Medishield Life…Should I Remain or Upgrade?

From 1st November 2015, all Singaporeans and Permanent Residents will be covered under Medishield Life.  Recently, there have been much discussions about Medishield Life and because of this, many have started to ponder upon this question:” “Do I really need to stay in a private hospital or a single bed ward?”.  This is because if we want our insurance to cover up to private hospital stays or single bed wards in government hospitals, we will need to “top up” and pay additional premiums to upgrade our Medishield Life coverage.

There is much sense in considering to upgrade the coverage just as there is a sound logic to not upgrade especially with concerns over affordability of premiums.  This is a decision with no right or wrong answer, only an answer that is suitable to the individual after considering both the needs and the wants.

If all we need is medical attention when we lose our health, there is really no necessity to consider an upgrade as Medishield Life will provide “universal coverage”.  This means that every Singaporean and permanent resident will be covered for all illnesses including pre-existing ones, and the coverage is for life.  However, if we want to have medical attention that comes with more comfort, coverage and control, it will be necessary to upgrade.

From my experience working with clients, I have come to an understanding about how to help people decide on what is suitable and I would like to share it with you in this article.

Here are 3 self-checks to see if you should remain with Medishield Life or upgrade:

1. ComfortIs sufficient and comfortable rest important to me?

This topic has been raised up often in discussions with clients and here are some of their first hand experiences when they stayed in a Restructured Hospital:

“My wife was admitted to hospital and she only has a basic Medishield plan.  I chose the B1 ward as she was afraid of the hot weather and B1 was the lowest ward with air conditioning. As she was unconscious at that time, I wanted to stay with her. However I was not allowed to, because the ward was for ladies, and they do not allow a male to stay in the ward. After much appeal, I was allowed to stay with conditions – the curtains must be closed.” — — ME Lim, 60

“My child was admitted to hospital and I chose the B2 ward for her. It was a difficult experience for me, as there was not enough space for me to stay by her bedside. There were 5 other babies/toddlers in the ward who were sick. There would inevitably be coughing and crying and my child was unable to rest well because of that.” — SW Wong, 34

It’s a question we all have to ask ourselves – what level of comfort are we accustomed to?  Not too sure because you’ve never been hospitalised before?  You can start by looking at how you plan for your holidays currently –If money is not a problem, do you prefer a 5-Star hotel or a basic “Bed and Breakfast” when you go for your holidays?

This will give you an idea on how much personal space, privacy and comfort you want should you be hospitalised.

2. CoverageDo I want to spend money on Pre-Hospitalisation and Post-Hospitalisation Expenses?

Often before hospitalisation, we will go through a few rounds of consultations and a series of tests before it can be determined what type of treatment is needed.

After we are discharged, we will usually go back to the attending doctor for follow up consultations and reviews to check and ensure that the recovery is good.

Medishield Life does not cover for pre and post hospitalisation expenses thus you have to use your savings to pay for these bills.

Sometimes, these “aftermath bills” may come up to a hefty sum.  For example, using medical claims records from one insurer, pre and post hospital treatment can be as high as S$53,640.

As such, we need to ask ourselves, do I have enough savings to cover for my pre-hospitalisation and post-hospitalisation expenses? If yes, is it painful to set aside your hard earned savings for this purpose?

3. ControlWhich is more important to you – affordable premiums or control over treatment choices?

The limit for Medishield Life claims per year is capped at $100,000.  This means that if your bill comes up to $150,000, you will have to fork out $50,000 in cash.  On top of that, there are sub-limits in each claim category as well as pro-ration factors for higher-than-entitled wards such as Government/Restructured Hospitals Class A or Private Hospital Wards.  These can increase the amount of personal cash outlay.

Is $100,000 a year enough? To understand this, we can use some figures for reference.

Here are examples of three large claims that an insurer paid out between 2012 and 2014.
These three examples show just how much hospitalisation and medical treatments bills can snowball to.

Claim amount higher than amount incurred as it includes additional hospitals cash benefits payout from MyHealth Plus rider

After looking at the claim amounts, what do you think?

With these in mind, you will be able to determine if $100,000 yearly limit is enough for yourself.  More importantly, do you want to be caught in a dilemma between choosing your preferred doctor and treatment versus choosing a treatment option based on what your insurance can cover due to claim limits?  This is because when there is a limit to how much your insurance can cover, there will also be a limit to how much medical services you can consume.

In summary, choosing the right medical insurance plan is always a challenge.  Your affordability must always be the most important consideration and Medishield Life by itself is already able to provide comprehensive and universal coverage. However, if you want to explore the option of upgrading, there will be many factors to consider and options to understand.  To begin with, getting oneself familiarised with the terms and lingo is already a time and effort consuming challenge.

I hope that I’ve made it a little easier for you in understanding how to make a thoughtful decision when it comes to your medical insurance decisions.  If all of these are still rather stifling, I have compiled a Guide to MediShield Life and Integrated Plans Comparison that you can download here. Hope this will help you in your decision.

As John F. Kennedy said… “The time to repair the roof is when the sun is shining.”  =)

Article by Lois Chua, ChFC

Email: lois.chua@proinvest.com.sg

<strong>Lois Chua</strong> (ChFC)
Lois Chua (ChFC)Financial Consultant

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