Three commonly asked questions about new co-payment guidelines for Integrated Shield Plan riders

Full riders that pay the entire medical bill have been phased out; new co-pay riders are essential in managing out-of-pocket healthcare expenses

Insurers have launched new IP riders that have co-payment features requiring the policyholder to foot at least five per cent of his or her hospital bill. PHOTO: ISTOCK
Insurers have launched new IP riders that have co-payment features requiring the policyholder to foot at least five per cent of his or her hospital bill. PHOTO: ISTOCK

Starting from April 1 this year, insurers can no longer sell full Integrated Shield Plans (IPs) with riders that pay for your entire hospital bill. All insurers have launched new IP riders that have co-payment features requiring the policyholder to foot at least five per cent of his or her hospital bill.

The co-payment feature comes in the form of a co-pay rider, which is added on to the new IP. Some insurers have added a cap on the co-pay amount, although this is not mandated by the Ministry of Health (MOH).

The new co-payment guidelines for IP riders, announced by MOH on March 8 last year, are aimed at encouraging the public to take better accountability for their healthcare expenses.

The guidelines also aim to minimise unnecessary healthcare charges and to keep healthcare insurance premiums affordable for Singaporeans in the long run.

People with full riders have bills that are 60 per cent higher than those without riders. In 2016, bills from patients with private hospital IPs and full riders averaged $9,975, compared to $6,270 for those with the same IP but no rider.

The changes do not affect the 1.1 million people who already have full riders incepted in their IP plans before the April 1 effective date subject to insurers not changing the existing terms of the insurance. Those who bought full riders from March 8 last year to March 31 this year can be fully covered till April 1, 2021, after which they must switch to IPs with the new co-pay riders.

Here are three commonly asked questions about the new rules for IP riders.

1. Will the introduction of the co-pay rider mean costlier premiums for me?

The IPs bundled together with the new co-pay riders are actually significantly more affordable than those with full-pay riders. This is because by taking co-accountability for the medical bills with the policyholders, insurers are able to improve underwriting risk management in the long run and therefore price premiums more competitively.

According to Mr Sean Goh, managing director of Life Strategic Business Unit at AXA, AXA Shield offered with the new AXA Enhanced Care co-pay rider are 28 per cent to 54 per cent cheaper than AXA Shield with the discontinued full-pay riders for a wide range of ages 20 to 60 under both Plans A and B.

The co-pay rider can only be paid for in cash, and while it is an additional cost on top of your IP basic plan, it is still very affordable. This is especially so if you use Medisave to pay for the premiums of the IP.

The premiums of IPs are payable with cash, or with funds from the Medisave account, capped at an amount known as the Additional Withdrawal Limit (AWL), which increases with age ($300 per year for those aged 40 and below, $600 for those aged 41 to 70 and $900 for those aged 71 and above). For example, AXA’s Shield Plan A is priced at $283 a year for an adult aged 35 years old – which is within the AWL – and is therefore payable with funds from his Medisave account. If the same individual then adds on the new co-pay rider, AXA Enhanced Care Plan A, he only needs to pay the AXA Enhanced Care annual premium of $312, which comes up to about $26 a month or less than $1 a day.

2. With the changes, does it mean I have to fork out more money for hospital bills in future?

Co-pay riders actually help to keep large hospital bills in check.

Hospital bills, especially for illnesses that require extended or expensive treatment, can amount to tens of thousands of dollars and even more – so it is true that even the 5 per cent co-payment amount can work out to be a substantial amount.

To protect Singaporeans from large bills even after factoring the 5 per cent co-payment rate, some insurers have launched new co-pay riders with an annual co-payment cap of $3,000.

AXA is one insurer, capping its Enhanced Care co-payment amount to $3,000 per policy year.

For example, if your hospital bill came up to $500,000, you only need to pay $3,000 per policy year, according to the cap set by AXA Enhanced Care, even though 5 per cent of $500,000 is $25,000.

However, the policyholder can only tap on this benefit if he or she consults with a doctor on AXA’s Panel of Specialists. This benefit is valid even if the policyholder seeks treatment at a private hospital, as long as he or she is referred through a doctor from the aforementioned panel.

By visiting AXA’s Panel of Specialists and General Practitioners located throughout Singapore, AXA Shield policyholders also get to enjoy discounted consultation fees. Fees are $12 (excluding medications, prescriptions, investigations and surcharges) if they visit any of AXA’s 350 clinics under the General Practitioner panel; or $100 if they visit any of AXA’s 450 clinics under the Specialist Panel.

3. What kinds of benefits do co-pay riders offer?

Insurers understand that co-pay riders are an additional cost, albeit at a small amount. As such, they have included some perks in the co-pay rider for the policyholder.

Some of these perks include an additional bed in the hospital for a family member, emergency accident outpatient treatment, Traditional Chinese Medicine treatment, ambulance or taxi charges and more. And besides these more commonly seen benefits, each insurer also introduces some unique perks that fulfil different needs.

AXA’s new co-pay rider also covers outpatient treatments for dengue, hand, foot and mouth disease (HFMD), and food poisoning. According to the National Environment Agency, dengue cases have increased by 20 per cent from 2017 to 2018. The MOH reported that food poisoning cases jumped 40 per cent on a year-on-year basis from January to October last year, compared to the same period in 2017. HFMD cases have also climbed from 2017 to 2018.

On top of addressing these rising common ailments, outpatient treatment is also covered for fractures, dislocations and sports injuries. And in case you fall sick or meet with an accident abroad, AXA Enhanced Care also offers coverage for overseas medical treatment.

Start early to be prepared always

Co-pay riders are an important add-on to one’s Integrated Shield plan; for a small sum every month, the riders go a long way in keeping out-of-pocket hospital bills affordable and protect you with a more holistic coverage. The sooner you can stop worrying about the prospect of being hit with a hefty medical bill, the better you can save for your next dream holiday or retirement.

Since insurance premiums increase as you age, it is ideal to purchase health insurance as early as possible.

If you are already covered, a regular review of your insurance plans ensures that you remain adequately covered throughout the various milestones of your life, as there could be changes to your plan features and your personal needs from time to time.

This plan is underwritten by AXA Insurance Pte Ltd (“AXA”). This advertisement is not a contract of insurance and not for use outside Singapore. The precise terms and conditions are specified in the policy contract. This advertisement is for your information only and does not have any regard to your specific investment objectives, financial situation or particular needs. You may wish to seek advice from a financial consultant before making a commitment to buy the product, and if you choose not to seek advice, you should consider whether the product is suitable for you. This is only product information provided by us. You should seek advice from a financial consultant if in doubt. Buying health insurance products that are not suitable for you may impact your ability to finance your future healthcare needs. A Product Summary is available and may be obtained from a financial consultant representing AXA. You should read it before deciding whether to purchase the policy. If you decide that the policy is not suitable after purchasing it, you may terminate the policy in accordance with the free-look provision, and AXA may recover from you any expenses incurred in underwriting the policy. A penalty may be imposed for early termination and the new policy may cost more, or have less benefits at the same cost. Protected up to specified limits by SDIC. This advertisement has not been reviewed by the Monetary Authority of Singapore. All information is correct as of 28 October 2019.