Medishield Life vs Integrated Shield Plans – Which Should You Choose?

October 7, 2014

in Making Money

By Calvin Yeo (guest contributor)

Medishield Life is an upgraded scheme of Medishield which aims to provide medical coverage for all Singaporeans. It’s definitely an improvement over the old scheme, but understanding the scheme in full is important.

What is Medishield and Medishield Life?

Medishield is the most basic form of medical insurance you can get which covers Class B2 and C hospitalization bills. Medishield Life is a new scheme which aims to improve the current Medishield with some of the improvements listed below.

1. All Pre-Existing Conditions Will Be Covered

This was a huge problem before the Medishield Life as many people especially the elderly do not qualify for the Integrated Shield Plans as they had pre-existing conditions such as high blood pressure and diabetes, both pretty common diseases. It is not really their fault that they did not purchase the insurance – those policies were not available during their younger days. With Medishield Life everybody will be covered, including those with pre-existing conditions. However, they will have to pay an additional 30% of premiums for a period of 10 years.

2. Deductible Remains the Same

The deductible basically refers to the amount the patient has to pay annually before the insurance kicks in. The deductible ranges between $1,500 to $3,000 depending on the ward class and age.

3. Co-Insurance changes from 10-20% to 3-10%

Co-Insurance basically refers to percentage of the amount the patient has to co-pay after the deductible. By bringing the co-insurance down from 10-20% to 3-10% makes a significant difference in the out of pocket costs for the patient. Co-Insurance can become pretty expensive if the hospital bill is large.

4. Annual Claim Limit Increases from $70,000 to $100,000

Annual claim limit basically means the maximum amount that can be claimed per year. An increase from $70k to $100k should help people with larger hospitalization bills.

5. Lifetime Claim Limit No Longer Applies

This is one of the most important ones. The basic Medishield plan has a lifetime claim limit of $300,000. By removing the lifetime limit, you won’t find yourself having no medical coverage if you suffered from a large hospitalization bill earlier.

So With All These Improvements in Medishield Life, Should I Still Keep My Integrated Shield Plan?

141007 Figure 1

This Pictogram Compares Medishield Life to Aviva Myshield Plan 1 by DrWealth.com

The most important difference is that Medishield Life only covers subsidized wards which are Class B2 and Class C. If you intend to go to private hospitals or private wards Class A and Class B1, you will need an Integrated Shield Plan. There is a significant difference as there is often a shortage of wards in Class B2/C and waiting times can be longer.

Another key difference is that you will be able to cover your deductibles and co-insurance with riders for the Integrated Shield Plan while you have to foot both the deductibles and co-insurance for Medishield Life. In my opinion, it is definitely worth the premium to at least get the rider to cover co-insurance.

Other differences include the surgical limits and daily limits. While the daily limits is less likely to be of a concern, certain surgical procedures may be complicated and expensive, exceeding the $2,000 limit for Medishield Life. In this case, the integrated shield plan will be useful as it is on as charged basis.

 

Calvin Yeo, CFA, CFP is the Managing Director of Doctor Wealth Pte Ltd (www.drwealth.com), which is revolutionizing the financial advisory industry by building an online platform to provide high quality and comprehensive financial advice for free.

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