Navigating healthcare costs

By Shawn Lee

If you’ve only got a minute:

• MediShield Life offers basic coverage and is designed for hospital stays in B2/C wards.
• An Integrated Shield Plan (IP) extends coverage to A/B1/Private wards that come with advantages such as increased privacy and choice of doctors.
• By getting a rider with your IP, you can enjoy comprehensive healthcare coverage that further reduces out-of-pocket costs and provides a peace of mind.

Falling sick and being hospitalised is something everyone dreads. It takes a toll on your physical well-being, and all you want is to focus on recovery and getting better. However, during this time, another major concern arises- the bills.

On top of the distress caused by the illness, the financial burden adds unwanted anxiety at the worst possible time. A large bill can put you in debt, disrupt your retirement plan, and destroy your family's dreams. So, what can you do to plan for such unexpected expenses?

MediShield Life - Your basic shield against healthcare bills

The Singapore Government has implemented a basic universal insurance plan called MediShield Lifeto protect all Singapore Citizens and Permanent Residents against large healthcare bills. MediShield Life covers subsidised treatment in public hospitals, and is designed for hospital stays in B2/C wards.

Singaporeans will be able to pay for their MediShield Life premiums fully using Medisave.

If you stay in an A/B1 ward or a private hospital, MediShield Life will still provide coverage, but it may only cover a small portion of your bill. In such cases, you would need to rely on MediSave and/or cash to settle the remaining balance.

Advantages of A/B1 wards and private hospitals

Is MediShield Life sufficient for you? To determine this, decide on the level of healthcare you prefer. Here are some benefits of a A/B1 ward in a government restructured hospital or private hospital compared to a B2/C ward.

Increased privacy: A/B1/Private wards offer greater privacy to patients. B2/C wards have 6-8 patients per ward, while B1 wards usually have 4 beds to a room and A/Private Hospitals have single-bed rooms. As such, A/B1/private wards provide a quieter environment, giving you more personal space to rest and recover with minimal disturbances.

Choice of doctor One key advantage of A/B1/private wards is the availability of a broader range of specialist services. It offers greater access to renowned specialists whose services may not be easily available to patients in public B2/C wards. This can be particularly beneficial for complex medical conditions that require the expertise of specific specialists, and when you want to choose a doctor recommended by family and friends.

Enhanced Amenities: B1 and higher ward would come with an attached toilet and bathroom, a television, and a choice of meals. These extras contribute to a more comfortable and convenient hospital stay.

Shorter Waiting Time: Some may prefer to stay in a private hospital because they would likely experience shorter waiting times for a bed and access to specialised medical services compared to government hospitals.

Integrated Shield Plans (IPs): Taking coverage to the next level

It was reported that more than 70% of Singaporeans have chosen to enhance their healthcare coverage with IPs. They provide coverage on top of the basic MediShield Life insurance. If you opt for an A/B1-type ward in a government or private hospital, an IP helps reduce your out-of-pocket costs.

There are various IPs offered by 7 private insurers, each tailored to a specific ward level (e.g., B1 ward, A-ward, or a single-bed ward in a Private Hospital). The inpatient and day surgery benefits under IPs are “as-charged” and typically cover all specified costs related to daily ward and treatment charges at normal and intensive care unit wards.

Additional benefits of IPs:

1. Additional outpatient cancer treatment coverage: IPs offer limits up to 5x MediShield Life limit per month for Cancer Drug Treatment and 5 x MediShield Life limit per year for Cancer Drug Services.
2. Pre and post-hospitalisation treatments: Some IPs provide up to 365 days of post-hospitalisation treatment coverage after discharge under their panel and up to 180 days of pre-hospitalisation treatment coverage before admission.
3. Higher claim limits: Up to S$2 million per policy year

Read more: Cancer coverage changes of Integrated Shield Plans

The additional private insurance component for IPs is payable by MediSave, but up to the following Additional Withdrawal Limits (AWLs):

• S$300/year for those at age 40 years and below on their next birthday
• S$600/year for those at age 41 to 70 years on their next birthday
• S$900/year for those at age 71 years and above on their next birthday

Any excess would need to be paid in cash.

Riders: Getting comprehensive coverage

Adding a rider to your Integrated Shield Plan helps mitigate costs, ensuring that you receive the care you need without financial strain.

An IP rider can limit your out-of-pocket payment to just 5% of the benefits of your policy if the treatment is provided by the insurer's panel of doctors, with a co-payment limit of S$3,000 for each policy year. This means that if you consult a specialist from the insurer's panel of doctors, you will only need to pay a maximum of S$3,000 per year.

Furthermore, riders can offer additional benefits for outpatient cancer drug treatments listed on the Cancer Drug List (CDL) of up to 18 times the MediShield Life limit, as well as coverage of up to S$250,000 per year for selected outpatient cancer drug treatments not listed on the CDL.

IP riders are only payable in cash and cannot be partially paid by MediSave.

Attain peace of mind: Safeguarding your health and finances

With rising healthcare costs and uncertainties, having the right insurance coverage is crucial. Emergencies can strike unexpectedly and being unprepared can lead to financial distress.

A top priority is to have suitable hospitalisation & surgical coverage that allows you to reduce out-of-pocket costs in the event of a medical crisis.

In addition to medical coverage, the Life Insurance Association (LIA) Singapore recommends obtaining CI protection equivalent to 4 times annual income so as to provide essential financial support for household expenses and debt payments during the recovery period.

As a general rule, aim to spend no more than 15% of your take-home pay on insurance premiums. However, bundled products (e.g. whole life insurance) may exceed this cap as they contain both protection and investment elements.

To find out more about money habits to protect against large medical bills, click here.

IPs and riders offer a comprehensive solution to protect you and your loved ones, providing you with a financial safety net that ensures access to quality healthcare and allows you to focus on your recovery.

Don’t wait until it’s too late.

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.

Ready to start?

Check out digibank to analyse your real-time insurance coverage. The best part is, it's fuss-free - we automatically work out your gaps and provide planning tips.

Plan with DBS  Plan with POSB

Speak to the Wealth Planning Manager today for a financial health check and how you can better plan your finances.

Let's Meet

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.