Changes in S'pore health insurance plans: What you should know

SINGAPORE - Nothing is certain but death and taxes, so the saying goes. But as people are living longer, chronic illnesses and diseases related to ageing are, and will be, cropping up more and more.

Unless one is very lucky and takes great care to stay in top physical shape all the time, chances are that as one ages, one's health will deteriorate.

One in three of those aged 60 and above are diabetic. One in five adults have hypertension, and for those aged above 60, the figure is one in two.

Cancer statistics are also sobering. There were 8,000 new breast cancer cases over a five-year period from 2007 to 2011. For colon cancer, there were 8,400 new cases over the same period.

Just one serious health issue, say, cancer, can wipe out years of savings. Chronic illnesses can chip away at life savings too.

And what about accidents? The weeks and months spent recovering from broken bones or more serious injuries can also wipe out hard-earned savings.

What about the possible cost to one's health? A study published in 2007 in the Journal Of The American Medical Association found that after experiencing a health shock, those who were uninsured were less likely to get any medical care.

Those who suffered an unintentional injury were 53 per cent less likely; those with a new chronic condition were 55 per cent less likely to get any medical care.

As many financial advice columns have said before, it is never too early to get health insurance.

The issue is what type of health insurance can you afford, be it private, A-, B- or C-class care. At the very least, do not opt out of MediShield. It pays to be covered for your health.

New changes

Recent upgrades made to the national insurance scheme MediShield led to the five approved providers of Integrated Shield plans coming up with revisions to their own schemes.

While the changes leave consumers with no choice but to pay the higher premiums, they also bring better coverage, albeit slight in some cases.

This is welcome news, especially as health insurance is a clear necessity here.

Without an insurance plan, you could be relying on yourself or your Medisave funds - essentially your own money - to pay for any hospitalisation expenses and that is very risky.

The cash in your Medisave account can run out very quickly when you stop working.

Enhanced MediShield

Fortunately, many would at least be covered under MediShield, a catastrophic insurance scheme that automatically covers all Medisave account holders who are Singaporeans and permanent residents, unless they opt out of it.

Recent changes made to the scheme will extend coverage to areas that were uninsured before, such as in-patient psychiatric treatment and short stays in emergency departments.

All Singapore citizens born on or after March 1 this year can also receive coverage on conditions that exist at birth, such as a hole in the heart, or acute conditions that require treatment soon after birth.

The maximum coverage age has been raised from 85 to 90.

Finally, the cap on the amount you can claim in a lifetime has been raised to $300,000, from $200,000. In addition, the annual limit is now capped at $70,000, up from $50,000.

The enhancements to coverage mean premiums have gone up, but MediShield still remains very affordable. Make sure your parents, relatives or friends have not opted out of the scheme, leaving them without an insurance plan, said experts.

Enhanced Shield plans

Given the recent changes made to MediShield, the private insurers also took the opportunity to add a few tweaks to their Shield plans as they raise premiums to remain sustainable.

These approved Shield plans are integrated with MediShield. This means that when the Central Provident Fund (CPF) raises MediShield rates, the private insurers will also need to raise their Shield plan rates as they share the premium and claim costs of MediShield with CPF.

In the latest round, the Shield plan premium rates for some age bands have gone up by more than 40per cent.

"The recent enhancements to Shield plans come at a cost as you have to pay higher premiums. There is no free lunch," said Mr Ong Lean Wan, chief executive of fee-based financial advisory firm Life Planning Associates (LPA).

Unfortunately, these increases may be unavoidable, as anyone who wants more of their B2 or C class bills covered, or to use higher ward classes or private hospitals will need an Integrated Shield plan on top of MediShield.

While MediShield is designed to cover bills for class B2 and C wards in government restructured hospitals, the subsidies for these wards are still subject to means-testing. Lower-income patients will get a greater portion of their bills defrayed than higher-income patients.

Shield plans offer more than basic MediShield. For one thing, there is no expiry age, so one is covered for life.

Recent changes to Shield plans also mean that insurers now offer a bit more coverage to policyholders.

NTUC Income, for instance, enhanced its coverage by introducing prosthesis benefits and new living organ donor transplant benefits, said Mr Pui Phusangmook, its senior vice-president and general manager for group & health.

More importantly, Income also revised its yearly claim limit for its most comprehensive Preferred Plan by $100,000 to $700,000, making it the highest in the market, he said.

However, Ms Anna Chen, insurance specialist at fee-only financial adviser Providend, said: "All Shield plans offer similar core benefits, so consumers shopping for a plan should look at the premiums as well as unique features."

Look at the unique features

For Madam Aileen Tan, the unique feature of Aviva's MyShield plan was a deal clincher.

The executive switched over in 2008 after her friend told her that the plan offers free coverage for children up to 20 years of age.

"I chose it because I have three children," said Madam Tan, 50, whose children were aged four to 10, when she made the switch.

"Many people don't think about getting plans for their children. But it's important to do so and with the free coverage that I get from my plan, the savings are quite substantial."

Aviva Singapore's director of product and marketing, Mr Daniel Lum, said Aviva is the first and only insurer to offer free child cover for up to four children till they are 20, if both parents are covered under the two higher Shield plan options.

Aviva also offers moratorium underwriting - no health declaration needed - and will cover certain pre-existing conditions after an absence of symptoms, treatments or medication for five years from the time the policy is in force, he added.

"Conditions apply... but this can be useful for those with less serious pre-existing conditions who are trying to obtain coverage."

Serious pre-existing conditions such as diabetes, kidney failure, dementia and autism will not be covered.

At AIA Singapore, its head of product & funds development, MsJoanne Yeo, said its HealthShield Gold Max A plan is the only Shield plan that covers congenital abnormalities of an insured female's biological child from birth till 24months old.

At NTUC Income, its prosthesis benefits - which takes care of people who need artificial limbs and eyes caused by accidents and conditions such as diabetes - are unique.

Mr Phusangmook said the majority of its Shield plan customers take up a rider and that "taken together, our IncomeShield and rider plans are, on average, the most affordable" in the market.

Choose wisely

Experts said it is important to choose a plan that meets your needs and aspirations, so you will have to decide which ward class you would like and get the plan that pays for it.

An Integrated Shield plan can offer higher benefits if one can afford it, said LPA's Mr Ong. "For one thing, you can minimise the long waiting time for surgery," he explained.

"If you stick to just MediShield which pays for the lower class wards, you cannot determine the timing of your treatment and you cannot choose your doctor.

"Unless the treatment is certified as urgent, you may have to wait a few years."

Experts advise policyholders to review their current plans and benefits. If riders are included, the cost can go up significantly as they age.

Shield plans generally suffice for those who work here but it is a different story for those who work overseas, as most Shield plans provide overseas cover only during an emergency.

Ms Chen from Providend said those who require general overseas coverage may want either the Great Eastern SupremeHealth Shield plan with a rider that can extend coverage to overseas, or other global health insurance.

"If you would like to retire in Singapore and are happy with the quality of medical care here, a good Shield plan will suffice," said MsChen.

"You must still have a local plan so that when the time comes and you no longer need a global plan, you can still have good coverage, even if your health status has changed.

"So buy a Shield plan first and add on a global plan if you work overseas."

Key problem

If the changes are tempting you to switch insurers, think through them first.

Health insurance is not easily switched because insurers typically will not cover any pre-existing health conditions.

"If a customer insures with us in good health and there are no exclusions (of pre-existing medical conditions) on his policy at the outset, even if he develops a condition down the road and makes claims, he will continue to be covered for those conditions," said NTUC Income's Mr Phusangmook.

"However, if the customer wishes to upgrade his health plan, he will be subject to underwriting for the upgrade."

All these means that if you do have an existing health problem, it makes better sense to stick with what you have.

"It's like Hotel California," said MrOng, referring to the song by The Eagles.

"You can check in but you can't check out."

KNOW THE DIFFERENCE

MediShield

- Administered by the Central Provident Fund.
- Expiry age of 90.
- Lifetime and yearly limits.
- Designed for B2 & C wards.

Private Integrated Shield plans

- Available from five approved insurers.
- No expiry age.
- Lifetime coverage.
- On an as-charged basis.
- No lifetime limit.
- Option to take up a rider to take care of the deductible and co-insurance.

Source: Life Planning Associates

joyceteo@sph.com.sg

wanching@sph.com.sg

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