Guide to health insurance plans in Singapore (2023)

One inevitable consequence of Singapore's high healthcare standards is that hospital bills tend to be expensive. A large portion of healthcare costs is absorbed by way of government subsidies, while other mechanisms such as Medisave help ensure the general public's ability to pay their share of healthcare costs.

Despite this, there is a mind-boggling array of health insurance plans available on the market. Are they necessary, and how do such plans factor into your overall healthcare portfolio?

To make sense of it all, it helps to sort healthcare plans into three categories:

• Government-mandated healthcare: Subsidies, Medishield Life, Careshield Life
• Optional additional healthcare coverage: Medishield Integrated Plan (IP), Enhanced Careshield Life
• Private insurer standalone plans: Cancer plans, critical illness plans, disability plans, etc

Government-mandated healthcare

Subsidies

Public healthcare in Singapore (i.e., public hospitals and polyclinics) is heavily subsidised by the Government, and patients need only pay a portion of the final bill.

Subsidies are not applied equally across the board; instead, a targeted approach is used, with the largest subsidies reserved for those on the lowest rungs of the economic ladder.

Besides cheaper hospital bills, other subsidised healthcare schemes include Community Health Assist Scheme (CHAS) which partially offset charges at participating clinics, and Enhanced Screen for Life, which offers subsidised screening for heart conditions and certain cancers.

Medishield Life

Medishield Life is a national healthcare insurance scheme that is designed to help Singaporeans pay for their healthcare costs without undue financial stress. It offers a basic level of healthcare coverage that further reduces the portion of healthcare costs a patient has to pay. Premiums for Medishield Life are paid from your Medisave account.

At this point, you may be wondering what's the difference between Medisave and Medishield. Well, Medisave is one of your three CPF accounts that is used specifically for healthcare needs. A portion of your CPF contributions is automatically deposited into your Medisave account, and funds kept therein accrue interest at the prevailing rate.

Meanwhile, Medishield (or rather, Medishield Life) is the name of Singapore's national healthcare scheme.

Careshield Life

Careshield Life is a national healthcare plan similar to Medishield Life.

However, while Medishield Life is for general healthcare purposes, Careshield Life provides lifelong income (as long as you remain disabled) to help with living expenses.

Premiums for Careshield Life are fully payable by Medisave.

Eligibility criteria for government-mandated healthcare

If you're a Singaporean, you automatically qualify for subsidised healthcare under these schemes. However, as mentioned, the level of subsidies you receive will be determined by your household income and/or annual value of your property.

PRs and foreigners are also entitled to join these government-mandated healthcare schemes, although benefits may be lower. You'll need to check your specific eligibility according to your citizenship status.

Optional additional healthcare coverage

Medishield Life Integrated Plan (IP)

If you want more coverage beyond what's provided by your Medishield Life policy, you can opt to purchase an IP. These are healthcare plans that supplement your Medishield Life and give you higher claims limits and additional benefits - depending on the IP you choose.

Note that IPs are provided by private insurers, and you are free to choose any IP that's available on the market. However, premiums for IPs are only partially covered by Medisave up to the annual withdrawal limit; any excess has to be paid out of pocket.

Careshield Life Supplement

Similarly, you can opt to purchase a Careshield Life Supplement from a private insurer to increase the amount of payouts you receive each month when you suffer disability. You may also receive additional benefits, depending on the supplement scheme you pick.

Careshield Life Supplements may be paid via Medisave, but only up to the annual withdrawal limit. Any excess will have to be paid in cash.

Eligibility criteria for Medishield Life IP and Careshield Life Supplement

You are eligible to purchase these plans as long as you are eligible for Medishield Life and/or Careshield Life.

Note that you are free to choose any such plan available on the market, and can also switch plans or insurers at your discretion.

It may be prudent to speak with a qualified financial adviser to help you choose a plan that's best suited to your needs and your budget.

Private insurer standalone health plans

You may have realised that between Medishield Life and Careshield Life (and their respective supplements) most of your hospitalisation and healthcare needs would already be covered. So is there a need for standalone health plans such as cancer plans, critical illness plans and the like?

An astute observation, and a very good question.

It is helpful to think of standalone health plans as additional funding to help you and your family maintain your lifestyle in the aftermath of a severe illness.

For instance, the benefit from a cancer care plan that pays out upon a cancer diagnosis of any stage can be used to temporarily replace your income, allowing you to stop working and focus on treatment and recovery. The extra funds can also be used for alternative treatment or drugs not covered under Medishield Life.

This is important, as most employment contracts do not offer unlimited medical leave. And it goes double for those who do not have company healthcare, such as freelancers, gig workers and the self-employed.

Once again, it is best to engage a qualified financial adviser to work out what is the optimal composition for your healthcare portfolio.

Eligibility criteria for private insurer health plans

Private insurer health plans are available for anyone who can afford them. Generally, as long as you have some form of residency status in Singapore, such as citizenship, or a work permit that allows you to legally reside here, you will be able to purchase such plans.

Note though, that private insurers are unlikely to cover pre-existing health conditions; if they do, you'll need to pay extra on your premiums. Hence, you may face eligibility challenges based on the status of your health.

This is different from Medishield Life, which covers all pre-existing conditions. However, your private insurer may exclude pre-existing conditions in the IP portion of your Medishield Life plan.

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This article was first published in ValueChampion.