Is Your Health Insurance Coverage Ready for the Future?
Singapore can be a pretty great place to call home, but the rising cost of living is a reality we all face. Among these challenges, healthcare inflation is particularly concerning.
What exactly is healthcare inflation? Put simply, it refers to the increasing cost of medical care. This is a growing concern, given projections from the WTW Global Medical Trends Survey that medical insurance costs in Singapore projected to rise by 12% in 2025. MediShield Life premiums are also slated to increase by up to 35% starting April 2025.
As someone in your 30s or 40s, you’re likely juggling life’s milestones – building a career, paying for your mortgage, and supporting ageing parents. Rising healthcare cost can add to the financial strain, affecting your MediSave balance and prompting you to rethink your financial strategy for saving, investing, and planning for the future.
Does your health insurance provide enough protection against the rising cost of medical expenses?
If you’re not so sure, this might be the time to review your health insurance coverage and explore ways to strengthen it for better financial resilience.
What Is Health Insurance?
It’s important to understand what health insurance actually is before we proceed (and as a matter of fact, it’s also helpful to familiarise yourself with other main types of insurance as well).
While it’s commonly known that health insurance includes coverage for medical and hospital bills, it’s more than just that.
Health insurance in Singapore consists of government programs like MediShield Life, and private plans such as Integrated Shield Plans (IPs) to protect against financial crises caused by medical needs. Health insurance is also about future-proofing your finances, protecting against the financial strain of high medical cost, and providing access to as many treatment options as possible when necessary.
Here’s a quick rundown of health insurance in Singapore.
1. Hospital and Medical Insurance
MediShield Life is a basic health insurance plan for all Singapore Citizens and Permanent Residents managed by the Central Provident Fund (CPF) Board. It helps cover large inpatient bills and day surgery bills, as well as selected outpatient treatments such as kidney dialysis. Additionally, it covers rehabilitative and sub-acute care incurred in community hospitals and inpatient palliative care services.
MediShield Life also offers universal coverage, including those with pre-existing conditions such as diabetes, high blood pressure, and high cholesterol.
This should not be confused with MediSave, which is a mandatory personal healthcare savings account under the CPF system, set aside for your medical needs and expenses. It can be used to pay for health insurance premiums (e.g., MediShield Life), hospitalisation, day surgery expenses, and outpatient treatments not covered by MediShield Life – such as chronic disease management, vaccinations, and health screenings.
Integrated Shield Plans
Integrated Shield Plans (IPs) are private medical insurance plans offered by private insurers with additional coverage on top of what you already have under MediShield Life. Coverage includes private hospitals, higher ward classes (A and B1) in public restructured hospitals, standard single-bedders in private hospitals, and higher claim limits.
IPs also cover a wider range of treatments such as pre- and post-hospitalisation consultations, diagnostic scans (e.g., MRI, CT scans), and may offer coverage for alternative treatment options like Traditional Chinese Medicine (TCM) and other complementary therapies through additional riders.
You can also pay for IP premiums using MediSave, but this is subject to the Additional Withdrawal Limits (AWLs). Any premium above the approved limit must be paid in cash.
2. Critical Illness Insurance
Unlike MediShield Life and Integrated Shield Plans, critical illness plans typically provide a lump sum payout to help with treatment costs and to help tide you and your family over for living expenses and income loss during recovery from critical illnesses such as cancer, stroke, heart disease, or kidney failure.
3. Hospital Cash Insurance
This type of insurance provides you with a fixed amount of money for each day that you’re hospitalised. This amount is separate from the medical costs that are incurred during your hospital stay.
Think of it as a daily allowance to help cover extra costs while hospitalised, which you can use at your own discretion.
4. Disability Income Insurance
Disability income insurance is an income replacement coverage when you’re disabled due to an accident or illness and unable to work.
It typically pays a monthly sum, like a salary, covering up to 80% of your average monthly salary for a period up to 5 or 10 years, or until age of 60 or 65. This sum would usually have been selected by the policyholder based on their needs at the time the insurance was purchased (note that a higher sum received also means higher premiums paid). While the policy is intended to ease financial strain during periods of disability, it may not fully replace your entire income.
5. Long-Term Care Insurance
Long-term care insurance helps pay for the care you need when you’re unable to perform a number of Activities of Daily Living (ADLs) such as washing (e.g., bathing or getting in and out of the bath/ shower) and dressing.
Government-provided ElderShield or CareShield Life are examples of long-term care insurance that provide financial support when you are no longer able to take care of yourself.
How Integrated Shield Plans Can Boost Your MediShield Life Coverage
When considering health insurance, it’s crucial to balance coverage with affordability. Integrated Shield Plans (IPs) offer a way to enhance your MediShield Life coverage by providing higher claim limits and broader benefits.
Pair It With an Integrated Shield Plan
Integrated Shield Plans (IPs), such as Enhanced IncomeShield, work hand-in-hand with MediShield Life to provide more comprehensive coverage. They help alleviate the burden of your medical and hospitalisation expenses by further reducing your out-of-pocket costs.
For example, benefits under our Enhanced IncomeShield plan include a claim limit of up to S$1.5 million in each policy year1 for medical treatment. With applicable riders, you also get up to 23x2 the MediShield Life monthly claim limit for outpatient treatments3 listed on the Ministry of Health’s Cancer Drug list (CDL) for one primary cancer, and access to our panel4 of over 600 specialists.
Moreover, you can pay for your IP premiums using MediSave, up to the approved AWLs, while rider premiums must be paid in cash. This keeps your coverage affordable while providing you additional coverage to boost your financial security well into the future.
Understanding the Differences Between MediShield Life and Integrated Shield Plans
How To Choose the Right Health Insurance Plan
Having enough health insurance is important, but don’t make the mistake of getting more than you need, or worse, something you totally don’t need -- this can put an unnecessary strain on your finances.
So, how much health insurance is enough? How do you determine what is too much or too little? We have some tips to guide your decision.
1. Consider Your Existing Coverage
When choosing a policy that suits your healthcare needs, ask yourself these three questions:
- What coverage do I already have?
- Do I really need the additional coverage?
- What are my options?
If you think you may want to be covered for pre- and post-hospitalisation treatment, as well as other outpatient treatments like MRI and CT scans, then you’d probably need more comprehensive coverage – just be aware of the higher premiums that come with it.
Another important consideration is your employer’s insurance coverage. If you have health and disability insurance as part of your employment benefits package, remember that these benefits often end when you leave your job or retire. While it may seem attractive to avoid paying for duplicate coverage to save on premiums, maintaining personal insurance can ensure you stay protected beyond your employment.
2. Your Healthcare Preferences
Start by asking yourself:
- Do I need to stay in a private hospital?
- If I stay in a public restructured hospital, do I need to stay in A (single-bedded) or B1 (4-bedded) ward classes?
- Do I want to choose my own doctor?
If your answer is “yes” to any of the above questions, then it’s better to consider more comprehensive coverage that IPs provide. Do note that your premiums will also be higher.
MediShield Life’s basic coverage includes stays in public restructured hospitals’ B2 (6-bedded) and C (8-bedded) ward classes, which are under the care of a team of doctors assigned to patients. While this provides diverse expertise, it may result in less personalised care since patients may not have one doctor managing their treatment.
3. Can I Afford the Premiums?
According to Life Insurance Association’s (LIA) Basic Financial Planning Guide, a good rule of thumb is to spend no more than 15% of your income on insurance protection.
For starters, IPs can be paid using MediSave (up to AWLs), which helps with upfront cash payments. However, do note that IP premiums will increase with age, especially when you hit your 70s and 80s – potentially becoming up to five times higher than MediShield Life premiums.
Not overbuying health insurance will allow you to focus on other priorities, such as optimising your savings, investments, and debt repayments with the money that you “save”.
4. Life Stage and Milestones
If you start on health insurance when you’re younger, it may not be necessary to get much more coverage beyond the basic offering.
You can always add on riders for additional coverage areas as you become financially stable later in your career, when you start a family, or when you’re nearing retirement.
Speaking about getting health insurance when you’re young – it’s important to note that health insurance premiums are tagged to your age and health condition. So, the younger you are, the lower your premiums will be. Being younger also puts you at lower risk of having pre-existing conditions, allowing for more comprehensive coverage.
With plans such as our Enhanced IncomeShield, your future premiums will not be affected by your claims history5.
With comprehensive coverage options for a variety of budgets out there, our Integrated Shield Plans are likely to cater to your needs, with different plans designed for different budgets.
Is Getting an Integrated Shield Plan Worth It?
Rising healthcare costs make it essential to review your health insurance coverage regularly to ensure you’re sufficiently protected.
If you wish to stay in higher tier wards or private hospitals and want the option to choose your own doctor, then an Integrated Shield Plan (IP) can better protect your finances against unexpected medical bills – just be aware of the higher premiums that also increase with age.
If the higher premiums later in life are potentially unsustainable, it may be best to consider sticking with MediShield Life coverage or consider getting Integrated Shield Plans that offer a good balance of premiums and coverage, as some plans provide basic benefits for higher-tier wards in public restructured hospitals while keeping the premiums affordable.
If you wish to explore getting an Integrated Shield Plan, consider speaking to an Income advisor to get personalised advice based on your financial situation and healthcare needs.
1Applicable for Enhanced Preferred plan only.
2 Enhanced IncomeShield covers 5x MediShield (MSHL) Limit and 18x MSHL Limit for one primary cancer when you add a Deluxe Care or Classic Care rider to your Enhanced Preferred or Enhanced Advantage plan.
3This benefit covers the main outpatient hospital treatment received by the insured from a hospital or a licensed medical centre or clinic. For cancer drug treatment, only cancer drug treatments listed on the Cancer Drug List (CDL) and used according to the indications for the cancer drugs, as specified in the CDL on Ministry of Health (MOH) website (go.gov.sg/moh-cancerdruglist) will be covered. For each primary cancer, if the cancer drug treatment on the CDL involves more than one drug, we allow a particular drug to be removed from the treatment or replaced with another drug on the CDL that has the indication ‘for cancer treatment’, only if this is due to intolerance or contraindications (for example, allergic reactions). In such cases, the claim limit of the original cancer drug treatment on the CDL will apply.
For each primary cancer, if more than one cancer drug treatment is administered in a month, the following will apply.
- If any of the cancer drug treatments that are on the CDL has an indication that states ‘monotherapy’, only the treatments on the CDL that have the indication ‘for cancer treatment’ will be covered in that month.
- If none of the cancer drug treatments that are on the CDL has an indication that states ‘monotherapy’:
- if more than one of the cancer drug treatments administered in a month has an indication other than ‘for cancer treatment’, only cancer drug treatments that are on the CDL and have the indication ‘for cancer treatment’ will be covered in that month.
- if one or none of the cancer drug treatments administered in a month has an indication other than ‘for cancer treatment’, all cancer drug treatments that are on the CDL will be covered in that month.
Cancer drug treatments not on the CDL will be considered as having an indication other than ‘for cancer treatment’.
For insured receiving treatment for one primary cancer, we will pay up to the highest limit among the covered cancer drug treatments on the CDL that are administered in that month.
The cancer drug treatment on the CDL benefit limit is based on a multiple of the MSHL Limit for the specific cancer drug treatment. For the latest MSHL Limit, refer to the CDL on MOH’s website under “MediShield Life Claim Limit per month (go.gov.sg/moh-cancerdruglist). MOH may update this from time to time. The revised list will be applicable to the cancer drug treatment which occurred on and from the effective date of the revised list
4Panel or preferred partner means a registered medical practitioner, specialist, hospital or medical institution approved by us. The list of approved panels and preferred partners, which we may update from time to time, can be found at income.com.sg/specialist-panel. Our list of approved panels also includes all restructured hospitals, community hospitals and voluntary welfare organisations (VWO) dialysis centres.
5 The premiums of Enhanced IncomeShield are based on factors such as medical inflation and overall claims experience. There is no additional premium loading on individual policies that have made claim(s).
This article is meant purely for informational purposes and does not constitute an offer, recommendation, solicitation or advise to buy or sell any product(s). It should not be relied upon as financial advice. The precise terms, conditions and exclusions of any Income Insurance products mentioned are specified in their respective policy contracts. Please seek independent financial advice before making any decision.
These policies are 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 Income Insurance or visit the GIA/LIA or SDIC websites (www.gia.org.sg or www.lia.org.sg or www.sdic.org.sg).
This advertisement has not been reviewed by the Monetary Authority of Singapore.
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