Medishield Life: 5 Common Confusions and 3 Decisions to Make
If you haven’t been living under a rock, you would have heard about Medishield Life, the new national health insurance that covers all Singaporeans and PRs for life, administered by the Central Provident Fund (CPF) Board. The scheme is compulsory (i.e. cannot opt out) and the coverage is based on what you will be charged for subsidised treatments in the C and B2 class wards in a public hospital.
While it was launched on 1 November 2015, you wouldn’t be blamed for thinking it was part of the recently announced Budget as debate around it has yet ceased. This could be partly attributed to the impending launch of the Standard Integrated Shield Plan, developed in response to the MediShield Life Review Committee's recommendation in 2014, to provide a "no-frills" option for a tier of coverage above MediShield Life at affordable premiums.
With the plethora of terms and options floating around, it has just made it harder to decipher and decide. In this post, we clarify 5 common confusions and strip this whole thing down to 3 decisions you have to make.
5 Common Confusions
1. Medishield Life, Medishield, Medisave... Argh! What's the difference?
We know, it is easy to get them mixed up, thanks to the Government parlance and fondness for reusing names. Let’s clarify this once and for all.
Medishield was the previous national health insurance plan that was replaced by Medishield Life. The main differences between the two are:
Medishield only provides coverage up to age 92 while Medishield Life provides coverage until death, i.e. no lifetime claim limit.
Medishield Life covers pre-existing medication conditions such as HIV or congenital disorders, while previously, some people were not covered under Medishield because they were excluded based on pre-existing conditions. Medishield Life is what has known as universal coverage.
MediShield Life offers higher claim limits for hospital bills and outpatient cancer treatments like chemotherapy.
On the other hand, Medisave is one of the accounts in your CPF, not an insurance plan at all. It can be used to pay for your medical needs and even the premiums for your MediShield Life plan.
2. Do I also get an Integrated Shield Plan as part of Medishield Life?
The other term you will often hear mentioned in the same breath as Medishield Life is Integrated Shield Plan or Integrated Plan (IP). From here arise the next confusion.
As a Singaporean or PR, you are automatically covered under Medishield Life but not an Integrated Shield Plan.
An Integrated Shield Plan (IP) is actually a private insurance plan that people can buy for additional coverage on top of Medishield Life. You can choose to buy an IP that is pegged to treatments at public hospital class A, class B or at private hospitals. There are currently five IP providers – AIA, Aviva, Great Eastern, NTUC Income, and Prudential, with AXA coming onboard 1st May 2016.
While Medishield Life covers everyone, underwriting for the additional private insurance coverage will still be necessary and private insurers can refuse or exclude cover for pre-existing medical conditions. It doesn't mean that you are willing to pay for the extra premium, you will automatically be upgraded to an IP.
3. If I have an Integrated Plan on top of Medishield Life, will I be paying for two policies separately, and claim separately from them when the time comes?
The premiums that you will be paying for your IP usually includes that for Medishield Life, and you will pay one single premium directly to your insurer. They function as one policy, even for claims.
The total premium is derived from adding together the Medishield Life portion and the IP portion. The premiums for Medishield Life portion depends on your age, monthly income per person in your household, the annual value of your residence, and whether you have any serious pre-existing conditions. You can get an estimate at www.MediShieldlife.sg/calculator. The premiums for your IP depend on the level of coverage you choose to have, as well as whether you opt for coverage of the deductible and co-insurance portions.
The premium can be paid using your Medisave account (including the IP portion), subject to the Medisave additional withdrawal limits (AWL). All Singapore Citizens will receive subsidies over four years to help with the premium increases under MediShield Life, even if you are on a private IP. However the subsidies you get will be based on the Medishield Life component of your plan.
4. So, do I have to pay anything at all under Medishield Life?
Yes, co-payment is not eliminated as there are claim limits for MediShield Life which are based on what you would be charged in a B2/C class ward in a public hospital. You will have to pay anything above that on your own.
You would also have to pay the deductible before the Medishield Life payout kicks in. So if your hospital bill is $1000, you will not be able to claim under Medishield Life if your deductible is $1500. However you only need to pay the deductible once every policy year.
| Age 80 & below | Age 81 & above | |
|---|---|---|
| Class C | $1,500 | $2,000 |
| Class B2 & above | $2,000 | $3,000 |
The other payable component is the co-insurance, which is a percentage of the claim amount you have to pay on top of the deductible. Under MediShield Life, the co-insurance rate ranges from 10% to 3% as the bill size increases.
5. With Medishield Life now, there's no point keeping my existing Integrated Shield Plan. Why should I double-pay?
For those who already have an IP prior to 1 November 2015, there is no duplicate coverage. MediShield Life forms the base component of your IP.
Whether you find Medishield Life sufficient for your needs depends on what you are looking for in your insurance coverage, such as being able to choose your own doctor or choose a better level of healthcare service as determined by the type of ward you stay in.
Below, you will find a simple flowchart to help you in this decision process.
3 Decisions to Make
With this renewed clarity, you can now better assess which level of health insurance coverage to take up. Here’s something to help you, with 3 pertinent decision points to guide your choice.
Q1. What ward would you likely stay in if you were hospitalised, or put another way, what level of healthcare service would you want?
If you are content with class C/B2 at a public hospital, you can stay with Medishield Life coverage. If you prefer to be treated at the B1/A class or private hospital, then you need to buy additional private insurance under an Integrated Shield Plan. Which leads us to the next question.
Q2. Would you want an “as-charged” plan?
An “as-charged” plan covers all expenses incurred for your hospitalisation and treatment. You just need to pay for your deductible and co-insurance portion. This is as compared to a plan with itemised sub-limits in which you can claim only up to a pre-determined amount for individual expense items and pay for anything above that from your Medisave or out of your own pocket.
For class A or private hospital cover, your insurer will typically advise an “as-charged” plan as the potential expenses incurred per item is much higher, which means you will likely hit your Medisave withdrawal limits and have to pay more out of pocket if you have claim limits.
Another less known benefit for having an “as-charged” plan is that typically (subject to eligibility conditions), if you are covered under an “as-charged” plan, you are able to get a Letter of Guarantee from your insurer in the event of a hospital admission, which will entitle you to a waiver of the pre-admission deposit, fully or partially.
Q3. Would you want 100% coverage?
This means you are covered even for your deductible and co-insurance, eliminating any co-payment by you. This is achieved with the purchase of a rider on your IP. However do note that the premiums for your rider cannot be paid using your Medisave.
A decision flowchart to facilitate your thought process
This is a rather quick-and-dirty way to take you through the thought process of deciding whether you want to get additional coverage above Medishield Life and at what level. It is still best for you to sit down with your insurance agent/financial adviser to scrutinise the features of each plan and determine the affordability of the premiums for the long-term, before deciding which plan suits you, your situation and goals.
Here are two useful links if you have more questions:
And if you need further clarification, you know you can always drop me a note here.
