This article first appeared on fundMyLife, the platform that connects financial planning questions to the right advisers.
According to the Ministry of Health, MediShield Life is a national health insurance scheme that provides lifelong protection against large hospital bills. On top of MediShield Life, locals and PRs can purchase Integrated Shield Plans from six insurance companies, which provides additional coverage for higher hospital class wards. While MediShield Life is relatively straightforward, Integrated Shield Plans can be quite a tricky matter.
In the past, we wrote about the considerations to make before purchasing Integrated Shield Plans. However, we also realize that there might be clarification required before embarking on buying these plans. Who better to clarify possible misconceptions, but our very own financial advisers of fundMyLife? In this article, we ask three of our fundMyLife financial advisers – Winifred Tan from Great Eastern, Jonathon Han from Prudential, and Ryan Teo from AXA – about the common misconceptions about Integrated Shield Plans.
Winifred Tan, Great Eastern
# 1 “IP plans are the same as CPF Medishield Life plans”
Firstly, Medishield Life (MSHL) and IP plans are not exactly the same although they have some overlapping similarities. Both MSHL policies and IP policies are payable by CPF. MSHL is a compulsory hospital/surgical insurance for all Singaporeans and PRs which covers only basic hospital stays, e.g., daily room and board benefits, and basic surgeries, but with limitations on claim amount and also on type of hospital that the user can stay in (up to only public B2 ward, 6-bedder ward).
IP plans are composed of MSHL as its foundation and an additional private insurance on top of it from either of the six insurers in SG to remove all the category limits and allow users to even insure themselves for better types of hospital services e.g. Private hospital, or Public A ward (1-bedder). It is thus essential to get an Integrated Shield Plan if one has enough CPF-Medisave to afford it as it would really help when bills incurred are large, as in most cases MSHL only covers 10-20% of a bill!
# 2 “Why must I get the rider? I’m still young and don’t want to waste my own cash to buy a rider which I would probably wouldn’t claim anyway”
Whether you are young or not, every hospital/surgical bill incurred will first subtract off the Deductibles and 10% co-insurance – essentially you have to co-pay this part – before you can claim using the main IP plan paid by CPF. It’s not an easy part to explain, so you can either ask me directly or drop me a message on my Facebook page. In terms of probability of going into hospitals, perhaps things like critical illnesses are rarer among younger people but what about the possibility of being active in sports or at work that you injure yourself and require a say, surgery e.g. ACL tear/burns/fractures? How about Congenital illnesses that may out of a sudden, strike in a young adult? These are the probabilities we need to guard against and having the entire package (basic main IP plan + rider) would really help you mitigate such financial risks
# 3 “I have a hospital-cash/hospital-income benefit rider in my whole life plan! It’s so much cheaper than the rider of the IP plan so why should I waste money to get this when I can claim through the whole life rider?”
Firstly, the coverage is entirely different in the hospital-cash rider of the whole life plan vs a full IP package. The former only gives a small payout, i.e. $30 a day when you’re hospitalized and warded to help replace your possible income loss during the time you’re hospitalized. They do not normally pay for surgeries/outpatient treatments/followups as well. The latter really covers all of your hospital bills as well as surgery/outpatient/followups/pre-admission tests from the first dollar onwards. The latter is also more of a reimbursement of bill instead of extra payout for income-loss. Bills often can be as high as $1,000 even for minor surgeries or hospital stays. Thus, what we have to focus on, is to ensure the bills are covered for, and then work on getting the extra hospital-cash for some income replacement during the time that you’re unfit for work!
Jonathon Han, Prudential
# 1 Buying an ISP means anything to do with hospitals can be claimed
ISP are hospitalisation plans. What this means is that the customer must be hospitalised in order for the plan to take effect. Should the client see a specialist – even with a referral letter – without staying in the hospital, they will not be covered for the medical bills. However, if their specialist check-up requires them to be warded for observation or medical treatment, then yes the bills will be covered.
Special circumstances can be made for customers to claim their ISP without being hospitalized, and these include A&E treatment and follow-up specialist treatment from previous hospitalization stays.
# 2 Having a company insurance means I don’t need to buy an ISP
Not true. Why?
Firstly, a majority of company insurance is not as comprehensive as personal insurance. Personal health insurance can protect individuals from medical bills of up to $1.5 million a year, whereas a lot of company insurance barely crosses the $20k of medical coverage per individual per a year.
Secondly, company insurance is non-transferable. What this means is that the moment you leave the company, your coverage will stop. Some of my clients had to leave the company due to their inability to work, and leaving the company means that they no longer are covered under the corporate insurance. At this point of time, if we don’t have an ISP, we are left exposed to the mercy of the bills.
Ryan Teo, AXA
# 1 Integrated Shield Plans payment is separate from MediShield.
When you sign up for an Integrated Shield Plan, you’re still paying for the MediShield component as well. This is because Integrated Shield Plans are not separate coverage, as it is an additional top up coverage to MediShield.
# 2 It is a minor matter to switch Integrated Shield Plans
Before you switch providers, you need to weigh the options that the other provider gives, especially if there was a previous surgery or pre-existing illness. Cost-wise or benefits may seem better, especially as plans improve; however, you may not enjoy the same protection you previously enjoyed for existing medical conditions. In fact, under your old plan, you may potentially pay more for the same level of coverage.
# 3 No need to pay a single cent if I have full rider coverage by Integrated Shield Plans
Actually, it is not really true. You may still need to pay a cash deposit if it’s required by the hospital. Therefore, it’s useful if possible to have a letter of guarantee (LOG) as an assurance of payment offered by insurers before any hospital admission. It can help to waive any cash deposit required by the hospital or bill payment. However, it’s still up to the discretion of the hospital to accept the letter. You may still need to fork out your own money first before applying for a claim.
Discussion Round Up
Winifred clarified the differences and similarities between Medishield and Integrated Shield Plans. Ryan also expressed similar sentiments – it seems that consumers do mistake MediShield and Integrated Shield Plans as separate kinds of plans, when the former is a sub-component of the latter. No wonder this necessitates clarification on the MOH website. Winifred also emphasized the importance of riders, and explained the differences between hospital-cash rider of the whole life plan and the rider of a full IP package. Jonathon cautioned that not everything hospital related is claimable using Integrated Shield Plans and stressed the importance of not relying on company insurance. Ryan also debunked the myth that it is a small matter to switch insurers for Integrated Shield Plans, and talked about cash deposits during hospitalisation and how Letter of Guarantees can alleviate the financial pressure.
We hope this article was helpful in addressing the common misconceptions about Integrated Shield Plans! If you’ve more questions on the plan or any other insurance plans, head on to our main site and ask our curated pool of financial advisers! Alternatively, if you’d like to connect with either Winifred Tan from Great Eastern, Jonathon from Prudential, or Ryan Teo from AXA, just click on the link in their names and you can ask them questions directly from their profile pages.
fundMyLife is a platform that aims to empower Singaporeans to make financial decisions confidently. We also connect you to the right financial planners in a private and anonymous manner, based on your financial planning questions.
Follow us on our fundMyLife Facebook page to get exciting updates and your dose of finance knowledge! Alternatively, the Insurance Discussion SG Facebook group is a good place to discuss insurance-related topics with fellow Singaporeans.