Friday, June 13, 2014

Medishield Life vs Private Integrated Shield Plans - to cancel or not to cancel?

By now, if you are a Singaporean (or living in Singapore), you would have read and heard about Medishield Life - the government's initiative of guaranteed medical and hospitalisation insurance coverage (regardless of medical/health conditions), lifetime coverage, and improved benefits. (more information available at

As you may know, the media is going on overdrive with headlines suggesting that people will be/should be cancelling their private integrated shield plans from AIA, Aviva, Great Eastern Life, NTUC Income Insurance, or Prudential.

The discussion is probably premature as premiums of Medishield Life are not even revealed yet.

Other analysts and websites are giving their take on the issue, but there still seems to be some confusion. So as usual, we hope to make it easier to understand an issue on insurance matters. We will be avoiding the technicalities of comparison between Medishield Life and Private Integrated Shield Plans, in the hope that you can have a broader and better understanding of the issue without being bogged down by the nitty-gritty details which can be understandably confusing and frustrating. 

Here is just 5 questions that you will have to ask yourself to guide you in your decision making when the time comes (Please discuss with a qualified financial adviser):

1. If the need arises, do you prefer to have the option of choosing private hospitals? 

If your answer is "yes" and your private shield plan can provide coverage up to private hospital - stick with your shield plan. 

Because Medishield Life is still designed with B2/C ward in mind - which will mean more out-of-pocket expenses should you choose or be forced to go to private hospitals instead with only Medishield Life coverage.

2. Has your health condition deteriorated since you bought your private integrated shield plan?

If your answer is "yes", you may wish to stick with your shield plan.

Say you were in the pink of health when you bought your shield plan, and now your medical condition has deteriorated. Think very carefully if you want to give it up (especially if you answered "yes" to question 1).

You will have no problems getting coverage with Medishield Life (it is universal coverage regardless of health/medical conditions), albeit with higher premiums (details yet to be confirmed). But for whatever reason, if you wish to reapply for a private integrated shield plan, you will have to undergo medical underwriting again (that's for sure). 

Eg. Mr X bought a private integrated shield plan when he was young with no medical conditions. Over the years, he developed high blood pressure. After reading or hearing from friends about people cancelling their shield plans with Medishield Life coming on board, he decided to follow suit.

But subsequently he realised that he still prefers to have the option of private hospitals. He now wishes to go back on his private integrated shield plan. 

He will have to reapply, be subject to medical underwriting, which may result in exclusions (meaning the plans won't cover certain conditions etc) due to his high blood pressure.

You have been warned!

3. Do you prefer to have your deductibles and co-insurance covered as well?

If your answer is "yes" and you have bought riders to cover deductibles and co-insurance for your private shield plans, stick with it.

Deductibles basically means the first $X a person has to pay before insurance even kicks in. (Similar to excess of car insurance.)
Co-insurance basically means the % of a bill that a person has to co-pay with the insurer.
(For Medishield Life, deductibles can be up to $3,000 and co-insurance up to 10%.)

4. Eyes on tables or eyes on recovery?

If your private shield plan is an "as-charged" one and you do not want to worry about the limits on what is covered, stick to your shield plan.

You will notice that "as-charged" integrated shield plans for each item covered very simply lists "as-charged", while for Medishield Life, you will see a table full of numbers - $X, or $Y per session/month etc.

So if you do not want to worry about the limits at all, stick to your shield plan. 

5. Can you afford to pay the premiums of private integrated shield plans?

Benefits of course come with a cost. Private integrated shield plan is definitely more costly. Whether it is worth it or not is one big discussion, and also depends on your age group etc. 

So if your answer is "no", and you can't afford the premiums of your private shield plan right now. It is not much of a choice, is it?

Medishield Life will be a great blessing then as it has been promised that no one will be left behind. There will be grants and subsidies and assistance for those who have problems affording the premiums of Medishield Life.

As always, have a detailed discussion with a qualified financial adviser.

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