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SmallChange

What I learnt in a health scare

One needs to look at other layers of protection beyond MediShield Life

This is one of those stories that we have all heard but have rarely taken to heart.

One Saturday morning last month, my wife suddenly felt a lump in her lower left abdomen.

There was a lot of hand-wringing as we waited our turn at the gynaecologist.

The subsequent confirmation that it was a tumour rendered us dumbstruck, because there had been no symptoms at all.

As we prepared for her surgery, disbelief, fear and hope clashed across our minds. And worry.

We had no health insurance coverage beyond the basic MediShield Life, and the medical fees would be a financial setback casting a pall over our uncertain future.

But I'm grateful that this story had the best possible ending.

The tumour turned out to be a non-cancerous fibroid growth which was removed without damage to any organ, thanks to Dr Tay Eng Hseon at the Thomson Medical Centre.

Moreover, my wife's company insurance is a surprisingly robust plan that will mitigate a substantial part of the medical fees.

But we cannot ride our luck forever hoping things will always turn out for the better.

So just how well prepared are you for major health situations?

This is a question that I pray our readers will ask themselves and have a good answer for, at a time when private healthcare costs are said to be rising 18 per cent yearly.

As I look back on this scary episode of my life, I realise I need to do a lot more to understand better what my options are in terms of insurance coverage for medical and hospitalisation fees.

It's some comfort to know that all citizens and permanent residents are already protected by MediShield Life. This is the compulsory national insurance scheme fully rolled out in 2015, but its adequacy makes for very frequent discussions by the public and media.

Some of the concerns are around the scheme's claim limits for hospital ward and surgery fees, typically the heftiest bits on the bill of a medical emergency.

There are also deductibles and co-insurance payments to consider - the amounts you have to fork out before the scheme coverage kicks in.

In our case, MediShield Life coverage was unfortunately not sufficient.

The surgery claim limit of $2,000 was far below what my wife was charged at Thomson, a facility we chose to ensure she could have the tumour removed as soon as possible. My wife had her operation two days after diagnosis.

Certainly, we should not expect a national insurance plan to provide full coverage for all situations. It has to be a prudent and sustainable scheme.

But it begs the question as to what more you can do to ensure you have other layers of protection, especially for situations where you want to have more freedom in choosing your medical services.

Perhaps you should start by finding out from your human resource department whether your employment comes with group personal insurance benefits, and, if so, what they are for, their claim limit and the claim process.

There are numerous insurance providers in the market and the products are structured very differently.

Depending on the nature of your company or job - for instance, it may involve higher risks of accident - you may find you are entitled to very generous coverage for hospitalisation and outpatient expenses.

For others, it can be somewhat lacking, with a low cap on the annual claim amount, requirement for co-payment, and a ward-class limitation for employees of different pay grades.

Even in the latter case, it is nothing to sneer at. The thing about a medical scare is that it can jump at you when you're least prepared. Every bit of help will count, particularly for less well-off households.

If you're willing to take another step forward, let us very seriously consider purchasing an Integrated Shield Plan (IP) and its rider upgrade.

An IP is a private insurance plan built on the basic MediShield Life policy, designed for a higher level of protection at better wards in government and private hospitals.

The IP premiums, along with the MediShield Life premiums, are payable by Medisave, subject to additional withdrawal limit.

Having a rider on top of an IP further covers the co-insurance and deductible components. The rider premiums must be paid with your own cash.

As I look through the products on offer from the six IP providers in the market - AIA, Aviva, Axa, Great Eastern, NTUC Income and Prudential - it seems to me that even the fullest and, hence, most expensive coverage is well worth its asking price.

For instance, one of the six providers prices its most expensive IP product at an annual premium of no more than $300 for those below the age of 40. Remember, this is payable by Medisave, and $300 a year for employed individuals of this age group should be very manageable.

Certainly, we should not expect a national insurance plan to provide full coverage for all situations. It has to be a prudent and sustainable scheme. But it begs the question as to what more you can do to ensure you have other layers of protection, especially for situations where you want to have more freedom in choosing your medical services.

Add to it the most expensive rider plan and you will have to pay an annual cash sum of no more than $367. This is what you actually pay out of your wallet - again a very small sum.

In exchange, you will have total coverage of up to $1 million a year. If my wife had it - if she had forked out a minute fraction of her annual income for it - she would not have to pay a single cent for all items before, during and after her hospitalisation.

I asked the Life Insurance Association executive director Pauline Lim how common IPs are, and whether there are many unprotected individuals like my wife. I was glad to hear that they cover 64 per cent of residents, with around half of these also having rider protection.

"As at Dec 31, 2016, 2.89 million lives were covered by IPs and IP riders, with total premiums amounting to $1.42 billion," Ms Lim added.

Have I presented all this information to suggest that you must purchase the most expensive IP because it's a no-brainer? Not at all. The affordability of a financial product is always subjective, and you should always gauge it with your income level and existing financial commitments.

It's not uncommon for IP holders to "downgrade" their policies as they get older, to lessen the financial burden of rising premiums in tandem with the policy holder's age.

Instead, I hope I have at least reached out to some of you who have not yet paid close attention to your health insurance options.

And I hope you can at least take away the message that health can be fragile no matter the age, and there is no better investment than spending what you can to ensure that when life throws its ugly surprises at you, you can face them knowing you have the means to fight on.

A version of this article appeared in the print edition of The Sunday Times on April 16, 2017, with the headline 'What I learnt in a health scare'. Print Edition | Subscribe