Understanding Medishield Life and Integrated Shield Plans

There is a saying that you can afford to die but not afford to get sick in Singapore. This is true regardless if we are poor or rich. Unless you are extremely rich, hospital bills will be a problem for most of us here. Once we are diagnosed with some major illness such as cancer or other life threatening illnesses, it will probably wiped out most of our savings.

An important part of financial planning is insurance. In fact, getting insurance should come before starting any investments. One of the key insurance to get is healthcare insurance to cover our hospital bills as hospital bills can add up to quite a huge sum of money. In Singapore, we have social security schemes already in place such as Medisave, Medishield life, Medifund, Eldershield etc. These terms may be familiar to you but maybe most of us are not really sure what it really means and which scheme we have or to get? In this article, let me demystify the terms and break it down into easy to understand concepts.

What is Medisave?

Let's start off with Medisave. This is what all of us have as long as we are Singaporean or Singapore PR. The Medisave scheme is under the CPF. For our CPF, we generally have 3 main accounts:

1. Ordinary Account (OA)
2. Special Account (SA)
3. Medisave Account (MA)

Medisave account falls under part of the 3 main accounts in CPF. Every month, a portion of our salary going into the 3 accounts with Medisave being one of them. Our employer contributes additional to our Medisave account also. This is essentially our healthcare savings account which we can use to pay healthcare insurance premiums and also for some healthcare bills.

Medisave Scheme is a national healthcare savings scheme designed to help us pay hospitalisation expenses incurred in Class B2/C wards in restructured hospitals. Medisave savings can also be used to pay for certain outpatient treatments like chemotherapy, radiotherapy and dialysis. You can use Medisave savings to pay for your own or your immediate family members’ hospitalisation expenses, day surgery and selected outpatient treatments.

For the list of claims you can make using your Medisave, you can refer to MOH website here. 

What is Medishield and Medishield Life?

Medishield as its name suggests, is a shield plan which protects us from high hospital bills. The word shield will imply it is a insurance plan. Medishield covers basic hospitalisation bills in class B2 and C wards. Medishield has been enhanced with the new Medishield life which covers us for life. Medishield and Medisave are different. Medisave is our own savings money while Medishield life is an insurance plan. The claim limits and claimable items for Medishield life is as illustrated below:

Credit: https://www.moh.gov.sg/content/moh_web/medishield-life/about-medishield-life/medishield-life-benefits.html

Click image to enlarge

What are Integrated Shield Plans?

As we know from the above, Medishield Life does not cover all of our hospital bills. It is only a basic healthcare safety net. If we want to cover our hospital bills fully, there are ways to do it in Singapore. An integrated shield plan allows us to cover more or fully our hospital bills even for Private hospitals.

An integrated shield plan, in laymen terms, is the private insurance we get from all other private insurers such as AIA, NTUC Income, AXA, Aviva etc. Many of us may already have private insurance but some of us may not fully understand what coverage we are getting?

To understand more on the coverage of the integrated shield plan, let me explain a few simple terms. In an integrated shield plan, there are a few things we should look out for:

1. Is it covered "As charged" or only a percentage of the hospital bills?
2. What is the deductible?
3. What is the co-insurance?
4. Any riders we have?

The above terms may sound complicated but it can be easy to understand in the next 2 mins in this article. Let me explain further. 

As Charged

Covering "As Charged" is an important factor in the integrated shield plan. "As charged" means it will cover any hospital bills as it is charged. This means you can claim 100% of the bill as charged to you. 

Deductible and Co-insurance

Having an integrated shield plan with 'As charged' doesn't mean you can claim your hospital bills fully. In an integrated shield plan, there will always be a deductible and co-insurance portion which we need to take note. 

The deductible is the amount we need to deduct from our the hospital bills before we can make any claims. If the deductible is $3000, this means we have to deduct $3000 from our hospital bills before we can claim the remaining amount. Lets say if our hospital bill is $10,000 and deductible is $3000, the amount we can claim is only $7000 ($10,000-$3000). 

The co-insurance is the amount we have to co-pay before we can make any claims. Similarly to the deductible, we have to deduct this co-insurance portion before we can claim the remaining amount. Co-insurance is mostly in percentage so if our hospital bill is $10,000 and co-insurance is 10%, the amount we can claim is only $9000 ($10,000-$1000). The $1000 is the co-insurance which is 10% of the $10,000 hospital bill.

Riders 

Insurance terms can be confusing and it took me quite awhile to understand it as well. Riders as a word doesn't mean anything if we do not understand it for insurance purposes. To cover our hospital bills 100%, riders are the key to make it happen. As mentioned earlier, an integrated shield plan will always have a deductible and co-insurance portion. This is the portion we have to deduct from our hospital bills before we can claim the remaining amount.

Riders can override the deductible and co-insurance portion. By purchasing riders, we can remove the deductible and co-insurance portion from our plan and claim our hospital bills fully. 

How to know if my integrated shield plan covers my hospital bills fully?

The premiums of an integrated shield plan can be paid by Medisave. However, the premiums for the riders as mentioned above cannot be paid using Medisave. If you're only using Medisave to pay for your integrated shield plan, most likely you will not be able to claim your hospital bills fully. 

If you use both cash and Medisave to pay for your integrated shield plan premiums, then you may be able to claim your hospital bills fully. Check if you have a plan which covers 'As charged' and also riders to override the deductible and co-insurance. If you have all these, chances are you will be able to claim your hospital bills fully. 

Of course, there are always general exclusions in any insurance plans so check your plan properly before you incur any huge bills. Your financial adviser will be able to advise you on what your plan covers exactly and in the event of a claim, he or she will be the one helping you to process.

I hope this article demystifies some complex terms for the healthcare schemes we have in Singapore. Hospital bills can be scary if we're not prepared. If we're prepared, then we will have a peace of mind no matter what happens. Still, it is important to stay healthy and happy in life and prevent any illnesses in the first place.

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