This article is written in collaboration with AXA Insurance Pte Ltd. Views expressed in the article is the independent opinion of DollarsAndSense.sg.
In March 2018, the Ministry of Health (MOH) announced that all new riders being offered for private integrated shield plans are required to have a minimum co-payment of 5%. This means that policyholders are required to foot a small proportion (the co-payment percentage) of their overall hospital bill.
What this also means is that insurers in Singapore who offer private integrated shield plans can no longer offer full coverage riders to policyholders.
The co-payment scheme helps to minimise over-consumption, over-servicing and over-charging in health care sector, in order to keep medical costs and health insurance premiums affordable for everyone in the longer term. By having to pay a small co-payment fee, the public are encouraged to take better accountability of their health and the healthcare expenses that they incur.
Why Are Private Integrated Shield Plans Important?
Private integrated shield plans cover both inpatient and some outpatient expenses incurred by policyholders at the hospital. They complement (rather than replace) our existing MediShield Life, which is a basic healthcare insurance plan which is provided for all Singaporeans and PRs.
The limitation with MediShield Life is that coverage is pegged to the expected treatment cost in Class B2 or C wards in public hospitals. To enjoy coverage for higher-class wards at public hospitals or at private hospitals, we need to upgrade our existing MediShield Life to a private integrated shield plan.
When we get a private integrated shield plan, the hospital bill that we incur will be largely covered by the insurer, excluding any co-insurance and deductibles that we need to pay. However, it’s also important to note that typically, insurers would pay the hospital bill on a reimbursement basis – which means policyholders will need to pay the bill first, before the insurers approve and reimburse the claim.
Some insurers such as AXA can pre-authorise your treatments up to the yearly claim limit, so that policyholders only need to pay the applicable co-payment part of the bill upon their discharge, as opposed to having to pay the entire hospital bill first.
How Does Co-Payment Work?
If you buy a private integrated shield plan without adding on a rider, you will need to co-pay 10% of the bill, as well as the deductibles*, which is the initial amount you have to pay before your health insurance makes a payout.
There is also no cap on the co-payment that you have to pay, which means that you are still on the hook if you incur a hefty hospital bill, even if you already bought a private integrated shield plan.
For example, if you have bought a private integrated shield plan (without a rider) which covers you for a standard room in a private hospital and below, and you incur a hospital bill of $100,000 at a private hospital, you will need to pay a deductible of $3,500 first. After the deductible, you will need to co-pay 10% of the remaining $96,500 ($9,650) bill. In total, you will pay $13,150, in spite of having already bought a private integrated shield plan which covers you at private hospital.
* Depending on the type of plan that you choose and the ward that you are in, the deductible that you have to pay will be different.
Getting A Co-Pay Rider For Your Integrated Shield Plans
This gives policyholders a peace of mind, knowing that regardless of how high their hospital bills may be, they will not be paying more than the co-payment cap per year.
Additional Note: Both the 5% co-payment and the $3,000 payment cap each year are the minimum requirement set by MOH. Insurers are allowed to set a co-payment rate which is higher than 5% and/or a payment cap which is more than $3,000 if they wish to. Insurers such as AXA (via their AXA Enhanced Care Coverage) offer this minimum co-payment (5%) and the minimum cap required ($3,000).
It’s easy to think that everyone should automatically get a co-pay rider, or to stick to their existing full rider that they are on. However, here are some questions you should consider before deciding on whether you should get a co-pay rider.
# 1 What Is The Level Of Coverage You Want?
The first thing to remember is that your co-pay rider is tagged to your private integrated shield plan.
If you are buying a plan that covers you for private hospitals, it’s probably a good decision to add on the co-pay rider. This is because hospital bills at private hospitals tend to be much higher as compared to public hospitals. Having to pay even 10% of the total bill could add up to a large amount.
Hospital Bill Incurred At Private Hospital^
|Private Integrated Shield Plan Only||Private Integrated Shield Plan + Co-Pay Rider|
|Co-Payment||$9,650 (10% of $96,500)||$3,000 (5% of $100,000, capped at $3,000)|
|What You Pay||$13,150||$3,000
($10,150 less than without a co-pay rider)
At lower class wards in public hospitals, incurring a hefty hospital bill is less likely, though not impossible.
If you choose not to buy a co-pay rider, it’s worth calculating the financial risk that you are (still) exposing yourself to. If you want to protect yourself more adequately, consider adding a co-pay rider to your private integrated shield plan.
# 2 Long-Term Affordability
When you buy a private integrated shield plan along with a co-pay rider, you want to ensure that you are not only able to afford the premiums today, but also over the long-term. At the same time, you also want to consider the risk of not buying a co-pay rider. Not buying a co-pay rider means that you will need to pay a higher amount if you are hospitalised. So the savings that you get (from not buying a co-pay rider) could easily be lost if you are hospitalised.
Also the older you are, the more likely the chances that you may fall ill and require hospitalisation. Premiums naturally increase as we grow older to account for the likelihood that older people are more likely to be hospitalised.
According to a private integrated shield plan comparison compiled by the Ministry Of Health, AXA offers one of the lowest premiums among the various insurers in Singapore who offer private integrated shield plans. They provide an affordable option for anyone who is looking to buy a private integrated shield plan with a co-pay rider, which allow you to reduce the co-payment to the minimum allowed by MOH.
# 3 Additional Benefits That May Matter To You
Besides helping you reduce the co-payment of your hospital bill, there are also other costs benefits for your day-to-day healthcare needs that you can potentially enjoy when getting a co-pay rider.
For example, the AXA Enhanced Care rider covers policyholders for outpatient treatment due to accident, fractures, dislocation, sports injuries, food poisoning, dengue fever and even Hand, Foot, and Mouth Disease (HFMD). These are all common accidents and illnesses that many people do get at some point in time that would incur additional medical expenses.
However, these additional benefits should not be the sole reason why you want to get the co-pay rider. Rather they should be seen as an additional consideration when deciding if you would like to get the co-pay rider. Ultimately, the co-pay rider would cost you and if the budget that you have set aside for your insurance needs is already stretched, then you need to consider if the extra coverage that you get is worth the premiums you are paying, or if you rather deploy the funds elsewhere (e.g. get a critical illness plan).
# 4 Do You Currently Have Other Health Insurance Coverage?
For those who are working, you may currently be enjoying group insurance coverage from your employer. Some of these include hospitalisation benefits, which covers the cost of hospital bills incurred. If you think the coverage that you enjoy from your group insurance is comprehensive enough, it’s understandable if you do not see the need to buy a co-rider yet.
Do note however that they only last you for as long as you are working in the company. Once you leave the company, you will no longer enjoy your group insurance coverage. At that point in time, if you have any pre-existing illnesses, you may find yourself no longer being able to get the private integrated shield plan and co-pay rider that you want.
Thus, you may still want to buy a private integrated shield plan for yourself even if you already have group insurance.
Getting a private integrated shield plan is a good start to protecting yourself against large hospital bills. However, with deductibles and the co-payment requirement of 10%, you may still be insufficiently protected from the risk of significant financial loss.
To give yourself a peace of mind, always consider purchasing the co-pay rider in order to enjoy the additional healthcare coverage that you will receive.
You can find out more about AXA Shield here.
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 qualified advisor 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 18 September 2019.