Critical Illness Planning – It Is Never About The Immediate Expenses. It Is About The Long Term Needs.
Singapore is an aging population, with the average life expectancy approximating at age of 83 years, ranking us third after Japan and Switzerland. We are now living longer than most people around the globe. All these are attributed to the 1st world medical technology advancement that we have and not forgetting the individual responsibility that everyone is taking on their own lifestyle habits. As such, it is not uncommon for us to overlook on the protection needs on critical illness. With prevention, is it really a guarantee that our health will be as good as it is now; forever?
Critical Illness is a cover that provides for 37 major critical illnesses as per listed by Life Insurance Association (LIA) with standardized definitions; in Financial Planning, we further categorize these 37 critical illnesses into 2 groups.
Depending on which group the illness is categorized in, the financial commitment to the medical bills differ. If you are a Singapore Citizen or Singapore Permanent Resident, you would think you are already fully covered for such medical bills because you have CPF MediShield Life and Integrated Private Shield Plans and/or Employee Hospitalization Plans. Well, it may not necessarily be so. There are some expenses that may not be covered. To name a few:
1. Prolonged treatment with long term follow up
In all the above-mentioned Hospitalization Plans, there is a restriction on how long one can reimburse on the post hospitalization expenses.
2. Test Drugs
Should the treatment prescribed be listed as a test drug, neither CPF MediShield Life nor IP Shield Plans will cover the cost of these drugs
These misconceptions are a concern because the occurrence of critical illness requiring long term follow ups are on a rise. Stroke, is one great concern, especially when we are an aging population. Stroke is a ‘silent life disrupter’ and how it affects not just the person diagnosed with it but also our loved ones.
Some Facts About Stroke
1. What is Stroke?
Stroke is a brain attack. It occurs when the blood supply to the brain is interrupted causing brain cells to lose their function thus leading to the symptoms and signs of stroke.
2. What Happens During A Stroke?
3. Does Stroke result in death?
Not always. Strokes that leads to death are likely due to bleeding in the brain from a ruptured blood vessel, rather than a blockage.
Where stroke is concern, it is not just a single medical professional that you need to consult but rather you would need, a Stroke Care Team.
Figure 1 : Stroke Care Team
Knowing what stroke is and how it probably comes about is one thing. On many occasions, being equipped with just knowledge is never enough. When these situations happen, the patient and their family face several issues.
- Hospitalization and Surgical Bills
- Rehabilitation Expenses
- Mobility and Daily Activity of Living
1. Hospitalization and Surgical Bills
Financing for an illness is often the biggest concern that Singaporeans has simply because of the raising healthcare cost. As mentioned above, it is not just a doctor that you would need but a team of Stroke Care Specialist to help you get on the road of recovery.
The average hospitalization bill due to stroke based on a B1-Ward in Government Hospital is as follow:
Table 1: Range of Hospital Bill Size Due to Stroke in Government Ward B1
Source : Total Hospital Bill Size – By Conditions/ Procedures | Ministry of Health Singapore, Abstracted on 27-Jun-2018
With the existing Integrated Private Shield Plans, if you had opted for the 100% coverage, this is of little concern. However, come April next year, insurance companies are removing the 100% coverage rider and for new riders in place of it will be a co-payment that policyholders will have to co-pay before any claims can be admissible.
Co-payment may not be a great concern because we have Medisave to pay for it. But this is where the real danger lies.
There is a common misconception that medical bills can be fully paid for using CPF-Medisave; there are limits imposed on how much our Medisave can be used for medical bills. These medical limits are usually sufficient for admissions into B2 and C Wards. However, anything above, it requires the cash top-up. These withdrawal limits follow by the Table of Operations; depending on the complexity of the operation. The withdrawal limits for stroke related treatment are as follow:
Table 2 : Range of Medisave Withdrawal Limits for Stroke Related Treatments
Source : Medisave Uses and Withdrawal Limits | Ministry of Health, Abstracted on 27-Jun-2018
Let’s look at a case study
Mr Tan suffered a stroke with no complications and he seek treatment in a Government B1-ward. However, he went to a simple procedure of inserting a shunt and he stayed in the hospital for 5 days in Government Restructured B1-Ward.
Assuming he has no rider to cover for any co-payments,
2. Rehabilitation Expenses
After the successful surgical procedure, to get back to almost your daily lifestyle habits, therapy sessions are required. However, studies have shown that “just three months after their discharge, four out of five patients stop going for their prescribed rehabilitation programme and a lack of rehab often results in the patient’s physical abilities deteriorating rapidly, turning them frail and often needing more frequent hospitalization later on.”
You may think that Rehabilitation Expenses are just referring to the cost of the therapies. But in truth, it is more than that. Cost of transport to Rehabilitation Centre was one of the deterring factors.
With challenges faced in movement, traveling by means of public transport like bus is out of the question. The mode of transport would either be by chartering a specialized cab (cost ranges from $25 to $80 per trip) used to ferry people who are wheel-chair bound or by means of taxi. Either way, the cost of transport increases exponentially. These therapy sessions are not just once but rather weekly or twice a week.
3. Mobility and Daily Activity of Living
Stroke leaves one feeling weakness in the limbs that are affected and one may not even be able to see to his/her own necessities. In the insurance industry, the Daily Activities of Living are as listed:
Figure 2: List of Activities of Daily Living
Source : MyCare and MyCare Plus – Aviva Singapore, Abstracted on 28-June-2018
In situations where you are unable to be self-sufficient, you will either need the help of your loved ones or employ someone like a domestic helper or private nurses to assist you. All three ways will affect the income and expenses of the family.
Table 3 : Estimated Cost of Domestic Helper, Private Home Care Nurse and Home Therapy Sessions
source:(1) Average Cost of Hiring Domestic Help in Singapore – iproperty.com.sg. (22 November, 2017). Retrieved 28 june, 2018.
(2) Homage – Quality Elderly Home & Nursing Care in Singapore. (2018). Retrieved 28 June, 2018.
Where one is bound to the wheelchair, your family may even need to make changes to the interior of your home to make movement around convenient for you.
Finances either make or break a family. In times where a loved one’s health is robbed, the last thing that you would want to fret over is the expenses involved. Transfer the cost to the insurance companies.
Review Your Financial Portfolio – Some Questions To Ask Yourself
1. Hospitalization Plans
Have you covered yourself up to the desired type of ward/ hospital in the event of any hospitalization?
2. Critical Illness Plans
Are you covered for just severe Critical Illnesses or have your insurance plans already provided for early to intermediate stage Critical Illnesses?
3. Disability Income Plans
Many people overlook this provision. As we have covered above, there may be additional expenses involved like transportation or added help in the family for care taking methods. Does your portfolio provide for this?
For people who are age 40 and above, this is what ElderShield is designed for. Have you reviewed this Long Term Care Planning?
4. Fruitful discussion with your spouse or any family member
As much as it is important for your Financial Portfolio to providing for all the necessary finances, it is important to discuss with your loved ones the care taking arrangement when that fateful day comes. Knowing how you want to be taken care of during that situation and delivering the preferred method would definitely aid in a faster recovery to revert to your daily lifestyle.
A person who survives a stroke needs to refine his lifestyle. Planning for critical illness or disability is never about the illness, it is always about wellness.
Refining Lifestyle Calculator
Financial Planners often talk about life insurance because we are talking are protecting the worth of one’s live in the eyes of their loved ones. When it comes to surviving an illness and having to make changes to your quality of life, you need to know what it takes financially to reduce the disruption in your family’s daily lifestyle to the bare minimal.
Being well prepared definitely overpowers being caught unprepared. With this Refining Lifestyle Calculator, it will give you a rough estimate of the minimum income that you will need to ensure that while adjusting to your new lifestyle, the needs of your family members are not compromised.
Have fun calculating!
Article by Pamela Chong