Health insurance protects you and your family from the financial loss you could potentially suffer in the event that an accident, illness or disability leaves you jobless and without an income during your recovery. It provides cash to make up for your income loss as well as covers the cost of your medical treatment.
Medisave and MediShield are not enough
Medisave, which is deducted from one’s salary, will only cover a marginal amount of medical expenses but it can be used to purchase MediShield.
While most Singaporeans have MediShield, it should be noted that this only covers up to 80 per cent of the expenses in Class B2/C wards and a marginal amount of expenses in Class A wards and private hospitals
Further, MediShield covers a person only up to 85 years of age. Beyond age 85, he has no cover.
With the impending implementation of “means testing”, people in a higher income group will not be granted the same level of subsidy as those in the lower income group and should therefore expect to pay more for their medical expenses.
Given the insufficiency of MediShield and MediSave, it would be prudent to have a comprehensive personal health insurance plan as a back-up to ensure that your medical costs are fully taken care of in the event of an accident and ailing health.
Tips on maximizing your health insurance coverage
- Get rid of duplicate coverage
- Get covered for large bills as far as possible
- Use Medisave to pay for health insurance premiums
Medisave is your own money and not an insurance scheme. The current Medisave cap is $34, 500. At the current rate of medical inflation, it’s likely that any major surgery could wipe out one’s Medisave balance if he or she totally depends on Medisave to pay for the medical bills.
Examples of health insurance plans
| Medical Expense Insurance | Sometimes known as Hospitalisation & Surgery Insurance, this plan pays for certain medical costs incurred as a result of an accident or illness. This includes inpatient medical treatment or surgery, some outpatient charges for day surgery, consultations with specialists, X-rays and laboratory tests.
There are limits to the amount you can claim under your medical expense policy, nonetheless it helps to alleviate your financial burden of having to pay for huge medical bills. |
| Hospital Cash Insurance | Hospital Cash Insurance pays a fixed amount of benefit for each day you are in hospital for medical treatment or surgery, regardless of the actual expenses incurred for your hospital stay. This means that the total amount paid under the hospital cash insurance plan may be more or less than your actual expenses.
This type of policy may have a waiting period, which means benefits are paid only after you have been in hospital for more than a set number of days. Benefits may also be paid for only a set number of days each year, or for the life of the policy. (In this case, the policy will end once the lifetime limit has been reached). Waiting periods and benefit limits vary across policies. |
| Disability Income Insurance | Disability income insurance pays a fixed amount each month to replace the income you would lose if you were unable to work as a result of an accident or illness. Although these policies are not intended to completely replace the income you earned before an accident or illness, it will help ease your financial burden. |
| Critical Illness Insurance | Critical illness insurance pays a lump sum either when you are first diagnosed with a critical illness covered by the policy, or after first having a type of surgery covered by the policy.
Types of critical illnesses covered by critical illness policies may vary from one insurer to another, however, most major illnesses such as major cancer, heart attack, coronary artery bypass surgery, stroke and kidney failure are covered by almost all policies. |
| Long-term Care Insurance | Long-term care insurance pays a fixed amount of benefit each month towards expenses for long-term nursing treatment. Benefits are paid when you cannot perform certain ‘activities of daily living’ on your own, such as taking a bath, dressing, feeding, going to the toilet and moving around.
The definition of ‘activities of daily living’ and the minimum number of activities that you are unable to perform before qualifying for the payment of benefits may vary from one policy to another. |
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