The ST Guide To... Buying health insurance

askST: Which health insurance plan suits you best?

Ask yourself which class of ward you will use, if you can afford future premium payments

MediShield Life began in November last year, bringing compulsory health insurance to Singapore and marking the coming of age for health insurance in the country.

Just 25 years ago, hardly anyone here had personal health insurance. They either depended on their employers for healthcare support, or paid the whole sum out of their own savings.

And hospital bills can be very big, even with Government subsidy, sometimes posing a severe financial strain on the patient's family.

With the launch of MediShield Life, no Singaporean or permanent resident will ever have to face big hospital bills on their own again.

The creation of MediShield Life, a concept that had been raised many times over the years, is finally reaching fruition, and everyone, regardless of age, infirmity or ability to pay, will enjoy coverage.

But the difficulty in choosing the best insurance plan remains for the two in three people who are on the private plans integrated with MediShield. Here are some tips on picking the health insurance that suits you best.

DECIDE ON THE CLASS OF WARD YOU ARE LIKELY TO USE, NOT THE ONE YOU WOULD MOST LIKE TO USE


With MediShield Life, all Singaporeans and permanent residents, regardless of age, infirmity or ability to pay, will enjoy health coverage. ST FILE PHOTO

Given a choice, most people would pick what they consider the best, and usually the most expensive.

Your insurance might cover you for that, but do not forget that it does not pay the full bill. You need to pay an initial amount called a "deductible" as well as co-pay the rest of the bill.

The deductible is $1,500 if you choose a subsidised C class ward, and $3,500 for A class or private hospital.

Aside from that, you will have to pay 10 per cent of the rest of the bill for integrated plans.

For MediShield Life, the co-payment drops to 3 per cent if the claimable amount is more than $10,000.

DO YOUR MATHS TO FIND OUT IF YOU CAN COMFORTABLY AFFORD THE PREMIUMS IN FUTURE

Use the current premium rates as a guide, but realise that IP premiums have been going up every few years.

This means that what you will need to pay 10 to 20 years in the future will likely be much higher than the rates published today.

Life expectancy for women here is 85 years and for men, 81.

ARE YOU DIABETIC?

If you are or worry about eventually suffering from kidney failure and needing dialysis, it might be worth your while to buy a higher plan.

This is because the basic plans pays for dialysis at subsidised rates.

If you are well-off or live in landed property that may make you ineligible for subsidy, you would need to pay for dialysis at private rates.

Generally, this is available only with the higher A class and private hospital plans.

Because dialysis is something that needs to be done regularly for the rest of your life, unless you get a kidney transplant, the cost without insurance could be prohibitive.

HAVE YOU BEEN EXCLUDED FOR CERTAIN COVERAGE BY YOUR IP?

If you have, you will need to ask if you are more likely to need hospital treatment for the medical problem you have no coverage for, or for other illness for which you have full insurance cover.

If it is for medical conditions you have been excluded for, then ask yourself if it is worth paying higher premiums just for coverage of medical problems you are less likely to suffer from.

SHOULD YOU BUY A RIDER?

This would fully cover you for all hospital treatments without the need for you to pay the deductible and co-payment.

First, riders are expensive, so can you afford to pay this, on top of your insurance premiums, for the rest of your life?

Another consideration is that historically, people who are fully covered tend to spend more on their treatments, sometimes even including things they really do not need - simply because it is free.

Similarly, some doctors would charge higher rates when their patients do not need to foot their own bills.

So while riders can give you peace of mind, knowing that your entire health bill would be taken care of, it does fuel consumption.

As a result, both the premiums and the cost of riders would rise much faster than general healthcare inflation.

A version of this article appeared in the print edition of The Straits Times on February 13, 2016, with the headline 'Deciding which integrated private plan suits you best'. Print Edition | Subscribe