Guide to Best Health Insurance in Singapore

One phrase you need to know is healthcare inflation. Inflation basically drives up prices of goods and services by around 3% each year. Healthcare inflation, on the other hand, runs up to 2 or 3 times that general inflation rate. Why? That’s because advances in medicine, medical research, and medical technology are costly. In fact, these are the 3 main factors driving healthcare costs in Singapore today.

If you fall ill, get hospitalised for 3 weeks on no-pay leave, and receive a S$40,000 medical bill upon check-out, your health insurance plan should be able to absorb a huge chunk of those healthcare costs for you. You may end up paying 5%, and another S$1,500 or so in deductibles (you will learn about this later) – but the rest will be "paid" by your insurance company. This way, you don't have to empty your bank account and borrow from your family, friends, and loan sharks to pay your hospital and medical expenses.

If you are a sole breadwinner who got diagnosed with a terminal or critical illness (touch wood!), are forced to stop working, and unfortunately pass on, you'll be leaving your spouse, parents, or children behind with no source of income – and hefty medical expenses to foot. Your life insurance plans will give them lump-sum payout cheques to help them continue with their lives for a short period (while they find new sources of income) – basically protecting their financial stability for a year or two.

Hospital income insurance offers you a fixed amount of cash daily (e.g. S$250) from the insurer for each day you’re hospitalised, up to a maximum number of days (e.g. 365 days) per accident or illness.

Long-term care insurance offers you a fixed amount of cash monthly (e.g. S$400) for long-term nursing care that typically includes assistance with daily activities such as bathing, dressing, and feeding. This coverage is often offered by insurers in the form of ElderShield supplements.

Disability income insurance offers you “income replacement” of up to a certain percentage of your gross monthly income. So, if you’re making S$5,000 a month, your insurer might allow you to insure 80% (varies by insurer) of your income – meaning in the event of an accident that leaves you disabled, your monthly payout would be S$4,000 until you’re able to perform your duties once again.

Hospitalisation insurance offers you reimbursement from the insurer for any medical expenses, treatment bills, and hospitalisation costs. Depending on the policy, the coverage you receive may either be full or limited.

Critical illness insurance offers you a lump sum payment from the insurer to help alleviate hefty medical expenses in the event you are diagnosed with a critical illness such as cancer, heart attack, kidney failure, coma, etc. The list of qualifying critical illnesses varies by insurer.

Similar to critical illness insurance plans, a terminal illness insurance plan gives you a lump-sum payout if your doctor diagnoses you with a terminal illness – meaning you are down with an end-stage illness and have been given a limited amount of time to live.

An Integrated Shield Plan (IP plan) basically serves to increase your annual claim limit for your MediShield Life plan – therefore increasing your healthcare coverage. MediShield Life's annual claim limit is only S$100,000 but an Integrated Shield Plan's annual claim limit may run up to S$1,000,000 instead. With the increase in claim limit, you will also be covered for a wider range of healthcare conditions, more ward classes, pre- and post-hospitalisation expenses, and medical coverage outside of Singapore.

The basic MediShield Life provides Singaporeans and Permanent Residents (PRs) with coverage for Class B2 and C wards in public hospitals. While you can still opt to stay in Class A or B1 wards, it requires you to top-up the excess cost. This is one of the reasons why individuals may opt for an Integrated Shield Plan (IP) – so that they can have insurance coverage for higher-tier wards in public and private hospitals. A higher-tier ward or access to private hospitals may reduce your waiting time for access to medical treatments and hospitalisation.

Another plus point that people like about getting an Integrated Shield Plan is the access to an insurance agent. Your agent is your point of contact for anything health insurance-related. Hence, when you need to make a claim or check your coverage, you can simply drop your agent a text or call instead of browsing through multiple hospital and government websites.

MediShield Life, for instance, is a mandatory health insurance offered by Singapore's Ministry of Health (MOH), with coverage for all Singaporeans and Permanent Residents (PRs) – but it has its limitations such as a S$100,000 claim limit per year, access to only class B2 and C wards in public hospitals, no coverage for maternity-related conditions, hospice, and moreAn Integrated Shield Plan (IP plan) basically serves to increase your annual claim limit for your MediShield Life plan – therefore increasing your healthcare coverage. MediShield Life's annual claim limit is only S$100,000 but an Integrated Shield Plan's annual claim limit may run up to S$1,000,000 instead. With the increase in claim limit, you will also be covered for a wider range of healthcare conditions, more ward classes, pre- and post-hospitalisation expenses, and medical coverage outside of Singapore.

Your employer’s policy may also have a variety of limitations such as deductibles, sub-limits, or co-insurance, and the probability of you leaving the job or facing retrenchment. Having your personal health insurance or Integrated Shield Plan (IP) will give you a plan to fall back on.An Integrated Shield Plan (IP plan) basically serves to increase your annual claim limit for your MediShield Life plan – therefore increasing your healthcare coverage. MediShield Life's annual claim limit is only S$100,000 but an Integrated Shield Plan's annual claim limit may run up to S$1,000,000 instead. With the increase in claim limit, you will also be covered for a wider range of healthcare conditions, more ward classes, pre- and post-hospitalisation expenses, and medical coverage outside of Singapore.

This is like the excess in car insurance — you need to pay this the first time you get hospitalised in a policy year before the insurer will pay the rest. It’s either $2,000 (B2 ward), $2,500 (B1 ward) or $3,500 (A ward/private).

You also have to co-pay 10% of the hospital bill regardless of the deductible.

All IPs offer “riders” (add-ons) that reduce those costs down to just 5% co-insurance. IP riders are add-ons to your Integrated Shield Plan that give you more coverage/benefits.

What are deductibles? Let's say if you have a Great Eastern Supreme Health Integrated Shield Plan, and you see that there's a table called "Deductible" saying that you need to pay S$2,500 for a class B1 ward in public hospitals per policy year, what does that mean? That means, if you have been admitted to a class B1 ward in a public hospital this year, you will need to first pay the stated deductible amount – S$2,500 in this case – before your insurance company will pay the rest of the bill for you. If your hospital bill were lesser than the deductible amount, you cannot even file this bill for claims. Deductibles serve to define what is a minor healthcare expense from a major hospital bill that you might truly need the insurance company's help with.

What is co-insurance? Although used interchangeably with co-pay at times, co-insurance is not the same as co-payment (aka co-pay). The purpose of co-insurance is to have you share the cost of your hospital bill with your insurance company. In Singapore, when you get a hospital bill, you have to first pay the deductible (a few thousand dollars). Then, you pay co-insurance – which, in Singapore, is usually 20%, 15%, or 10% of the total bill (minus the deductibles you have already paid). Most insurance companies offer co-insurance riders that you can purchase to lower your co-insurance to the legal minimum of 5%.

Co-Payment, otherwise known as copay, is not the same as co-insurance. Co-payment refers to fixed or flat rates that you have to pay for a doctor's consultation, dental visit etc. AXA Shield, for example, offers co-pay rates at S$10 per General Practitioners (GP) consultation, S$130 for physiotherapy sessions, S$100 for specialist consultations, and S$15 for dental – although all doctors and clinics must be an AXA-approved panel doctor, clinic or hospital.

Your money deposited to your CPF MediSave account has multiple uses – to pay the premiums of you (and your dependents') MediShield Life, any small amounts incurred in minor hospital bills, and premiums of your Integrated Shield Plans. For Singaporeans and permanent residents under age 40, you can only withdraw an additional S$300 per year; S$600 if you are between ages 41 to 71; S$900 if you are age 71 and above. You cannot use your MediSave to pay for your Integrated Shield Plans' riders (IP riders) premiums.

Pro-ration only comes into play when you seek medical treatment at a hospital or ward that is of a higher class than what is covered within your Shield Plan. Let's say you are a permanent resident (PR) hold a Shield plan for class B1 wards in public hospitals, but in an emergency, you were sent to a private hospital for a day surgery. In that case, you will have a 50% pro-ration factor – which means that you will have to pay deductibles for a private hospital ward, and 50% (pro-rated) of the hospital bill. Yup, so consider your Shield plan carefully – ask yourself, which hospitals nearest to you and your workplace? Are they private or public hospitals?

Your medical costs – or used interchangeably with healthcare costs, hospital bills, medical expenses – refers to the money you spend on your hospitalisation ward charges, doctors and nurses' fees, all the disposable items you may use, your medicine, surgery fees and equipments involved, any extra long-term consultation and treatment fees, tests, scans – basically every little thing you do an every person you speak to in a hospital or clinic comes at a cost. Just look at a 2 or 3-page real-life hospitalisation bill and you will understand.

What are claim limits in health insurance? Otherwise commonly known as hospitalisation claims limit, or insurance coverage limit, a claims limit is basically the maximum amount of money for a certain medical treatment that your insurance company will pay for you. Let's say you have a Prudential PruShield Standard Plan for Class B1 wards in public hospitals, your daily hospital room claim limit is S$1,700. That means, your insurance company will only pay S$1,700 per day for your hospital room charges in a class B1 ward in public hospitals. Do not confuse your benefits' claim limits with the attractive-looking maximum annual coverage limit which is often presented to you in S$1 or $2.5 million – basically a total sum of all the individual benefits' claim limits.

When a health insurance conversation comes up, insurance agents often like to quote high inflation rates and rising healthcare costs in Singapore. Inflation refers to the rise of the price of a product or service. So, when used in a medical or healthcare context, medical inflation refers to the rising prices of medical treatments. So, are healthcare costs really rising in Singapore? Yes, due to an ageing population with more medical problems, newer high-tech and expensive medical treatments, and the rising salaries of medical workers.

Take a look at all the different insurance companies' websites and you will notice some of them like Prudential PruShield and AIA HealthShield Gold Max offer a "concierge service". What does concierge service mean? For some insurance companies such as Prudential, they have actual staff in hospitals such as Mount Alvernia (level 1), and Raffles Hospital (level 8) to help you with submitting claims, taxi vouchers, parking coupons, and any other questions related to your plan.

Insurance companies often have their own list of approved clinics and hospitals that they have an ongoing partnership with. Many times, you have to seek medical treatment at an approved panel clinic or hospital to be able to make a full claim from your Integrated Shield Plan (IP plan). If you were to visit a non-panel clinic, chances are your claims may be capped or limited to a certain percentage of the bill, or you may not be allowed to claim at all. So, don't wait until you're ill before you start looking at the panel clinics and hospitals that are approved by your health insurance plan – in fact, you should start looking at these things even before you buy your health insurance policy. Let's just say it doesn't make sense to buy a plan that doesn't allow you to go to Mount Alvernia Hospital when you live 5 minutes away from it, right?

Pre-existing conditions basically refer to medical or health issues, problems, and diagnosis that you may have had before you purchase your new health insurance. Why are insurance companies always talking about pre-existing conditions? That's because if you have an ongoing history of serious asthma, for example, you are more likely to be hospitalised in the event your asthma flares up – which also means more money that the insurance company has to spend on your claims. For this reason, insurance companies may choose not to cover you for any of your pre-existing conditions (then get insurance for what, right?) or increase your premiums to cover your pre-existing conditions as well.