Understanding IPs and MediShield Life

Photo: ST

The Ministry of Health (MOH) has announced new "Additional Withdrawal Limits" to assist Singaporeans in paying for their Integrated Shield Plan (IP) premiums using Medisave.

We answer some questions on the new limits, MediShield Life and IPs.

Q: Who does yesterday's Medisave announcement affect?
A: It will affect only older people with private IPs as they will be able to use more of their Medisave funds to pay their premiums.

Currently, many seniors need to top up their IP premium with cash. With the change, fewer will need to do so, or need to top up less with cash.

MOH estimates that about 200,000 will need to fork out less cash for their IP premiums.

Currently, everyone under the age of 50 years can use Medisave to pay the entire premium of even the most costly private hospital IP. Those who have IPs covering B1 class in public hospitals will continue to have their premiums entirely payable by Medisave up till the age of 60.

There will be no change for these two groups.

People on the basic MediShield already have all their premiums covered by Medisave, and this will not change when MediShield Life is launched.

Q: How does the Additional Withdrawal Limit work?
This amount - $300 for people younger than 40 years, $600 for those whose age next birthday is 41 to 70 years, and $900 for those who are older - can be used to pay the private portion of their premium.

The MediShield Life portion will be entirely paid for by Medisave and is not part of the Additional Withdrawal Limit.

Q: What is an IP and how are premiums for it paid?
It is a private insurance plan that builds on what MediShield - and later, MediShield Life - has to offer. You can pay premiums to your private insurer using your Medisave account, subject to a certain limit.

Q: What is the difference between MediShield Life and IPs?
Every Singaporean and permanent resident will automatically be covered by MediShield Life when it is launched at the end of this year. This provides enough coverage for big hospital bills incurred in subsidised B2 or C class wards in public hospitals.

People who plan to use private care, such as at public hospital B1 or A class, or at private hospitals, need to top up to an IP offered by one of five insurers. They pay higher premiums, part of which goes towards paying for their MediShield Life.

Q: Why are MediShield Life premiums higher than MediShield premiums when both cover public hospital subsidised class treatment?
MediShield Life will provide better coverage. For example, your share of co-payment for big hospital bills will go down from 10-20 per cent to 3-10 per cent.

The amount you can claim each year will go up from $70,000 to $100,000. There will also be no limit to the amount you can claim in your entire life. Currently, your insurance stops once you have claimed $300,000.

Q: Is there any advantage to having an IP if I plan to opt for subsidised care?
Yes, there are some advantages.

Most IPs have higher annual coverage. MediShield Life will pay up to $100,000 a year. You will have to pay any additional bills beyond that.

Should you suffer from kidney failure and need dialysis, MediShield pays for dialysis at subsidised rates. If your income or house type makes you ineligible for subsidised dialysis, you will need to pay the private rate, which will not be fully covered by MediShield Life.

This is an important consideration if you are diabetic, as your risk of getting kidney failure is higher than normal. With kidney failure, unless you get a transplant, you will need regular dialysis for the rest of your life.

Q: With MediShield Life, I am not sure whether to drop my IP.
The best thing to do is to hang on to your current plan for one more year, says MOH. When MediShield Life is launched, the overall IP premiums will be revised. By early next year, the picture will be clearer and you can then decide on the best scheme for you and your family.

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