Sweeping changes are in train that will give the MediShield insurance scheme a complete new look from next year.
The low-cost plan, which was introduced in 1990 to help Central Provident Fund (CPF) members meet medical expenses, will be expanded to cover more people, more types of illnesses and for a longer time span.
The maximum age coverage, for example, has been extended from 85 to 90, and mental illnesses will be covered.
But broader coverage means premiums will have to rise to meet the increased claim amounts and number of claims.
More than 90 per cent of Singaporeans have MediShield as their basic form of health insurance.
Insurance specialist Anna Chen at Providend believes the changes are especially good news to those who have difficulty upgrading to a higher plan due to health reasons or because they had almost reached the benefit limits.
The MediShield changes will give them an added layer of safety.
To help with higher premiums and deductibles, the Government will give all insured Singaporeans a one-off Medisave top-up of $50 to $400. Also, 85 per cent of Singaporeans 66 years and older will get an annual Medisave top-up of $250 to $450 under the GST Voucher scheme. With the top-ups, people aged 60 years and older, and those 20 years and younger, will pay lower premiums for the next two years.
Mr Tomas Urbanec, chief marketing and partnerships distribution officer of Prudential Singapore, noted that the changes 'shouldn't impact the way you look at your policies. More importantly, your health insurance policies should meet your needs'.
Mr Ong Lean Wan, director and chief executive at research-driven and fee-based financial consultancy Life Planning Associates, added that it might be timely to review your health insurance coverage - something that should be done regularly.
He said that health insurance premiums tend to increase more frequently than other types of insurance because they are normally age-related. With the changes to MediShield, policyholders should review their coverage.
'The most important thing that you should consider is, 'Can I afford it?'' he said.
These are key issues you will need to understand about your health insurance:
Who is covered under MediShield?
Singaporeans and permanent residents are automatically insured under MediShield when they start contributing to CPF unless they choose to opt out.
The age limit for entering the scheme is 75. Coverage is currently provided till 85 but the maximum age goes up to 90 from next January.
What coverage does it provide?
MediShield only covers hospitalisation expenses and certain approved outpatient treatments.
You can choose to stay in any ward class. However, for MediShield members who go to private hospitals or Class A or B1 wards, the payouts will be pro-rated to the equivalent Class B2 or C levels.
The member must have stayed in the hospital for at least eight hours to qualify for claims for hospitalisation expenses, unless he has been admitted for day surgery.
Health-screening procedures are not claimable but treatments that are required in relation to the health-screening procedure can be covered under MediShield.
The lifetime claim limit will be upped from $200,000 to $300,000.
How much are the premiums?
The yearly premiums increase with age. Currently, they range from $33 for those aged 30 and below, to $1,123 for those between 80 and 85.
With the changes in MediShield, the annual premium increase will be between $17 and $251. You can use funds from your Medisave account to pay the premiums.
If you do not have sufficient funds in your Medisave account, your policy may lapse.
The CPF Board will issue notification letters, and you are given a two-month grace period to top up your Medisave to enjoy uninterrupted coverage.
In the event of a lapse, you may be able to be get covered again, provided your health status has not changed and you start making regular Medisave contributions.
How do I make a claim?
You must tell the hospital that you intend to claim from their MediShield plan so a claim can then be submitted on your behalf.
Will MediShield pay for everything?
No. MediShield has deductible and co-insurance features. Deductibles are the first layer of charges that the policyholder has to bear. These start from $1,500.
The co-insurance payment is the portion shared by the policyholder, usually 10 per cent of the bill after taking into account the deductible.
You can use your own or your immediate family members' Medisave savings to pay for the deductible and co-insurance.
With the changes, deductibles will increase by $500, which means you will have to bear a higher portion of an eligible bill before making a claim, which is something people suffering from chronic illnesses should note, said a Great Eastern spokesman.
Mr Pui Phusangmook, senior vice-president and general manager, group and health division, at NTUC Income, added that the deductible and co-insurance features in MediShield promote individual responsibility for health care.
'Those who can afford higher coverage should insure themselves under private integrated shield plans such as NTUC Income's IncomeShield,' he said.
'We reiterate the importance of maintaining one's MediShield policy and where possible, securing an integrated shield plan. To avoid not being covered for pre-existing conditions, we also remind our customers to insure themselves early and when they are healthy.'
What are integrated shield plans?
You can top up your coverage through private Medisave-approved shield insurance plans which covers Class A and private hospitals, offered by AIA Singapore, Aviva, Great Eastern, NTUC Income and Prudential.
What coverage is provided?
Like MediShield, these plans also have deductible and co-insurance features. However, integrated shield plans are not bounded by sub-limits and this ensures that the customer is not caught out by year-to-year medical inflation.
Compared with MediShield, integrated shield plans have higher annual claim limits, and have no lifetime limits. They also offer lifetime coverage, instead of up to 90, which may provide more peace of mind.
How much are the premiums?
Depending on the coverage for wards, annual premiums for integrated shield plans can reach $700 for someone in his 50s, and $7,000 when you reach 80.
The premiums can be defrayed by your Medisave account, capped at $800 a year. However, this still means quite hefty out-of-pocket expenses after retirement to continue paying the premiums.
The Great Eastern spokesman urged members to relook the adequacy of savings in their Medisave accounts to continue paying for the MediShield and integrated shield premiums until 90.
Otherwise, it will be prudent to earmark a sum of money for health insurance premiums in older age.
Do I need a rider?
If you want to be covered for all expenses, including the deductible and/or the co-insurance portions of the hospitalisation bill, shield insurers offer optional riders which have to be paid with cash, instead of Medisave.
The premiums are usually about 30 per cent of the annual integrated shield premium, depending on the type of coverage you choose.
Mr Ong of Life Planning Associates added: 'It is all about what your priorities, health condition and expectations are. If you can afford to pay for the premiums, then by all means go for the best plans available that suit your needs.
'But if you think that the money can be put aside for other uses, and you may not require the co-insurance part to be covered, or you don't mind staying in a B2 ward, for example, then not having riders, or choosing a cheaper integrated shield plan, may ease cash flow, especially at older ages.'