Hospital Insurance Hack
With rising healthcare costs in Singapore, most Singaporeans will need some form of hospitalisation insurance to cover for the major expenses in life. Typically, a simple surgery at a B2 ward can set Singaporeans back about $4000 – $10,000 in under 5 days.
For more advanced surgeries such as heart bypass surgery, this value can easily rise above $30,000 in a A ward and above $80,000 in private hospitals.
Hence it is wise for Singaporeans to get a shield plan especially when it costs less than $500 for those below 40.
What is hospital insurance?
To put things simply, hospitalisation plan refers to insurance that reimburses you for your hospitalisation bill.
Today, hospital insurance covers up to 95% of all your bills, meaning you’ll only have to pay 5% of whatever cost incurred.
3 Part – Basic structure of hospital plans
Your hospital plan consists of 3 parts:
1. Basic Medishield life (compulsory)
2. Integrated shield plan
3. Cash rider
With all 3 parts in place, most of your hospitalisation expenses will be covered. Let us dissect each of these to determine the differences of each of the plans.
1. Basic Medishield life (compulsory government plan)
When you are born, all Singaporeans will be automatically enrolled into Medishield life. This is a very basic hospitalisation plan that the government mandates for all Singaporeans to get.
It’s payable by Medisave, hence no cash involved and usually involves subsidies to ensure that Singaporeans can afford it.
However, basic Medishield life coverage is rather limited though.
In essence, it only covers hospitalisation in government C/B2 wards. These wards are the 6-8 bedders with no aircon, basic amenities where training doctors go around to practise on sick patients.
Additionally, Medishield Life covers a maximum of only up to $2600/surgery for the most severe surgery such as heart bypass surgery, muscle transfer surgery, mouth dissection etc…
For minor hospitalisations, the coverage is much lower and hence your out-of-pocket expense increases.
Let us talk numbers how much you’ll have to pay without an integrated shield plan:
The values here are taken via MOH website and exclude all subsequent medication and follow up
| Hospital Type | Angioplasty | Heart Bypass | Appendicectomy |
| Government A | $19,000 | $35,000 | $9,791 |
| Government B | $17,000 | $17,000 | $7,023 |
| Private | $34,956 | $81,338 | $24,090 |
As we can see, without shield plan the hospital bills are rather expensive and Medishield life covers only max $2600 of the bills.
That is why people typically do an upgrade to integrate shield plan + cash rider to cover all health care expenses.
2. Integrated shield plan base plan:
So when people do an upgrade what happens is they upgrade their hospitalisation coverage from:
1. B2 ward to private hospital ward
2. $2600/surgery to as-charged
Meaning the integrated shield plan base plan will cover all the medical bills, subjected to a deductible and co-insurance of 10%
This base plan is honestly a brainless upgrade as it is mostly payable by Medisave.
And if you did not know, Medisave generates an interest of 4% p.a. with a cap of $63,000. Meaning most working adults would get an interest of $2520 every year to pay for insurance.
The base plan itself, while cheap and cashless, has one flaw. IT HAS A DEDUCTIBLE meaning:
1. For all treatment, you’ll have to pay $3500 out of pocket first
2. Then 10% of the remaining bill.
3. EG. $10,000 bill size, you’ll have to fork out $4150.
Hence, most people will simply attach a cash rider
3. CASH RIDER:
Cash rider is basically the holy grail of hospital insurance. If you do not intend to get this, then don’t bother getting insurance at all.
What cash rider does is it pays the deductible of the base plan and half of the co-insurance. Too complicated? Don’t worry!
Simply put with cash rider, you’ll just have to pay 5% of all bills, with your maximum payment at $3000 a year.
Example time!
So with a cash rider for the same $10,000 bill size, you’ll only have to pay $500
Say, if your surgery cost goes up to $100,000 in a year, you’ll only have to pay max $3,000.
CASH RIDER takes away most expenses from your hospital bills.
And now you should be thinking, for such high coverage, how much does cash rider cost?
Actually, it’s pretty cheap! for a $1.5million coverage in a private hospital, you pay less than $1K for most of your life!
Now lets relook at the same table for costs of hospital bills with rider and without.
We can see the significant costs savings of hospitalisation bills when someone gets a rider. You just need one hospitalisation in 10year period, and you’d have earned back all the money you’ve used to “get” insurance. Plus, you have the peace of mind knowing you are insured and you have the choice to seek whatever treatment in any medical institute in Singapore!
Conclusion:
TLDR;
Hospital plan made up of 3 parts:
1. Medishield life (compulsory)
2. Basic integrated shield plan upgrade (Medissave payable)
3. Cash rider (low-cost cash insurance)
Together, these 3 basic plans will cover for up to 95% of all hospital expenses incurred in Singapore up to private standard ward. The max hospital bills you’ll pay in a single year will only be $3,000.
If you have not done so, do speak with your financial advisor to review your coverage. Once you are hospitalised, it is very difficult to get covered.
Disclaimer: This is not financial advice. For more info please speak to your financial advisor directly