Is Medishield Life Sufficient? Should you upgrade your hospitalization insurance?
When it comes to your very own health and medical attention, don’t we all want to recuperate and rest well especially if we have been admitted to the hospital? Just the thought that you will be in good hands and well taken cared of, without having to go through all that unnecessary financial stress would be really comforting. But not many of us are aware of this benefit that the government has put into place for Singaporeans and Permanent residents in Singapore.
Medishield Life, formerly known as Medishield until 1st November 2015, is the government’s way of insuring all Singapore citizens and permanent residents have the necessary medical coverage they need. What is so special about this mandatory comprehensive health insurance is that it has no maturity unlike any other third party insurance policies out there. At the same time, it provides a lifelong coverage regardless of your age or any pre-existing medical conditions that you may have. Premiums are also paid through your Medisave account, so you don’t need to fork out any upfront cash for it.
However, not all of us have the same needs. Medishield Life merely acts as a first layer of safety net, a general medical coverage for Singaporeans or PRs who do not have any. It is a good initiative taken by the government to ensure that everyone will receive at least the bare minimum basic healthcare and enjoy financial relief for those from a lower income bracket, along with other medical subsidies.
If you were to solely rely on the Medishield Life, you will only be entitled to Class B2 and Class C wards in all public government hospitals. So as you understand more about this scheme, you should also have a think about whether the Medishield Life coverage is sufficient for your needs.
BENEFITS OF MEDISHIELD LIFE
SHOULD YOU UPGRADE YOUR HOSPITALIZATION INSURANCE?
Jasmine Tan, AVP of Chamberwealth explains that the coverage offered by MediShield Life has its limitations. “One should ask themselves whether is it more affordable to pay for a hospital bill which costs $3,000, or one that costs $300,000?,” said Jasmine. “Medishield Life may be sufficient when the bill is smaller, but an upgraded or integrated hospital insurance will comes in very handy when it is a huge bill that may cost one a few hundred thousand dollars. Take for example a stroke patient, the hospital bill for doing two surgeries and staying in an ICU for about a month will cost as much as $300,000 before subsidies.”
Before thinking if you should upgrade your hospitalization insurance or not, here are a couple of questions that should be carefully consider that would help make better decisions when it comes to your financial planning.
- How much do you want to be covered for?
- How much premium are you willing to pay for (even in the future)?
- Do you want to pay for any hospitalization bills whenever you are admitted?
- Do you want to have the flexibility when it comes to choosing hospitals/doctors/wards?
- Is the maximum claim limit (S$100,000/Year) enough for me?
1. How much do you want to be covered for?
By default, the Medishield Life insurance policy only provides subsidised treatment in all public hospitals in all B2 and C wards (subjected to availability). A class B2 ward consists of 6 beds with no aircon and no TV, while the class C ward can fit up to 8 – 10 beds and is naturally ventilated with no TV as well.
NOTE: Medishield Life is only eligible to use in ALL public hospitals for large hospital bills and costly outpatient treatments.
2. How much premium are you willing to pay for (even in the future)?
Every Insurance would have its own premiums to be paid for, there is no exception when it comes to Medishield Life. But what is special here is that, your Medishield Life premium is being deducted fully off your Medisave account which is being contributed partially by your CPF whenever you receive your monthly salary. It is also noteworthy that as you age, the likelihood of your premiums tend to increase and is being justified as you are more prone to being hospitalized.
Most policyholder do not pay much attention when it comes to affordability. Sure you are a working adult and as long as you working and your monthly salary is being credited into your bank account, CPF is being paid for, there will be money in your medisave. But what happens when you are nearing retirement and the premiums are only increasing but you have almost depleted your medisave for surgeries and treatments earlier on? If you decide to upgrade your basic plan to an integrated shield plan, you have to take into consideration that the you will be able to set aside this couple of hundreds when you are unemployed so as to sustain this policy and continue to enjoy the coverage that you are paying for. If you decide to downgrade your plan if the option is still available, there will be no refund of the premium difference at all.
The above chart shows how much of your medisave are you able to utilize to pay off the premium of your Integrated Shield Plan (if you decide to upgrade)
3. Do you want to pay for any hospitalization bills whenever you are admitted?
Typically, before knowing that you will be hospitalized or not, you will have to go through various tests and doctor’s consultations before they would decide to ward you or not. Even after being discharged you still need to go back to visit the doctor for post hospitalization consultation and follow ups to ensure that you are undergoing recovery. All of these involve costs, and these costs can sometimes rake up to a substantial amount even before including the main surgery or treatment.
The question here to ask yourself is, do you have the disposable income to pay for the pre and post hospitalization consultations, tests and medications? If you want more coverage to help cushion these hospitalization bills, your premiums will naturally go up. Do you want to recover and rest at a peace of mind without fretting over the chunky bills that you will potentially incur? That is a question you should ask yourself.
4. Do you want to have the flexibility when it comes to choosing hospitals/doctors/wards?
Is there a need to have control over the flexibility to choose over any hospitals, be it private or public, the wards, be it first class or second class, or a public ward to be shared, and the doctors? Depending on the type of surgery you will be undergoing, some would much prefer a senior over a junior doctor to be attending to them. Another thing that should be considered is that as long as you want your hospital bills to be largely subsidized by Medishield Life, do you mind having to stay in a 6 bedded ward or a public ward that is at least 10 bedded while recuperating? All these would involve costs, what it means is that extra attention would equate to additional costs, more room for privacy and amenities would cost you as well.
If these are not of any issue to you, then you will do fine in a public hospital with doctors that will tend you you around the clock, and nurses that will be there to care for you as well.
5. Is the maximum claim limit (S$100,000/Year) enough for me?
Know your body well, because the maximum claim limit from Medishield Life is capped at S$100,000 per year. Hence if there were to be any major surgeries or treatment that goes beyond this amount, you will have to fork out the surplus yourself. Besides capping at a $100,000 per year, each sub categories have their own capped limits as well. Every individual has their own limitations and it works the same for hospitals as well, their machines and equipments do also cost them too, there is only so much of medical treatment you are able to receive at the end of the day. Hence, do evaluate and contemplate if a $100,000 a year is enough for you.
That being said, after considering the above few factors, you should be able to decide for yourself if you should upgrade your hospitalization insurance or not, or seek for an external third party insurance as a second safety net if your Medishield Life were to be depleted one day.