Hospitalization, long-term care, and major surgery are often associated with extremely high medical costs.
When we choose from various health care options, it may always seem convenient to go with government-subsidized public healthcare in Singapore, especially with the high quality of treatment available there. But why do many people still choose private hospitals, and how do they afford it?
You see, there is always a trade-off between selecting the most budget-friendly option and forgoing some level of comfort, be it privacy, lack of wait time, or whatever else you can think of. While it is true that public hospitals can provide the basic medical treatment, the services offered by some private hospitals can make all the difference.
Why people prefer private hospital are based on the following:
- In public hospitals, you’ll be put on a waiting list for an appointment, see the specialist the next day, and have the surgery within 48 hours.
- In private hospitals, you have the option to choose your own doctor, whereas in public hospitals, you’ll have any doctor available to treat you.
- In private hospitals, you have the option to choose where you’ll stay. Whether you want to stay in a large room with seven other patients, or to have an air-conditioned room all to yourself.
Having the option of seeing a specialist and getting treatment quickly can be a huge boon for patients who are eager to recover quickly from illness.
How can you describe your coverage?
These are the primary types of health insurance in Singapore that cover hospitalization:
MediShield Life
The CPF Board administers the basic health insurance plan– MediShield Life. Cancer chemotherapy, kidney dialysis, and other expensive outpatient treatments are some of the expenses covered by MediShield Life. Pre-existing conditions are not a problem, as all Singapore citizens and permanent residents are guaranteed lifetime coverage. MediShield Life provides varying degrees of coverage depending on the hospital and ward you’re admitted to (B2/C kinds; those in A/B1 or a private hospital receive less coverage).
MediSave
The MediSave scheme is another government program that requires regular income deductions from people’s CPF accounts for medical expenses. You and your family can use this fund to get necessary medical care, such as surgery, hospitalization, health screenings, and insurance. Therefore, MediSave can be used to supplement what MediShield Life doesn’t pay even before you have to pay out of pocket.
Integrated Shield Plan (IP)
Your MediShield Life can be paired with an Integrated Shield Plan (IP) purchased from a private insurer. This implies that MediShield Life will pay for some of your covered expenses (the exact percentage will vary depending on the hospital and the specific ward you are in), and your insurance company will pay for the rest (according to the plan purchased). Please note that IPs in Singapore are not allowed to pay for the entirety of your hospital cost; instead, you will be responsible for a deductible and any applicable co-insurance or co-payments. You can use your MediSave funds to pay for your IP premiums (this also applies to your MediSave Life premiums).
IP Riders
At last, you have access to IP Riders. These are extra features introduced to your Integrated Shield Plan (IP) that help lower your out-of-pocket costs for medical care. The goal is to minimize the amount of money you have to spend. Depending on your policy, riders may include perks like emergency medical care, cash benefits in the event of hospitalization, and even ambulance rides. However, there is currently no other option for paying IP Rider premiums besides cash.
How does IP help you make your private hospital expenses affordable?
In Singapore, we have access to basic medical care at much reduced costs, which is an advantage for us that other countries don’t have. This means that even before our private insurance comes in, we already benefit with subsidies on our hospital expenditures through various government programs and policies.
However, hospital costs can be extremely expensive. Thus, many of us purchase a hospital plan, also called an Integrated Shield plan or IP, to reduce out-of-pocket expenditures (also called cash outlay) or to provide coverage above and beyond the basics (including private hospital treatment).
How much would your bill cost with an Integrated Shield Plan?
Because the cost varies for each medical procedure, we’ll use the five typical procedures examples shown from the MoneySmart article.
Out-of-pocket costs for five common procedures at a Singapore private hospital
See an example of breakdown of what you could expect to pay at a private hospital with or without an Integrated Shield Plan based on five common procedures.
Private Hospital Vs. Restructured Hospital
We’ll use the MoneySmart article’s sample breakdown of medical costs as an example. We’ll compare the patient’s total hospital costs at both the private hospital and the restructured hospital after surgery.
Here is an estimate of a hospital bill based on the various levels of coverage.
Because the patient stayed in a private hospital, his MediShield Life claim will be calculated at 25% of the total bill. He must pay the excess of the total bill after considering the pro-ration factor.
Assuming the patient chose to go with a restructured hospital instead. Here is an estimate of his hospital bill based on the various levels of coverage.
The patient’s MediShield Life claim will be calculated based on 43% of the bill because he stayed in a B1 ward of a restructured hospital. He must pay the excess of the total bill after considering the pro-ration factor.
Integrated Shield Comparison : Private hospital IPs & IP Riders
Comparison between a private hospital and a restructured hospital
Based on the scenarios presented above, the client’s out-of-pocket costs in a private hospital with the appropriate insurance plan is still reasonable. So, the following are some justifications why you should opt a private hospital over a restructured hospital:
Waiting time
According to the Ministry of Health, the average waiting time for admission in a restructured hospital is reported to take at least 1 to 6 hours. In contrast, private hospitals typically admit patients within the first hour of their arrival.
A hospital’s wards come in a wide range of “classes,” or levels of comfort and privacy. For instance, in a B2 ward, you might have to share a room with up to five other patients and a common bathroom. You also might have no access to air conditioning, a private television, or even have your own choice of meals. In restructured hospitals, class A wards are afforded with enhanced levels of privacy and comfort.
You may already be aware of how a restructured hospital operates, where patients may have to wait weeks or months to get an appointment or a surgical slot, whereas people who go to a private hospital can somehow get treatment within the week. This is due to the fact that the restructured hospitals can service many more patients at once than private hospitals. Thus it’s really first come, first served.
Then it is certainly true that subsidies for B2 and C class wards are much higher than the insurance premiums for restructured hospitals. Some patients could enjoy the idea of being in a ward with other patients, while others would settle with a ward without air conditioning.
If you’re satisfied with basic treatment, you can choose to stick with MediShield Life alone and opt not to get an IP. You will only have access to class B2 and C wards, and pre- and post-hospitalization out-of-pocket medical expenses will not be covered.
In rare circumstances, the person may also be covered by his or her employer’s hospital insurance plan; however, this may be subject to restrictions and co-payments set by the employer, and the plan would terminate should the person ever leave the company (or retire).
Overall, it actually relies on a person’s preferences for medical treatment and the amount of money that person has set up for insurance.
Here are three tips for keeping medical coverage low-cost:
I understand if you want to go all out and get an Ip from a private hospital. Some people would prefer to pay extra to avoid using the public healthcare system, and we can all see why.
Private IPs can be quite pricey. Here are three suggestions for reducing the cost of your insurance premiums:
Even if you sign up for an Integrated Shield plan, you’ll still be responsible for a portion of your healthcare costs out of pocket or through Medisave.
Similar to auto insurance excess, you’ll be responsible for a deductible (up to $3,500) and co-payment (10% of your bill) before your insurer starts paying anything. For example, you have a $10,000 private hospital bill, that’s $3,500 + $1,000 = $4,500.
Most of the aforementioned is covered by an IP “rider,” which means you only have to pay for the copay 5%. Therefore, you will need to pay a $1,000 co-payment for the $10,000 bill. However, rider premiums can be as expensive as the IP itself, and they must be paid in advance (no Medisave).
If a rider is affordable and within your price range, it’s a good idea to have one. Conversely, if you have sufficient Medisave funds or emergency cash on hand, you can get by without a rider at all.
Insurance companies are not charitable organizations; rather, they are firms that must generate a profit. Because of this, clients who file too many claims should be given an advantage of a stealthy increase in their premiums.
Customers aren’t the only ones to blame, though. When some hospitals learn that an insurance company would be paying the bill, some of them start charging excessive fees. In any case, the insurers would have to pay out a lot of money, therefore the cost would be passed on to policyholders as higher premiums.
Finding an insurance company that contracts with a panel which maintains a list of preferred healthcare providers, is the key. It is annoying to have to walk through a panel, you’re right about that. While it’s good news that the insurance is making an effort to keep costs down, it probably implies that our premiums will go up.
You are not required to renew your annual Integrated Shield plan after it has expired.
If you have the option to compare different health insurance policies, you should absolutely do so. Take it from someone who needs to revise this page annually: IP premiums and coverage levels do change.
However, keep in mind that if you decide to switch insurance companies, you will be subject to medical underwriting. What this implies is that any medical issues that emerged after you stopped being covered by your old insurer would be labeled “pre-existing” and will not be paid for by your new insurance.
Regardless of which insurance company you choose, your premiums will increase after a certain age. You may wish to downgrade your coverage from private to Class A if costs are a concern. (“Downgrading” is usually an uncomplicated process, but “upgrading” to a higher tier may include medical underwriting.)
Choosing an integrated shield plan based on the level of coverage you need is more significant than the cost of the annual premium.
Getting yourself an Integrated Shield Plan is simple and quick
You can afford the best care possible without worrying about out-of-control medical bills if you have sufficient health insurance. With the right Integrated Shield Plan and IP Rider, private hospitals can be affordable; an out-of-pocket fee of $700 is the same as having a one night staycation in a 5 star hotel or overseas travel. Instead of worrying about your and your loved one’s health for the next few months, why not spend this $700 on some much-needed peace of mind at a private hospital?
No idea whether or not your current insurance policy includes an Integrated Shield plan, and/or IP rider? If you want a more accurate cost estimate for hospitalization, you should definitely talk to your financial advisor to see what kind of coverage you currently have.