You should know that you cannot avoid paying high premiums by switching insurers because the annual savings will not be significant.
Indeed, if medical insurance is made portable - meaning you can change policies without losing coverage for existing conditions - the annual premium for such plans is likely to be even higher than the current rates.
So what happens if you have problems paying such high premiums?
Consider downgrading to a cheaper public or preferred hospital plan first before cancelling your policies.
Choosing a public plan does not mean you cannot go to a private hospital - you can still do so if you are willing to pay a higher co-payment share of 35 per cent of the bill for some policies.
Another way to save on costs is to drop the rider and avoid single-bed wards to keep the deductible and co-insurance portion lower.
Ultimately, just like your own health, it pays to take more interest in your financial health.
Work at getting it into tip-top condition early so that you can avoid the money-not-enough disease in old age.
Singapore's medical insurance scheme aims to achieve two important objectives - that no one would be left without proper care, and that those who seek treatment must also share part of the costs. As a result, those who buy private plans will end up with not one or two but three types of policies with different functions.
1. MediShield Life
This is a compulsory national health insurance plan administered by the Central Provident Fund Board, forming the foundation of all medical insurance here.
Its annual premium is affordable - the interest earned by the funds in your MediSave account alone is more than enough to pay for this if you have been dutifully contributing to it during your working years.
MediShield Life payouts are pegged at B2 or C ward types, so those who stay in higher-class wards or seek treatment at private hospitals will have to foot the additional charges if they do not have other insurance plans.
That said, those who have problems settling even their basic bills can apply for MediFund, the national safety net that ensures no Singaporean will be deprived of medical care.
2. Integrated Shield Plan and rider
These two plans are sold by insurers and over 70 per cent of people here buy them so that they can be covered even for private hospital treatment. But why do you need to have two policies and not just one?
The Integrated Shield Plan (IP) works by taking care of any extra expenses that are insufficiently covered by MediShield Life. But it does not cover every cent because there are quite substantial fixed sums - known as deductibles and co-insurance - that patients have to pay.
This is where the rider or supplementary policy comes in - it will pay for everything except the co-payment sum.
Take a patient who has a $65,000 private hospital bill. He has to pay a fixed deductible of $3,500 and a further 10 per cent of the remaining bill, or $6,150. This means he has to pay $9,650, while the combined MediShield Life and IP will pay the remaining $55,350.
If he has a rider with a 5 per cent co-payment share of the total amount, he does not need to pay $9,650, but only $3,250.
Such riders come with additional privileges - people who seek treatment with the insurers' panel of doctors do not need to pay more than $3,000 in a policy year.
3. Premiums for IPs
The pricing of medical policies is based on age. The IP's annual premium starts at less than $200 for children and increases gradually to over $200 and $300 for those in their 20s and 30s.
For most insurers, the price hike starts the moment you are in your 40s; the cost goes up to $600-plus and over $1,000 when you cross the 50-year mark.
From then on, the price will increase by almost $100 every year and bump up significantly after crossing the milestone of each decade - close to $2,000 at 61, up to $3,500 at 71, over $6,000 at 81, and more than $9,000 at 91.
You can use a few hundred dollars from your MediSave account to defray the costs of such policies - $300 for age 40 and below, $600 for 41 to 70, and $900 for 71 and older.
4. Premiums for riders
On average, the rider costs the most and you have to pay entirely in cash.
As the rider is meant to cover the "excess" portion of the bill, insurers have more leeway to tweak the terms to encourage their customers to seek treatment at their panel of doctors and hospitals.
For instance, all riders will cap the co-payment amount at $3,000 if you go to the insurers' panel of doctors or seek their prior approval first. Otherwise, you will pay 5 per cent or 10 per cent of the bill, plus other charges, depending on the terms of the rider.
Three insurers - Prudential, AIA and Great Eastern (GE) - have started a claim-based model for such riders to give discounts to those who stay healthy, and to encourage customers to go to public hospitals or private hospitals on the panel (for Prudential).
Those who abide by the terms will pay lower or marginally higher premiums, but those who choose non-preferred private hospitals will see their premiums double after only one treatment. Consecutive treatment at the same hospitals will cause this higher premium to remain (AIA), or go up 2.5-fold (GE) or threefold (Prudential).
Such increases are significant because riders cost more than IPs, especially if you are over 50.
5. Cost of annual premium
Unlike life policies, which allow you to pay lower premiums by choosing lower insured sums, you cannot ask for lower premiums by opting to lower the insured sums for your medical plans.
If you want to pay up to 40 per cent lower premiums, you can downgrade your private hospital plan to one that covers single wards in public hospitals, or one that covers the insurer's panel private hospitals (Prudential).
Unlike the premium for life policies, which remains the same as you age, medical insurance will become more costly as you age.
This is because people usually need some form of medical care as they become older, so the premiums go up for seniors as the chances of them making claims are higher. This is how much you need to pay as you age. The annual sums are derived by adding the premium of MediShield Life, which is the lowest, and the average costs of the standard IPs and riders of all six major insurers here (see table).
50 years old: $2,085
60 years old: $3,880
70 years old: $6,900
80 years old: $11,830
90 years old: $15,395
6. What you can do
You should know that you cannot avoid paying high premiums by switching insurers because the annual savings will not be significant.
Indeed, if medical insurance is made portable - meaning you can change policies without losing coverage for existing conditions - the annual premium for such plans is likely to be even higher than the current rates.
So what happens if you have problems paying such high premiums?
Consider downgrading to a cheaper public or preferred hospital plan first before cancelling your policies.
Choosing a public plan does not mean you cannot go to a private hospital - you can still do so if you are willing to pay a higher co-payment share of 35 per cent of the bill for some policies.
Another way to save on costs is to drop the rider and avoid single-bed wards to keep the deductible and co-insurance portion lower.
Ultimately, just like your own health, it pays to take more interest in your financial health.
Work at getting it into tip-top condition early so that you can avoid the money-not-enough disease in old age.