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25 September 2020

How to Choose Between MediShield Life, Integrated Shield Plans (IPs) and Hospitalisation Plans

What are the differences between MediShield Life, Integrated Shield Plans (IPs) and hospitalisation plans? Which plan would be appropriate for you? This article explains.

Singapore has a world-class healthcare system, but it does not come cheap. Only about one third of healthcare costs are paid by the government1, the remainder being paid by patients, whether through out-of-pocket payments, private health insurance plans or other means.

In order to ensure that you can receive the necessary medical care whenever you need it, having adequate health insurance is thus critical.

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What are MediShield Life, IPs and Hospitalisation plans?

With so many terms being bandied about such as “MediShield Life”, “Integrated Shield Plan” and “hospitalisation plan”, how do you know what kind of insurance protection you really need?

Let’s demystify the various types of plans and figure out what would be suitable for your situation.

a) MediShield Life

MediShield Life is a basic health insurance plan administered by the Central Provident Fund Board, which helps to pay for large hospital bills and selected costly outpatient treatments. All Singapore citizens and Permanent Residents (PRs) are automatically covered. 

The important thing to note is that MediShield Life coverage is not meant to be  comprehensive. For instance, if you get hospitalised, the plan will only be sufficient to cover subsidized treatment in public hospitals and stays in Class C (9-bedded) or Class B2 (5- or 6-bedded) wards.

On the other hand, if you wish to stay in Class B1 (4-bedded) or Class A (single room) wards at public hospitals or in a private hospital, the difference in price can be huge. If MediShield Life is all you have, you’ll have to pay hefty costs out-of-pocket.

MediShield Life also covers treatment costs for a range of outpatient treatments. However, there are caps to how much you can use. Once you exceed these caps, the rest of the bill will have to be paid by you and/or a health insurance plan you have purchased.

In a nutshell, MediShield Life offers a basic layer of protection, but there is no guarantee that it will be able to cover all, or even most of, your hospital bills. In addition, if you get hospitalised in private hospitals or Class B1 and Class A public hospital wards, you will find that MediShield Life payouts will cover only a small proportion of your bill.

b) Integrated Shield Plan (IP)

Singapore citizens and PRs already have a basic level of health insurance coverage thanks to MediShield Life. If you plan to use an A/B1-type ward in a public hospital or go to a private hospital for future hospitalisations, you can consider purchasing a MediSave-approved private Integrated Shield Plan.

Simply put, an IP is a hospitalisation plan that complements MediShield Life by providing more comprehensive coverage without duplicating the protection already offered by the latter.

With an IP, you will be able to enjoy coverage when you stay at private hospitals and Class B1 and Class A wards at public hospitals. This means a greater ability to opt for certain doctors or healthcare facilities, which can also result in shorter waiting times.

In addition, as IPs offer much higher claim limits than MediShield Life, you do not have to worry about being saddled with massive out-of-pocket costs if you exceed them.

One thing to note is that IPs have a deductible that must be paid before your insurance protection takes effect, as well as co-payment component2, which means that you always need to pay a portion of your medical bills out-of-pocket and cannot rely on the IP to pay 100% of your costs.

The minimum co-payment portion is typically 10% with a deductible of $1,500 to $3,500 a year if you do not purchase any optional riders aimed at reducing it. The lowest possible co-payment is 5% with the purchase of an optional rider. An optional rider can also have your insurer cover up to 95% of your deductible.

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c) Hospitalisation plan

As you might already have guessed, MediShield Life and IPs are both a form of hospitalisation insurance—that is, insurance that pays your medical bills if you get hospitalised.

However, MediShield Life and IPs are not the only form of hospitalisation plan available. If you are a non-PR foreigner, you do not have MediShield Life or IP protection. You can instead select from a range of other hospitalisation plans offering coverage in Singapore.

Some plans will also cover you internationally and are thus ideal for expatriates who intend to leave Singapore after some time.

 

How to choose between MediShield, IPs and hospitalisation plans

For Singapore citizens and PRs who already have MediShield Life coverage, the most economical option would be to purchase an IP.

Many local insurers offer IPs, making the market quite competitive, so it pays to compare integrated shield plans before buying. You can consider an integrated shield plan with features that are appropriate to your circumstances.

If you are a non-citizen residing in Singapore without PR status, you do not receive MediShield Life coverage. It is thus critical that you get a hospitalisation plan during your time in Singapore.

You will want to consider hospitalisation plans that cover hospital charges and related outpatient fees in Singapore. Some IPs and their IP riders are also available to non-Singaporean, non-PR applicants at a higher premium, although policyholders are still subject to deductibles and co-payment.

Opt for a hospitalisation plan with no co-insurance or deductible if you do not wish to share part of the payment of your medical bills with the insurer. Another thing to look out for is guaranteed renewal, so you can enjoy continued protection even if you have already made claims. Manulife’s ManuCare is one example of a hospitalisation plan that satisfies both criteria.

 

Case studies

Michelle is a 35-year-old Singaporean. As a Singapore citizen, she is automatically covered by MediShield Life. In order to complement her MediShield Life coverage, she purchases an IP, adding an optional rider so that she can reduce her co-payment portion to 5% and have 95% of her deductible covered by the insurer. If Michelle gets hospitalised, after she pays her deductible, her IP will pay 95% of her eligible hospital bills. The remaining 5% will be paid by her.

Brian is a 35-year-old Australian citizen working in Singapore on an Employment Pass. He does not have PR status. He decides to purchase a hospitalisation plan, opting for Manulife’s ManuCare. As his plan has no co-insurance or deductible, he has peace of mind knowing that 100% of his eligible hospital bills will be reimbursed at no cost to him.

By now, you should have a better idea of whether or not you have MediShield Life coverage, and whether an IP or hospitalisation plan would be appropriate for you.

Your next step? Undergo a financial review to identify your financial gaps (if any). Click here to find out more about how Manulife’s ManuCare can cover your medical bills.

Footnotes
1. https://onlinelibrary.wiley.com/doi/full/10.1111/1758-5899.12247
2. https://www.channelnewsasia.com/news/singapore/5-per-cent-co-payment-new-integrated-shield-riders-10021398

Disclaimer:

ManuCare is underwritten by Manulife (Singapore) Pte. Ltd. (Reg. No. 198002116D). This advertisement has not been reviewed by the Monetary Authority of Singapore. Buying a life insurance policy is a long-term commitment. This policy has no cash value. Buying health insurance products that are unsuitable for you may affect your ability to finance your future healthcare needs. This article is for your information only and does not consider your specific investment objectives, financial situation or needs. It is not a contract of insurance and is not intended as an offer or recommendation to purchase the plan. You can find the full terms and conditions, details, and exclusions for the mentioned insurance product(s) in the policy contract.

This policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you. For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact us or visit the LIA or SDIC web-sites (www.lia.org.sg or www.sdic.org.sg).

We recommend that you seek advice from a Manulife Financial Consultant or its Appointed Distributors before making a commitment to purchase a policy. Information is correct as of 26 August 2020.

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