We know that we are all covered under Medishield Life already. So what are Medishield Integrated Shield plans (IP)? Why do we need them and should we consider purchasing them?
Medishield IP is an additional hospitalization coverage above what Medishield already gives you, which includes coverage in private hospitals that Medishield Life does not provide. Think of it as an upgrade of your Medishield Life.
While the list is not exhaustive, here are the main enhancements of IPs over the normal Medishield Life plans:
- Covers hospitalization in private hospitals
- Greater coverage on Class A/B1 wards
- Increased coverage of most benefits provided under Medishield Life
- Higher lifetime and annual claim limits
- Covers pre and post hospitalization expenses
- Covers pregnancy complications
So having understood the general advantages of IPs over Medishield Life, the next obvious question will then be whether paying for these additional benefits are worthwhile? We will then need to tackle this question on 2 separate levels: NEEDS and WANTS.
By ‘Needs’, I mean the basic costs that will be incurred when something unfortunate incident happens like hospitalization or diagnosis of a serious illness. We do not have the choice not to pay for these costs. ‘Wants’ on the other hand are the additional luxuries we would like to have in the event of such unfortunate events that we do not necessarily need, but it is a personal preference to have them. Let’s talk about ‘Needs’ first and I will focus on only 2 main needs that I believe everyone must consider.
1. Hospitalization Stay Costs. On the most basic level, Medishield Life is a hospitalization plan that is largely meant to help us cover the bills of hospitalization. Medishield Life provides a basic coverage of $700/day in a normal ward and $1200/day in ICU. To give you some point of reference, Singapore General Hospital charges $35/day for Class C ward and $75/day for Class B2. That excludes all additional charges like doctor’s fees, nursing care, medicine, etc. But at $700/day under Medishield Life, it should usually be adequate for most people.
2. Surgical Costs. The next biggest cost during hospitalization is the surgery fees. Coverage under Medishield Life is at a maximum of $2000. That is typically insufficient if we are considering an average to serious surgery. Most IPs will cover the full cost of the surgery fees, which can easily go to 5 figures. Certainly the range of possibilities is wide in this aspect and there are many minor surgery fees like removal of lumps, tonsils or kidney stones that are typically within the range of $1000-$3000, but I think that those are not the conditions we should be concerned about. The purpose of insurance is to protect against major events and in this aspect, the upper limit of surgical fees can be quite astronomical, and is certainly something that everyone should seriously consider and have coverage against. So the question then is, if your surgical fees cost $20,000 or up to $50,000, can you afford not having coverage for it?
3. Medical Treatment Costs. The last most important consideration is cost involved in treatment for specific conditions. The main conditions covered are kidney dialysis, cancer treatment, radiotherapy, chemotherapy, organ transplant and a few others. There is no doubt that the costs involved for these specific treatments will be costly and adequate coverage should be planned for. However, whether IPs are necessarily the most appropriate tools for this planning is largely dependent on the individual. There is another range of insurance products called ‘Critical Illness’ coverage, which can also be used to cover such treatment costs by giving a lump sum upon diagnosis of any of the stated critical illness in the policy. And most life policies (which I believe everyone should have purchased) will include critical illness coverage. So the question is to determine whether you have some form of protection already in place through critical illness coverage in your other plans. Worth noting is that the IPs coverage of medical treatments are quite limited in number and scope and thus if you require medical treatment not listed in the IP, it will not be covered, unlike a Critical Illness cover, which generally includes all major critical illnesses.
4. Desired Ward Class. Going on to the ‘Wants’, IPs cater to those who would like a more comfortable stay in the hospital in higher class wards like B1 and A. With the average Singaporean becoming more affluent, many of us may prefer paying more for the benefit of a more pampered hospital stay. Most of the IPs will cover the full cost of the chosen ward subject to some deductible. Thus if you are one of those who really do not want to be squeezed into a 9-bedded or 6-bedded ward, then IPs will be a good option to offset the additional charges of the comfort in B1 and A wards.
Certainly, a lot more can be said and examined on the pros and cons of IPs, but I have deliberately chosen to focus on the 3 main points that one must necessarily consider when making the decision whether to purchase an IP. If these 3 points all point in the same direction of whether to purchase an IP, then it is highly likely that all the other differences will not make a significant impact in changing the recommendation. However if there is some degree of difference in these 4 points, then you should definitely analyze deeper into the other differences to help you make a decision, which I will be doing in a later post.