11 Health Insurance Terms In Singapore that You Should Know About
Health insurance is something that we all will be grateful for when or if we end up at the hospital from an injury or illness. It is pretty much a form of protection from hospitalisation and medical costs, as well as medical bills arising from injuries, illnesses, or disabilities.
At times, accidents or illnesses happen unexpectedly and it can get really expensive in the aftermath which may wipe out your savings and retirement funds. This is when health insurance comes in to help you cope with the ever-increasing healthcare costs.
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The deductible is basically the amount of money you’ll need to fork out before you can make your first health insurance claim each year, and this amount depends on the type of ward you stayed in.
Let's use an example to illustrate – you happen to 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 was any 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.
Co-insurance is used interchangeably with co-pay at times. However, 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.
#4 Withdrawal Limits
Your money deposited to your CPF MediSave account has multiple uses – to pay the premiums of your (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.
#5 Pro- Ration Factors
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) holding 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 are nearest to you and your workplace? Are they private or public hospitals?
#6 Medical Costs
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.
#7 Claim Limits
A claim limit in your health insurance is commonly known as the hospitalisation claims limit, or insurance coverage limit, and 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 $1,700.
That means, your insurance company will only pay $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.
#8 Inflation Rate
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.
#9 Concierge Service
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.
#10 Panel Clinic
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?
#11 Pre-Existing Condition
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 or increase your premiums to cover your pre-existing conditions as well.
Health Insurance Beginner Guides
Here are some basic guides on health insurance for you to bookmark:
Frequently Asked Questions
Is co-insurance different from co-payment?
- Yes, co-insurance is different from co-payment (aka co-pay). Co-insurance is the amount you pay to share the cost of your hospital bill with your insurance company, while co-payment refers to fixed or flat rates that you have to pay for a doctor's consultation, dental visit and other related services.
Can I use my MediSave to pay for my IP rider?
- No, you will not be allowed to use your Medisave to pay for your Integrated Shield Plans' riders (IP riders) premiums.
Should I go to a panel clinic or non-panel clinic?
- It depends on whether you mind paying more for your medical bills at the non-panel clinic. Usually, you’re encouraged to seek medical treatment at an approved panel clinic or hospital approved by your insurance company 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.
Are both Singaporeans and foreigners eligible for Integrated Shield Plans?
- Yes. Integrated shield plans administered by the Central Provident Fund (CPF) Board (under the Singapore government’s Ministry of Manpower) from local insurance providers can also be purchased by expats, even though they are meant to be used together with MediShield Life, the basic national health insurance plan for Singaporeans.
Do I need to get health insurance in Singapore?
- Yes. MediShield Life is a mandatory governmental health insurance plan that all Singaporeans and Permanent Residents will be automatically enrolled in and need to maintain. You have the option to enhance your MediShield Life healthcare coverage by buying an Integrated Shield Plan from private insurers in Singapore.
Will I be able to use my MediSave to pay for my IP plan?
- Yes, you can use MediSave to pay for MediShield Life and Integrated Shield plan (IP). However, premiums of IP riders have to be paid in cash.