Taking the right dose of health insurance
July 23rd, 2008 by ALVIN SOONG
It is often said that we lose our health making money, and then lose our money to restore our health. Lorna, the straits times journalist’s take on that is: Not if you have adequate medical insurance.
I summarised the points in here: Her mother was admitted for Spinal fusion surgery , a five-hour operation at NUH and total hospitalised for five days in a Class A1 ward.
From the claims she realised it is possible to be hospitalised and not have to pay a single cent from your pocket or Medisave account, through the private Shield plans.
These are hospitalisation plans offered by insurers that can be funded from one’s Medisave, subject to an annual cap of $800. Here are the two major pluses of such a plan:
1. Lifetime cover: Most private Shield plans offer lifetime cover, whereas MediShield cover ceases when one turns 85.
2. As-charged feature: Almost all private Shield plans offer this feature, which removes the benefit limits on the amount that can be claimed each day for hospital stay and procedures. This means hospitalisation expenses will be paid according to what is billed.
In contrast, traditional plans come with specific sub-limits, such as specified dollar benefits for room and board. Of course, you are still subject to the plan’s deductible and co-insurance (unless you have a rider), and annual limits.
To have an appropriate level of cover, buy a plan that matches your health-care expectations, provided you can afford the premiums. So, if you expect to stay in a class B1 ward, then buy a hospital plan with B1 coverage. But if for one, his/her plan is an Enhanced Incomeshield Advantage plan, which means it covers Class A wards of government/restructured hospitals such as NUH ,she could have opted to be hospitalised at a private hospital, but her insurer, NTUC Income, would then pay up to 65 per cent only of the hospitalisation bill.
Also premiums rise as you age. So, it is important to ensure that you have sufficient money to fund future premiums so as to prevent policies from lapsing. It is also wiser to buy a higher-class plan now while I can afford it, with a view to downgrading to a lower plan when I am older and premiums are higher.
All Shield plans come with deductible and co-insurance features. The former refers to the first layer of charges that the policyholder has to bear. Depending on the type of plan, the deductible is typically about $2,000 to $3,000. The co-insurance feature means that the policyholder shares part of the cost of the bill, usually 10 per cent over and above the deductible.
You can use only cash to pay the premiums. In the case of Income, it no longer offers the ‘Plus rider’ to new policyholders. In its place is the ‘Assist rider’, which covers the deductible. This leaves the policyholder to foot the co-insurance portion, which is capped at a specified amount depending on the type of Shield plan.
Many people hold off buying private Shield plans because they believe that they are adequately covered by their employers. That’s a very short-sighted view. Such covers are usually not portable, and there will come a day when you will leave your employer. Also, as you grow older, you may develop medical conditions and it is very difficult to find an insurer who will cover you once you have them. Hence the bottom line is to insure yourself adequately while you are still healthy.
Summarised main pts from Sunday Straits Times Lorna’s article
