Asked on 25 Dec 2020
I received my bill for my AXA ISP rider and it seems like the premium went up 2x - from $300 to $600 for Plan A (covers private) which is significant in my opinion.
Did a check and realised the new ISP (with 5% copayment) is cheaper at 300 plus. Of course, the caveat is that the 5% co insurance may potentially cost more if I were to get hospitalised.
So my question is, should I switch to the new ISP to save on the rider? Or continue with my old ISP for 100% coverage.
This is a very pertinent question that is faced by a majority of my clients. Currently, for those who are under the 100% plans, it mainly falls into two categories, Prudential and Non-Prudential. As we are the only company to employ a claims-based approach to ensure that premiums do not rise significantly, even with the 100% coverage, we are the most affordable to date.
The point which i share across always, is whether you feel that the 100% coverage is important in your personal portfolio. If yes, then continue to provision for the added costs. However, there is a possibility that you will be priced out of the 100% coverage, as most companies are now shifting towards cost-mitigation in terms of hospitalisation claims. Unfortately, your shift to the 5% plan, would be a sooner or later proposition, if there is a continued trend of increased premiums.
Hope i was able to address your queries!
26 Dec 2020
Hi Duane, Thanks for the reply. So from what I gathered, there is a good chance the premium for the old ISP rider will continue to rise based on increasing health care costs to the point whereby it makes more sense to switch to the new ISP? Its tough to determine if 100% coverage is important to me. If I have a $100,000 bill, 5% co insurance would be $5000 which is definitely much higher than the rider. However all this is said in hindsight.
27 Dec 2020
Yes you are correct. The most common cited explanation is increased premiums due to medical inflation, but when premiums have risen significantly over the past 3 years, the percentage increase does not commensurate with medical inflation. In any case the 5% co-pay plans, have a stop-loss feature, usually if you visit the insurer's panel doctors. The stop loss is capped at $3K. The situation will require monitoring, but if your personal financial portfolio is being hindered by substantial increases on a YoY basis, its time to review solutions that you can take at that point in time.