Guide to health insurance in Singapore

If you’ve only got a minute:

• Your MediSave account is your personal health care savings account that helps you pay for healthcare expenses and approved insurance premiums.
• MediShield Life and Integrated Shield Plans (IPs) help to provide coverage for hospitalisation and surgical costs.
• Critical illness insurance provides a lump-sum payout upon diagnosis of a specified critical illnesses while disability income insurance provides a monthly payout if the insured is unable to work due to an illness or disability.

Singapore healthcare costs have been on the rise, along with the aging population and the increase in chronic illnesses and long-term care needs. To address that, the Singapore Government is expected to spend nearly S$17.84 billion in 2022 - a 57.8% increase from 2019 - to cope with rising healthcare costs.

On an individual level, we also need to be aware of how rising healthcare costs can impact our finances and our families when we get sick. This is where health insurance can be helpful. Health insurance is an insurance plan that helps to pay for your medical bills – in part or in full - when you get sick or injured, or become disabled.

How can you tell the difference between the many types of health insurance available? This article can help you understand how health insurance works in Singapore.

Government subsidies for healthcare in Singapore

MediFund is an endowment fund set up by the Singapore Government. It is meant to help patients who are still unable to pay for their remaining medical bills, even after receiving government subsidies, and drawing on from their MediShield Life, MediSave and cash balances.
 
Interest income generated by the endowment fund is channelled to approved healthcare institutions to help low-income patients with their medical bills.
 
MediFund Silver and MediFund Junior – which are part of MediFund – focuses on providing more assistance to the elderly and to children respectively.

MediSave -Your medical savings account

MediSave is a CPF savings account that is designated for your medical needs and expenses. If you are an employee, a portion of your CPF contributions is channelled into your MediSave Account.

Your MediSave funds can be used to pay for hospitalisation, day surgery, selected outpatient expenses as well as the premiums for MediShield Life, Integrated Shield Plans, ElderShield, CareShield Life and supplements.

Types of Health Insurance in Singapore, explained.

1. What is MediShield Life, and what does it cover?

MediShield Life is the basic universal health insurance plan that covers all Singapore Citizens and Permanent Residents for life. MediShield Life premiums can be paid fully with MediSave.

MediShield Life benefits: It is targeted at subsidised treatments in B2 and C wards in public hospitals, and selected outpatient treatments like kidney dialysis and chemotherapy. Medical expenses incurred in A, B1 and B2 wards in private and public hospitals can be partially claimed from MediShield Life, subject to claim limits and other limitations.

Since 1 September 2022, MediShield Life covers a list of clinically proven and cost-effective cancer drug treatments on a Cancer Drug List, with more granular claim limits ranging from S$200 to S$9,600 per month to be better aligned to the different costs of cancer drug treatments. In addition, it covers S$1,200 per year for outpatient cancer drug services.

2. What is Integrated Shield Plan (IP)?

IPs are health insurance plans provided by participating private insurance companies. These offer additional benefits beyond those provided by MediShield Life. IPs provide greater coverage for hospital bills incurred in A and B1 wards in public hospitals and standard single-bedder in private hospitals.

Premiums for IPs may be paid for using Medisave, subject to additional withdrawal limits (AWL).Any excess must be paid in cash.   

3. IP riders 

IP riders are optional add-ons to your IP to further reduce your out-of-pocket medical expenses. They are paid in cash only. 

Riders provide benefits such as reducing your co-payment to just 5%, a cap of S$3,000 per policy year for your co-payment and enhanced cancer coverage.  

You can get coverage for cancer treatments that are not on the Cancer Drug List (CDL) of up to S$250,000 per year. In addition, riders also could provide you coverage for cancer drug treatments that are not on the CDL and increase your cancer drug services coverage as well.

Read more: How will changes in Integrated Shield Plans impact you?   

Cancer coverage changes of Integrated Shield Plans  

4. Hospital cash insurance

Hospital cash insurance provides you with a fixed amount of money for each day that you are hospitalised. The payouts can continue for multiple hospitalisations until the maximum number of days each year as stipulated in the policy is reached, or until the lifetime limit of the policy is reached.

Such insurance policies are distributed by private insurers and premiums must be paid in cash.

If you are a freelancer, part timer, self-employed person, or if you do not have any paid sick leave or hospitalisation leave as part of your employment contract, you can consider getting a suitable insurance policy that includes hospital cash benefits. That will help to provide you and your family with some income while you are hospitalised and unable to work.

5. Critical Illness Insurance

Critical illness insurance pays you a lump-sum of money when you are diagnosed with a critical illness that is covered by the policy. Different policies might cover different types and stages of illnesses although they generally cover conditions like major cancers, strokes, heart attacks, and kidney failure.

These policies will also vary in how and when a payout is made. Some pay the full amount at once, while some make multiple payouts over different stages. Some policies only allow one claim before it lapses, while some allow multiple claims, subject to terms and conditions.

Critical illness plans such as eCriticalCare  can provide a sum of money to replace your loss of income while you recover from your illness, and pay for immediate medical expenses that may not be covered by your existing health insurance plans, while ensuring your savings remain untouched.

Read more: Is Critical Illness insurance necessary?

6. Disability income insurance

Disability income insurance provides you with a monthly payout when you become disabled due to an accident or illness and are unable to work. It typically covers up to 75% of your monthly salary until age 55, 60 or 65.

Such policies can be useful to replace your income over the long-term in the event you are not able to fulfil the main duties of your job due to an accident or illness.

7. ElderShield / CareShield Life: Long-term care insurance

ElderShield and the enhanced ElderShield plan (known as CareShield Life), are long-term care insurance plans that are available to all Singaporeans and PRs. They provide financial support if you are severely disabled, and help to provide for your long-term care when you are no longer able to take care of yourself.

Singaporeans and PRs born on or after 1980 are covered by CareShield Life, while those born earlier are covered by ElderShield and can opt to be covered by CareShield Life.

Which health insurance is the best for me?

If you are a Singaporean or PR, you are already automatically covered by two universal health insurance policies: MediShield Life, and ElderShield or CareShield Life (if you are born on or after 1980). They provide lifelong coverage and could cover pre-existing medical conditions.

But if you would like to enhance your health insurance coverage, here are some points to consider first:

• What coverage do you currently have?
• What additional coverage do you and your family need?
• What options are available?
• What is your budget?

It is important to buy a health insurance policy that fits both your needs and your budget. It is also key to note that pre-existing conditions may not be covered by the insurance policies.

To get a comprehensive overview of your insurance coverage, speak with your Wealth Planning Manager.

DBS has partnered with major insurers in Singapore to make health insurance easily accessible online for purchase. You can now independently learn, compare and buy a plan most suited to your own needs. Find out more on DBS Health Marketplace.

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Disclaimers and Important Notice
This article is meant for information only and should not be relied upon as financial advice. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability.