MediShield Life: How the changes make a difference

I am confused: How much of my hospital bill does MediShield cover?

MediShield claims are based on all the hospital bills you get in an entire policy year. All claims are first subject to a maximum (called the "claim limit") that you can claim for different services - for example, no more than $450 a day in a normal ward, but up to $900 a day in intensive care.

Of this amount below the claim limit, you first have to pay what is known as the "deductible", which ranges between $1,500 and $3,000.

Of the amount above this deductible, you co-pay 10 per cent to 20 per cent. This is sometimes referred to as "co-insurance".

MediShield then pays the rest of the 80 per cent to 90 per cent. In the diagram (top), the area in grey is the portion you pay and green is what the insurance pays.

So, what will change with MediShield Life?

Your share of big bills - in grey - goes down (above).

I am on an integrated shield plan. Will I be entitled to the government subsidies?

The Government will give subsidies to middle- and lower-income households, roughly those whose total family income divided by the number of people in the family is $2,600 or less.

If you qualify, you will get the subsidy, regardless of the type of medical insurance you have.

That aside, everyone will receive four years of subsidies once MediShield Life begins next year.

If you are in the pioneer generation, you will also get the pioneer generation subsidies, regardless of your income or type of insurance coverage.

I was not eligible for MediShield before. How do I sign up for the new scheme?

You will be automatically included when MediShield Life starts. If you were excluded for medical reasons (for example, former cancer patient or diabetic), you would need to pay 30 per cent more in premiums every year for the next 10 years, but you will be able to claim against the insurance as soon as you are signed up.

If MediShield Life gives such good medical coverage, should people give up their integrated shield plans with their higher premiums?

Integrated shield plans are policies that provide additional benefits beyond MediShield Life coverage. Whether you want to keep your integrated shield plans with higher premiums depends on the hospital ward you are likely to choose. If you plan to go private, then you will need such a plan catering to private hospitals or private wards in a public hospital.

But if you plan to go for subsidised hospital services, then MediShield Life should be sufficient.

If I have only MediShield Life and stay in an A-class ward, will I be covered?

MediShield Life will cover the amount it would for a B2 patient. With MediShield Life, the coverage will be higher than now - but will not be able to pay the bulk of your bill.

If you plan to use A-class service, it is best to get an integrated shield plan for that class.

As MediShield Life will cover most of the hospital costs, and government subsidies will help pay the premiums, is it not pointless to have so much in Medisave?

Aside from premiums, you would still need to pay the deductible of $1,500 to $3,000 a year.

If, for some reason, you need to be in and out of hospitals every year for 10 years, it would mean $15,000 to $30,000 just in deductibles alone.

There is also the co-payment of 3 per cent to 10 per cent.

On top of that, you are allowed to draw up to $400 a year from your Medisave account to control chronic ailments, vaccination and basic health screening.

While healthy people might not need that much, the majority are likely to need it. Studies show that 80 per cent of health-care expenditure is usually spent in the last years of life.

salma@sph.com.sg

www.facebook.com/ST.Salma

For more information on MediShield Life, go to www.moh.gov.sg/content/moh_web/medishield-life.html

For comparison of MediShield and the various integrated plans, go to www.moh.gov.sg/content/moh_web/home/costs_and_financing/schemes_subsidies/Medishield/Comparison_of_MediShield_and_Private_Integrated_Plans.html

This article was first published in The Straits Times on June 7, 2014.

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