What you need to know about Integrated Shield Plans
How does MediShield work?
MediShield is a low cost medical insurance scheme for Singaporeans and Permanent Residents operated by the CPF board. Its objective is to help members meet large Class B2/C hospitalisation bills, which could not be sufficiently covered by their Medisave balances.
Every month, a portion of your CPF contribution is allocated to your Medisave account, and once a year, money is deducted from your Medisave to pay for your MediShield premiums.
Medishield claim limits, deductibles and co-insurance
Under the default MediShield scheme, before you can make a claim, your medical bill needs to be more than $2000 for class B2 wards and $1500 for class C ward. In addition, you need to bear 20% the remaining amount if your bill is less than $3000, 15% if your bill is less than $5000, and 10% if your bill is more than $5000. In other words, if your bill is small, the amount you can claim is less, or in some cases, you cannot claim at all.
After meeting the coinsurance and deductible criteria, you are subjected to further limits according to the type of treatment. For example, the amount you can claim for Chemotherapy is $270 per 7 days, and Kidney dialysis is $1000 per month.
What this means is the out of pocket expenses can be huge even though you have the default MediShield coverage. For instance, prolonged cancer treatment can cost hundred of thousands of dollars, not to mention the loss of income due to the illness.
How does Integrated Shield Plans help?
The problems mentioned above can be avoided if you have signed up for an Integrated Shield Plan offered by a private insurance company such as AIA. You can enjoy “as charged” 100% coverage for most of the treatments such as chemotherapy and renal dialysis.
The cost is very affordable, especially when your are young. If you are 30 years old, the cost is about $50 per month ($20 CPF, $30 cash, cost increases with age). Considering medical bills can reach tens to hundreds of thousands of dollars, paying a fixed cost for an unpredictable variable risk sounds like a prudent risk management decision. You can also have a peace of mind as the private insurance company will provide a letter of guarantee to the hospital, which means you don’t have to worry about paying deposits during admission.
Why applying earlier is better?
At the point of application, you will not be covered for conditions you are currently suffering from, like asthma and slipped disc. In some cases, you may have to pay a higher premium compared to a perfectly healthy client. Therefore, it’s best to apply when your are in the pink of health.
Procrastination may save you a few years of insurance premium, but if you develop a medical condition later on and are not able to obtain coverage, the lifetime costs of treatment can deplete your prior savings.
Hence apply for a Medisave-approved Integrated Shield Plan when you still have a clean bill of health. Fix the roof when the skies are clear, not when it has started to rain.
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