Financial: Purchase A Private Integrated Shield Plan Pronto

Once upon a time, a private tutor's elderly father was admitted to a public hospital for treatment of Diverticulitis (small sacs developing in the colon wall). Thankfully his condition wasn't sufficiently serious to warrant a round of surgery, and he was treated with a course of strong antibiotics administered intravenously over a period of 48 hours.

Then came the hospitalization bill, which was substantially huge enough to induce a mild heart attack. While every Singaporean and permanent resident is automatically enrolled in the national MediShield Life insurance scheme which provides a payout to reduce the overall financial burden, whatever is left of the pending fees can still cause many sleepless nights. Fortunately this lad was astute enough to secure a private integrated shield plan for his dad years back, and he needn't fork out a single cent in the end. Moral of the story? Get yourself and your loved ones sufficient, relevant insurance coverage. This is a true story by the way.

The components of a typical hospital bill, and how MediShield Life factors in the scheme of things

Let's start from the very beginning and be properly acquainted with the stuff that constitutes a hospital bill. It is essentially made up of 3 portions:

1. X: A co-insurance component (perceived percentage of the bill size which you are responsible for)

2. Y: A deductible component (a fee you must pay in an insurance claim before actual coverage kicks in)

3. Z: An outstanding aggregate component net of the co-insurance and deductible components

Put it simply, if we let the total hospital bill be H dollars, then H=X+Y+Z. For the co-insurance and deductible components, they can be settled by means of using cold hard cash and/or existing funds from one's Medisave account. For example, a hefty $11,000 bill will see it comprising a deductible component of $3000 and co-insurance component of $800 (10% of overall bill net deductible, ie $11000 - $3000 =$8000), plus a final component net of the first two cited, ie $11000 - $3000 - $800 = $7200.

This is where MediShield Life comes in, as it will deliver a payout which may or may not cover the entire outstanding amount of $7200 (contingent on which type of hospital and ward one is putting up at, existing claim limits in a policy year etc). In the event it doesn't, one might be inclined to wail big time, because he has to top up the potentially significant shortfall personally.

The need for a private integrated shield plan

Obviously no sane individual would wish to be confronted by such a possibly traumatizing set of circumstances, which is why it is only sensible to seek protection by means of a private integrated shield plan. Such a plan comprises two parts-the mandatory MediShield Life segment and an extended subsidiary umbrella which will help account for costs not originally covered by MediShield Life itself.

Insurers including AXA, Aviva, AIA, Prudential, NTUC and Great Eastern offer a variety of such private integrated shield plans which seek to provide coverage solutions based on quality of stay (private or public medical facility) and other factors including consideration of pre-existing medical ailments. Naturally premiums vary in quantum as well, so be sure to shop around for a bit and take care to only sign off on a genuinely affordable proposition.

Adding a rider component to the plan

As previously explained, while one can opt to use cash and/or Medisave funds to pay off the co-insurance and deductible, an alternative method of resolution is to purchase a rider (from the private insurer) to complement a chosen private integrated shield plan; in such an instance the rider component will invoke the insurer's obligation to take complete ownership of the above-mentioned costs thereafter. How does floating cheerily out the front doors of a hospital with zero debt sound?

Edit: Full riders purchased on and after March 7 2018 shall automatically be converted to partial riders from 1 April 2021 with a minimum co-payment amount of at least 5% (subjected to an annual cap of $3K by most insurers). Full riders purchased before 7 March 2018 remain unaffected and coverage remains at a complete 100%.

Remember, procrastination can be fatal. Take immediate charge of your finances, and always stay safe. Cheers to your health, wealth and future.

Note: This article was written for purely informational purposes. Domain of Singapore Tutoring Experts is not associated with any private insurer, nor does it specifically endorse a particular insurance product sold by any such private insurer.

Domain of Singapore Tutoring Experts shall also not be held responsible for any unintended inaccuracies portrayed. For the latest updates on the MediShield Life scheme, kindly consult the official government website.