Everything you need to know about choosing the right medical insurance plan

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What’s essential  
A medical expense plan and a critical illness plan are both essential, says Sherene Lua, financial services supervisor at Unicorn Financial Solutions. 

Also consider if you have enough health insurance coverage. Sherene says there are three key aspects to look into: hospital expenses (which can be covered by a good medical expense plan), living expenses and medical contingency costs (both of which can be defrayed by a critical illness plan). 

You may also need nursing care and medical equipment, or need to renovate yous home for greater mobility. The sum assured for your critical illness plan should be planned with your living and medical contingency expenses in mind, she adds. 


What does Medishield Life cover? 

All Singaporeans and permanent residents are covered by Medishield Life, a compulsory medical expense plan administered by the Central Provident Fund (CPF) Board. It covers you for life and is inclusive of pre-existing conditions. 
Premiums are deducted from your Medisave account and range from $130 for  a 20-year-old to $975 for a 75-year-old, before subsidies. You can log on to www.medishieldlife.sg to check your premium. 

Medishield Life pays a portion of your medical bill at public hospitals when you are admitted into class B2 or C wards, need day surgery, or undergo costly outpatient treatments such as kidney dialysis, or chemotherapy and radiotherapy for cancer. For example, if you are warded for a mastectomy or a biopsy, you can file a claim. But the plan does not cover the bill for procedures and treatment before admission and after discharge. 

To make a claim, inform the hospital staff handling your admission or outpatient treatment that you wish to make a claim on Medishield Life or your Integrated Shield Plan (IP, see below). The hospital will submit the claim for you.


Does Medishield Life pay all of my medical bills? 
No. Under Medishield Life, you have to fork out a fixed amount before the insurer starts to foot the bill. This is known as the deductible, and ranges from $1,500 to $3,000. The deductible amount depends on your age and the ward you stay in. 


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On top of that, you also need to pay a co-insurance amount, which is a percentage of the amount you can claim (from three to 10 per cent for hospitalisation and surgery; 10 per cent for outpatient treatment). 

In addition, there is a limit to how much you can claim. For example, you can claim up to $700 per day in hospitalisation expenses if you are in a non-ICU, or normal, ward. The claim limit for chemotherapy treatment (whose cost varies from case to case) is $3,000 a month, and for radiotherapy, up to $500 per session. Also, the maximum total amount you can claim per policy year is $100,000.

What if I would like to be treated at a private hospital? 
If you opt for a private hospital or class A and B1 wards in public hospitals, you can still claim from Medishield Life. But the payout is pegged at Class B2 and C wards. This means you have to pay more of your bill from your Medisave or in cash. 

To help you bear the costs, consider an Integrated Shield Plan (IP) from a private insurer. An IP includes Medishield Life as well as additional coverage for admission to private hospitals or class A or B1 wards in public hospitals. It may also cover the costs of specialist consultation and treatments before and after hospitalisation. 

An IP with an “as charged” feature lets you claim the full charges for ward, treatment and medical procedures; you need only to pay the deductible and co-insurance with Medisave or in cash. 

Different insurers have different plans. For example, the AIA Healthshield Gold Max comes with a choice of four plans to meet different medical needs, with annual premiums for a 35-year-old ranging from $72 to $236. Premiums are higher as you get older. You can use your Medisave to pay for your IP premium, up to a limit stipulated by the Ministry of Health. 


How do I reduce my out-of-pocket cash expenses?

Top up your IP with riders – add-on policies that take care of the deductible, or both the deductible and the co-insurance. A rider could also give you a daily cash payout for the days you are hospitaliaed. 

For example, NTUC Income’s Enhanced Incomeshield Plan comes with the choice of four riders. Its annual premiums for a 35-year-old range from $37 to $282. Riders need to be paid in cash, not Medisave. 


What does it cover? 
A critical illness plan gives you a lump sum when you are diagnosed with a condition covered by the policy. Most plans cover a list of 37 illnesses standardised by the Life Insurance Association of Singapore. It includes heart attack, stroke, kidney failure, as well as major cancers. 


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However, the definition of critical illness can be very specific. For example, a major cancer is defined as malignant tumours that are “positively diagnosed with histological confirmation and characterised by the uncontrolled growth of malignant cells with invasion and destruction of normal tissue”.

For a policyholder to successfully claim for her illness, Sherene explains that the insurer will assess the patient’s medical report and determine that it satisfies the policy’s definition of critical illness before a payout is made. 

In addition, the insurer will check that your illness is not a pre-existing condition that is excluded in your policy and that you have been truthful in your health declaration. 


The different types
A traditional critical illness plan pays out only for advanced stages of a critical illness and is usually terminated after one claim has been made. 

An early pay-out critical illness plan offers a payout when illnesses are detected at the early or less severe stages. It also covers you when you are diagnosed with a later stage condition. Examples include the AIA Complete Critical Cover and Great Eastern Life Critical Care Advantage. 

Other plans allow multiple claims upon diagnoses of different critical illnesses over the lifetime of a policy. Ho Lee Yen, chief marketing officer of AIA Singapore, points out that there are also plans for people of different demographics – children, women, men, or the elderly – that cover specific illnesses related to their needs.