Overview

MediShield Life has launched on 1 Nov 2015. It supersedes the MediShield plan by providing better coverage for all Singaporean & PR, including the elderly by subsidizing premium for the elderly using premium collected from younger policyholders.

Many of my clients have asked me if it’s worth to continue their Private Medical Insurance Scheme (PMIS) integrated plans (IP) and my answer to them is YES! MediShield Life does not change the reason for buying an IP in the first place.

The reason is simple. An IP policy from any of the 5 insurers is meant to cover an individual who wants to enjoy a higher level of service from hospitals in Singapore. MediShield Life doesn’t provide adequate coverage for this group.

Content

Quick Intro to MediShield Life
PMIS, what, how, why?

Benefits & Claims Comparison with IPs
MOST Important advantage of current IP versus MediShield Life?

The Future of PMIS

Conclusion

 

Quick Intro to MediShield Life
After MediShield was enhanced on 1 March 2013, MOH started to get feedback from the industry & public for a long-term reform to MediShield due to the aging population in Singapore.

The reason is a large contingent of elderly are living well beyond the original MediShield maximum age of 80 & there’s an urgent need to address their medical expenses in the face of rising medical costs in Singapore.

Comparing the statistics which I captured since 2013, we can see
marked increase in elderly in 2015.

The original limits of MediShield were no longer adequate today even for patients in subsidized B2/C wards in Public hospital for serious diseases like Cancer, Stroke & Heart attack, etc. This will burden both their family, who has to bear the medical costs, and society at large by forcing a drawdown on the MediFund scheme, which is a welfare scheme financed by Singapore budget surplus.

In summary, MediShield Life enhances the following benefits & limitations when compared to the 2013 MediShield upgrade;

  1. Lifetime coverage – increased from age 92, hence the name “MediShield Life”
  2. Increase in limits for Room & Board, Surgery, Chemotherapy, yearly Hospital Expense limit & no Lifetime claim limit
  3. Reduction in Co-insurance
  4. Coverage for residents with Pre-existing condition
  5. Subsidizing premium for the elderly by increasing premium for lower age groups to ensure affordability to this group who are above age 90
  6. Government premium subsidy under the Pioneer Generation, Transitional (first 4 years), Low-Middle Income and Additional Premium Support (families without MediSave) schemes

This list covers the most important points, for more information about MediShield Life, please go to this MOH website.

 

PMIS, why, what, how,?

There are many articles in print & online that I’ve seen about how Integrated Plans (IP – current name of PMIS) are no longer necessary or irrelevant now that MediShield Life has launched. Many of them seem to center on how most people are going to subsidized wards rather than non-subsidized wards even though they have PMIS policy or IP. There are even opinions that IP are somehow the reason why the government have to increase the benefits of MediShield in 2013 thus making it unaffordable to the elderly…

All I can say is that many of these articles are not well researched & contain factual errors or the author misinterpreted the meaning or usage of the benefits in the first place. Fortunately many of these articles have been unpublished or cannot be found in Google or Bing.

As a 10+ year veteran in the insurance industry handling countless hospitalization claims including my late father, I am happy to set the record straight. I have seen first-hand as a child how an unsuccessful surgery & subsequent passing of my grandfather burdened my extended family’s finances for 10 years.

I’m therefore glad that I “forced” my late father to join our AIA HealthShield policy with me as the payor. Most of the Radiation Therapy and ward charges were covered by AIA. We were daily visitors to the Crystal Suite at the National Cancer Center at SGH for almost 3 months.

Why

MediShield was originally created to allow all Singaporeans & later Permanent Residents access to necessary medical care without causing a financial burden to the family. Back then, it’s either Public Hospital for the average resident or Private Hospital for the well-to-do.

As Singapore built up a reputation as a Medical Hub resulting in longer lifespan & more importantly, better health for the elderly, people start to realize the importance of seeking medical intervention early. With access to good healthcare technology & more well-trained doctors, expectations of middle-class resident ballooned resulting in many of them seeking treatment from Private Hospital even if they have to pay more.

What

This led to NTUC Income & AIA to respond with government approved insurance plans under the PMIS. These Integrated Plans actually comprise of the original MediShield plan which forms the lower-tier of the coverage for Class C/B2 wards while the insurer’s plan covers B1/A/Private wards. This is an over-simplification because during assessment of the claim, whichever tier of the IP can pay out more, that tier will be liable to pay out the claim MediShield Life & IP will co-share the claims based on their respective limits.

How

As competition from Great Eastern, Aviva, Prudential & lastly AXA heated up, the IP’s benefits started to improve rapidly over the last 10 years, culminating in the “As Charged” plans that we now see on the market. In many respect, these IPs are better than many of the International Health plans offered by foreign insurers except IPs only cover Singapore residents & foreigners with valid passes. All treatment must be performed in Singapore, except for life threatening cases. Some insurers have even started allowing elative treatment in overseas hospitals subjected to strict terms & conditions.

Benefits & Claims Comparison with IPs

Below is a comparison of the MediShield Life benefits to current top-tier plans from the 6 insurers. I have also included the recently introduced “Standard Plan.”

The Standard Plan is a step up from MediShield Life that covers B1 wards at Public hospitals with higher ward & surgical limits. B1 wards are minimally subsidised for Singaporeans and completely unsubsidized for Permanent Residents hence the need for much higher surgical limits. This plan is underwritten by Private Insurers so Pre-existing conditions are NOT covered!

The Standard Plan is conceived as an even cheaper alternative to many IPs cheapest plan. The main difference is the lack of any pre/post-hospitalization for the Standard Plan while even the cheapest IPs have this benefit. When you look at the premium table for insured over 76 years old, you’d start to realise the need for the Standard Plan.

When doing comparison, please take note that IPs are a lot more expensive than MediShield Life & also the ward differences in the table.

MediShield Life
(C/B2 Wards)
Standard Plan
(C/B2/B1 Wards)
Top plans from 6 insurers
Daily Limits $700 (Normal) $1700 (Normal) As charged
$1200 (ICU) $2900 (ICU)
Surgical Limits $200 – $2000 $590 – $16720 As charged
(Based on Surgical Table) (Based on Surgical Table)
Outpatient Cancer Treatments $3000/month (Chemo) $5200/month (Chemo) As charged
$140 – $500 per session (Radio) $550 – $1100 per session (Radio)
Annual Limits $100,000 $150,000 $500,000 or more
Lifetime Limit None None None
Congenital & Pre-existing conditions Yes No Yes (Congenital)
Yes (Pre-existing For some insurers)
Day Surgery & Short Ward Stay Yes Yes Yes (For some insurers)
Pre & Post Hospitalization expense reimbursement No No As charged
(Between 90 – 365 days before & after confinement)
Riders to cover Deductible & Co-insurance No No Yes
Pregnancy Complications No No Yes
Pro Ration Factor for Private/A/B1/B2+ wards 35% (Private/A) 50% (Private) Not applicable
43% (B1) 80% (A)
70% (B2+) 90% (B1 for Permanent Resident)

Based on my experience, the surgical limits can be easily exceeded unless it’s heavily subsidized by the government. Outpatient Cancer Treatments are more in line with current treatment costs.

However, MediShield Life & Standard Plan still doesn’t cover pre & post hospitalization costs incurred nor does it cover pregnancy complications.

Insured of MediShield Life scheme who opt to upgrade to higher wards (B2+ onwards) can still claim from MediShield Life, however, the pro-ration factor will kick in to reduce the claimable amount.

On top of that, PRs who don’t have IPs will be pro-rated even when staying in Class C wards and their subsidies for Class C ward is also lower than a Singapore Citizen. It is therefore imperative that PRs buy an IP!

Pro-ration Factors for MediShield Life
Ward Class / Subsidy Status Singapore Citizen Permanent Resident
Class C 100% 44%
Class B2 100% 58%
Class B2+ 70% 47%
Class B1 43% 38%
Class A / Private Hospital 35% 35%
Community Hospital (Subsidised) 100% 50%
Community Hospital
(Non-subsidised)
50% 50%
Subsidised Short Stay Ward 100% 58%
Non-subsidised
Short Stay Ward
35% 35%
Subsidised
Day Surgery
100% 58%
Non-subsidised
Day Surgery
35% 35%
Subsidised
Outpatient Treatment
100% 67%
Non-subsidised
Outpatient Treatment1
50% 50%
1The pro-ration for non-subsidised bills for outpatient cancer treatment will take place from November 2016. Bills for non-subsidised dialysis-related treatments and immunosuppressant will not be pro-rated.

Computation of pro-rated claim amount is generally as follows:

Final Bill multiple by pro-ration factor subtract Deductible subtract Co-insurance

Example (Singaporean, Private/A ward using MediShield Life):

Hospital Bill

35% of Hospital Bill subjected to Benefit limits

MediShield Life

Claim

Computation

Daily Ward & Treatment Charges
(18 days Private Room @ MT Elizabeth Novena)
$11,520 $640 * 18 days

($11,520 x 35%)

$4,032
Surgical Procedure
(Table 5)
$8,500 $2,975

($8,500 x 35%)

$1,400
(Limit exceeded)
Implant $4,000 $1,400

($4,000 x 35%)

$1,400
Total $24,020 $8,575 $6,832
Less Deductible
(Private Hospital)
<= age 80 – $2,000
>=81 – $3000
– $2,000
Claimable Amount (less Deductible) $4,832
Less Co-insurance – $392 *
MediShield Life pays  $4,400
Medisave and/or Cash $19,620

* Co-insurance = ($3,000 x 10%) + ($1,832 x 5%) = $392

Note that for Private/A Wards, Deductible for MediShield Life is $2000 whilst IPs Deductible is $3500.

The amount claimable from IPs will be even more when the bill size become bigger. This is especially true for insured suffering from a Critical Illness where the bill can easily exceed $100,000.

The bottom line is simple. Don’t stay beyond the entitlement of the policy or you’d get a rule shock when the claim comes back.

 

MOST Important advantages of current IP versus MediShield Life?

The answer is the ability to walk into a Private ward (A/B1) in a Public Hospital or a Private Hospital without the lengthy waiting time associated with a subsidized ward.

Private patient enjoy little to no waiting time

For non-emergency cases, to qualify for entry to a subsidized ward, a patient has to first go to a Polyclinic for a referral to a specialist who will schedule for more diagnostic test & scans which may take place up to 6 months in the future. After a further waiting period to meet the specialist for the medical report, there is even more waiting to get a slot in a Public hospital for the treatment to be performed by a hospital assigned doctor.

In the meantime, the patient will be inconvenienced and/or be in pain as he or she has to go on with life trying to fulfill his or her obligations. Further complications may also arise as the illness is not treated in a timely fashion resulting in a longer recovery time or worse, the illness progressing to an incurable stage.

This is the reason why most working Singaporeans & PRs have elected to buy an IP in the first place.

You bought it. So use your entitlement!

There are reports in newspaper articles that quotes 60+% of patients go to subsidized wards when they have IP and they questioned the relevance of IP. There are several reasons why this may be. Chief among these reasons is awareness.

Many of these people probably don’t have professionals advising them on their entitlement. Admission staff at Public Hospital has also been trained to tell patients they may not be able to enjoy subsidized rates for follow-up treatments if they’re admitted as private patient in Class A/B1 wards. The patients themselves may be embarrassed to discuss their condition with their financial advisor or worse, the financial advisor gave their clients wrong advise.

I have seen claims for subsidized post-hospitalization follow-up and they’re around $60. Private patient at Public Hospital pay $80-100. Since 90% is claimable, why would you want to go to a subsidised ward and suffer the long waiting time?

I also advocate clients to share with me their medical condition so I can help them by referring them to the right specialist or hospital for treatment. I can also give them an idea of what can and cannot be claimed so they can make the best treatment choices based on their budget. Lastly, the Pre & Post-Hospitalization bills are collected by me so it can be submitted to the insurer for a speedy claim, ensuring my clients are not burdened financially by the treatment.

Claims for Pre/Post-Hospitalization expenses including clinics, specialist, test & scans

Lastly the proportion of beds between C/B2 and A/B1 is around 2/3 and 1/3 respectively so Public Hospital are just trying to maximize the bed allocation. So statistically it make sense that 60% of eligible patients are actually pushed to lower wards.

Besides the speed at which diagnosis & treatment can be completed at Public A/B1 wards & Private Hospitals, the overall yearly limit is also much higher compared to MediShield Life. There are also no cap for Room & Board, Surgery, Outpatient treatment for Cancer, Organ Transplant & kidney dialysis. Coverage is already for Lifetime since years ago and there’s no Lifetime limit to the benefits.

Another important benefit from IP is the coverage for expenses prior to admission & also expenses incurred for follow-up, rehab & medication after discharge. IP from the 6 insurers cover between 90-365 days for these pre & post hospitalization benefits. This is not available for MediShield Life. This benefit alone should alleviate any worries of costly follow-ups.

Different insurers also package slightly different benefits for product differentiation purposes and their premium is based on past-years claim experiences. An important note is the premium paid for IP is actually split into 2 tiers as well. Part of the IP premium actually goes to pay for the underlying MediShield & this arrangement will remain the same for MediShield Life.

 

The Future of PMIS

Moving forward, what is in store for clients of the 5 insurers?

Well, AXA just joined the party this year, taking the opportunity since the 5 existing insurers promised not to increase their premium this year, and that means they can’t improve their benefits as well. AXA Shield’s main selling point is the 365 days of post-hospitalization benefits which is indeed a great benefit for clients!

Premium will increase again

It’s a foregone conclusion that there’ll be price adjustment again as MediShield Life replaces MediShield in the IPs, although it’s not as drastic as the hike in 2013, it’s still hefty enough that many clients would want to review their existing Shield plans.

Fortunately, due to claims being co-shared between MediShield Life & IPs, the 5 insurers (excluding AXA, who just joined) has promised a freeze on the premium for the Private Insurance tier of the IP until Nov 2016. 2017 premium will be based on the claim ratio of 2016.

Pioneer Generation members who are holding IPs will still enjoy the same discount (in the MediShield Life tier of their IP) as other members because CPF will differentiate premium going to MediShield Life & IPs. This means all relevant subsidies will still apply to the MediShield Life tier of IPs.

After Nov 2016, the 6 insurers will probably take the opportunity to restructure their plans to provide more benefits since AXA’s entrance has changed the dynamics somewhat. MOH is also encouraging insurers to practice loading for non-healthy residents who wishes to purchase. We’ll have to wait to see how that goes.

(Update 06/12/2016) So far, Aviva & Prudential has raised their premium & benefits to match AXA and to increase their premium-to-claim ratio. AIA has also released information about leapfrogging AXA’s benefits with, yes, a corresponding increase in premium. Now waiting for GE & Income to announce their changes. I will update the article again when they release their updates.

Increase in MediSave withdrawal limits for PMIS

Now that premium for the MediShield Life & Private Insurance tiers of IP are charged separately, CPF has introduced Additional Withdrawal Limits (AWL) for the Private Insurance tier of IPs. For all ages, MediShield Life can 100% be deducted from MediSave.

For Private Insurance tier, CPF has increased the withdrawal limits across the board, which is great news for older policyholders of IPs.

I have written another article comparing the new and old limits and how much cash you now have to pay now. It’s good news all round. 🙂

Loading to be finally introduced to Health Insurance?

With the exception of Aviva, all PMIS insurers underwrite their policy based on the current health of applicants. If the applicant has a pre-existing medical condition, that condition or bodily organ will be excluded from coverage. For people who are suffering from or had suffered from a serious illness, the insurer can outright reject the application. This is done to ensure the existing members premium don’t increase due to a sudden increase in claims by these unhealthy applicants.

There is a practical aspect to this arrangement because the government mandates that IPs are guaranteed renewable, which binds & obligate the insurer to insure an individual for the rest of his/her life even if the medical bill comes up to be $700,000 every year!

Insurance only works if the collected premium can cover claims. If not, the insurer has the rights to increase everyone’s premium to continue providing this service. Just a small bunch of unhealthy policyholders who max out the claim every year will cause insurers to increase premium drastically. This is why health insurers don’t practise loading.

For most other health insurance plans in Singapore and overseas, if the claim amount for the individual goes above a certain amount, the insurer has the right to refuse to renew the policy due to poor claim experience!

AFAIK, no insurer has increased their premium because the risk is group underwritten & the portfolio is still profitable (just barely).

Conclusion

There are many nuances regarding utilizing Singapore’s healthcare system & claiming from the corresponding insurance schemes, which is rather unique because it tries to combine world-class service with affordability. However, over the past 10 years, it has worked and is working very well. Naysayers of the scheme obviously haven’t benefit from it… yet.

Combined this with the Health Promotion Board push for healthy life-style & early detection of illnesses, Singapore residents can look forward to a long & healthy life.

Published: 2013
Update 1: 9 March 2016 – Updated facts + better claims example
Update 2: 31 Aug 2016 – Inclusion of “Standard Plan” & AXA Shield
Update 3: 6 Dec 2016 – Aviva, Prudential & AIA increase premium & benefits

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15 thoughts on “MediShield Life and Integrated Plans

  1. Thanks for the write up.

    However your section on
    “Loading to be finally introduced to Health Insurance?”, seems to be incomplete and full of grammatical errors.

    Like

  2. I have operated my prostate cancer 6 years ago and till now,my condition is stable & PSA level remains at negligible value,am I able to purchase extra private medical insurance & what is the expected premium

    Like

    1. Hi Mr Lee, at present, all Private Medical Insurers don’t practise loading, meaning they will exclude all pre-existing conditions. As of now, for cancer cases, it really depends on the severity of your case. Since you’re in remission for 6 years, there is a slight chance, your application will not be outright rejected.

      The key is to submit enough documentation to prove there’re no residue cancer cells in your body to cause a relapse.

      The premium will be the same but there will be definitely be an exclusion of the prostate and likely surrounding organs.

      To discuss in more details, do allow me to email you at the address you entered. Or you can email me as well. 🙂

      Like

  3. Hi Eric,

    Thanks for the write up. It is an interesting read.

    I am curious to know exactly what can be covered under “post hospitalization” as it has impact on the patient rehabilitation. I can’t seem to find much online about what is actuated covered by the various IPs. Would you happen to know?

    Cheers,

    Like

    1. Post hospitalisation basically means all the followup consultations, medicine, rehab, physiotherapies that are ordered by the attending physician as part of the treatment. It can be done at the same hospital/medical center or private clinic as long as there’s room & board charges incurred.

      Like

  4. Thanks for getting back!

    May I clarify what you mean by room and board charge if it is just followup consultation or rehabilitation/physiotherapy sessions? Can home physiotherapy be included or say the doctor is called for a home visit for the followup consultation?

    Cheers!

    Like

  5. Room & Board charges refers to hospital admission. There are 2 main types that Singapore hospitals charge nowadays that I’ve seen.

    First, there’s “Day ward or Observation ward or Short Stay ward” that refers to an area with bed, where you are held before and after a day surgery, especially those that involves anesthetics. It is also used to observe a patient where there may be recurring symptoms or symptoms which doesn’t manifest itself unless triggered by an external event within an hour or so. This type of ward may or may not be claimable under Post-hospitalization, you have to check with your insurer or look at the contract.

    (AIA will cover this for post-hospitalization if the stay is more than 6 hours.)

    Second, there’s Room & Board charges which AFAIK means overnight stay. This usually means, you’re warded into a normal ward, high dependency ward or CCU/ICU. Some insurer(s) also consider a stay at a Community Hospital as Room & Board.

    BUT, unless specifically spelt out in the policy, convalescent (recuperation) homes or assisi hospice or home care or TCM hospitals are NOT covered as post-hospitalization unless the policy specifically has a provision for it.

    (AIA will covers this for post-hospitalization is the stay is more than 6 hours too, it doesn’t have to be overnight. However, home, hospice & TCM hospital are excluded.)

    Regarding your question for home visits and physiotherapy sessions, that’s a very interesting question. Based on what I’ve read in AIA contract, the basic HealthShield Gold Max plan does not cover this. It’s only when you cash purchase the Essential (rider) plan that covers the full hospital bill do you get an additional benefit called “Home Nursing.”

    What it covers is for a Licensed or Graduate nurse to attend to your medical needs at home within 26 weeks after discharge from hospital. This hospital stay must be longer than 5 days for this benefit to qualify. The doctor MUST also justify for such a treatment and it’s not up to the patient to decide.

    This benefit is usually used for paralyzed or coma patients, where there’s someone at home to look after them.

    Like

  6. Hi Eric

    At the time of your writing, there was probably only 5 companies to compare on re Integrated Shield Plans. Prudential was leading in terms of longer pre- and post-hospitalization benefits. AXA came on board this March to displace Prudential with what its longest pre- and post-benefits. Its Shield Plan A also stands to be the leading plan to offer highest annual limit in the market at SGD1 million where the other companies hover around SGD600k limit. And while most others have lumped the coverage and benefits into a single shield plan, AXA has chosen to unbundle its rider benefits, giving customers the flexibility of choosing and paying on what they need. I am currently on GE and contemplating a switch but wondering if there is a catch to this new market entrant.

    Like

    1. Hey Jenny, I can’t comment too much about AXA new Shield plan because I haven’t read their contract but at present, AXA entered the market when other insurers have promised not to increase their premium for 2016 so their plan is unlikely to challenge AXA this year.

      Since IPs must be approved by CPF, there shouldn’t be any catch. The only question is, as they’re the smallest player currently, will they be forced to increase their premium once the claims start coming in.

      As a consumer, what you have to ask yourself is, are you going to stay healthy for the next few years. In case AXA plan becomes uncompetitive, can you still switch back? Lastly, is your current GE agent serving you well? If yes, the advisor’s advice is important to consider as well. For example, SupremeHealth has some of the best pregnancy complication coverage so review your needs carefully.

      If you have engaged an IFA, you can jump ship so long as you’re healthy. Anyway, AXA has revealed their plan quite early so the other insurers have ample time to enhance their plans next year.

      Like

  7. Hi Eric,
    I like the explanation in your blog. I would like to know if Medishield Life and Integrated shield cover all implants or are there restrictions? I know Medishield Life covers up to $7,000, but for any implant?
    Thanks.

    Like

    1. Hi Alice, as long as the implants are approved by MOH, they should be claimable. The doctors are actually the best person to answer this because the insurers will based their assessment on the doctors’ eFiling.

      However, having said that, prostheses are usually NOT covered. So don’t confuse the 2.

      Like

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