Most people find it hard to appreciate just how much Medishield Life will help them with their hospitalization bills. Someone posted this his bill and the calculated coverage from Medishield Life, which I think is an interesting case study to look at.
The patient was staying in a B2 ward and from an original bill of $5k+, it was reduced to $2.3k after government subsidies.
The additional cost of drugs that had to be borne by the patient as it was not one of the subsidized drugs.
From the remaining $2.3k payable bill, only $300 was covered under Medishield Life, and $2k+ was paid by Medisave. So the question is why only $300?
As with most insurance plans, there are deductibles and co-insurance components, and the same applies for Medishield Life. For insured less than 80 years of age, there is a $2000 deductible and a 10% co-insurance. Thus, subtracting the deductible of $2,000 from $2,333, you will get a remainder of $333. Then subtracting the 10% co-insurance portion, which is about $33, will give a final remainder payable under Medishield Life to be about $300.
So what are the lessons to be gleaned from this?
1. Medishield Life, as with most insurance plans, are most keenly felt in situations of high medical expenses, far in excess of deductibles and co-insurance.
Many people having seen that Medishield Life only paid about $300 of the total bill of the original $5k (before the government subsidies), lament how useless the plan is. But they do not see the full picture. After subtracting subsidies, the remainder payment of $2,333 is barely above the deductibles and co-insurance. As a result, Medishield Life only needs to pay out a small amount. Now imagine if the final payable bill was $12,333, then we will expect Medishield Life to be paying out a much more significant portion. So the important thing to take away is not to expect your insurance plans to help much with small medical expenses, unless you are prepared to pay for the additional coverage of deductibles and co-insurance.
2. Upgrade to Integrated Shield Plans if you want coverage for smaller medical bills.
As shown in the above lesson, Medishield Life includes deductibles and co-insurance portions that must be borne by the insured. The only way to avoid paying for the deductibles and co-insurance portions is to upgrade to Integrated Shield Plans. So that is another consideration one should make whether upgrading to ISP is worthwhile.
3. Some non-standard medication is not covered under Medishield Life.
Worth noting is that not the full expense of all medication and drugs will be subsidised or covered under Medishield Life.