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Singaporeans can expect to live till the ripe old age of 83.5 years today. We also enjoy a high quality of healthcare in Singapore that enables us to live healthily. Part of the reason is our world-class healthcare infrastructure, highly-trained professionals and efficient service standards – which are recognised as among the best in the world.
Unsurprisingly, Singaporeans are also concerned with the affordability of medical and healthcare costs. A study by the Institute of Policy Studies (IPS) at the NUS found that Singaporeans were most worried about rising healthcare costs.
Over two-thirds of the respondents said that they were either “rather worried/very worried” or “somewhat worried” about healthcare costs rising in 2022.
Source: Institute of Policy Studies (IPS)
As Singaporeans, we can rely on three main national healthcare schemes to defray our healthcare expenses.
#1 CPF MediSave Account: Our National Medical Savings Scheme
Working adults will be very familiar with our MediSave Account (MA). Each month, we contribute a portion of our salaries to our CPF accounts – and one of which is our MA. The government also plays a role in growing our MediSave savings by paying a 4% floor interest rate on our balances.
MediSave savings are meant to help us pay for our healthcare needs, which include hospitalisation and surgery.
When we are hospitalised, we can tap on our MediSave for a Daily Hospital Limit to pay for daily ward charges, daily treatment fees, investigations and medicines. This excludes any applicable Surgical Limit that we can also draw.
We can use up to $550 per day for the first two days, and $400 per day from the third day onwards for our daily hospital charges.
We can also make Daily Hospital Limit claims for inpatient psychiatric episodes, and at approved community hospitals, convalescent hospitals and day hospitals.
For day surgeries, we can use up to $300 per day for hospital charges, excluding any applicable Surgical Limit.
There is also a Surgical Limit of $250 to $7,550, depending on the complexity of our operation. We can refer to the Table of Surgical Procedures (TOSP) for the full list of applicable surgeries and their respective MediSave Withdrawal Limits.
In addition, we can also use our MediSave for eligible vaccinations, health screenings and other types of outpatient treatments, long-term care and health insurance premiums for as MediShield Life, Integrated Shield Plans (IPs), CareShield Life and CareShield Life supplements (which we will delve into later).
Read Also: Complete Guide To Your CPF MediSave Account (MA) – And What You Can Use It For
#2 MediShield Life: Health Insurance From The Day We Are Born
MediShield Life provides universal and lifelong protection against large healthcare bills, regardless of any pre-existing medical conditions.
As our national health insurance plan, MediShield Life is designed to cover subsidised hospital bills at Class B2 and Class C wards in public hospitals. If we prefer to seek treatment in higher class wards in public hospitals, i.e. Class A and Class B1 wards, or in private hospitals, MediShield Life may not be sufficient.
For that, we can look to enhance our protection with an Integrated Shield Plan (IP) on top of our MediShield Life, provided by private insurance companies like Singlife.
While we can pay our MediShield Life premiums using our MediSave savings, we can only use up to our MediSave Additional Withdrawal Limit (AWL) to pay for the private IPs. We may need to top up the balance IP premium in cash.
| Age next birthday | Additional Withdrawal Limit for Private IP |
| 1-40 | $300 |
| 40-70 | $600 |
| 71 and above | $900 |
Source: CPF
We may be tempted to get the most comprehensive coverage available, but we also need to factor in our ability to service the rising premiums, especially in our later years. As we get older, the premiums on both MediShield Life and private IPs will naturally go up due to the higher risk factor.
Private insurers usually offer multiple IP plans that can fit various preferences and budgets for hospital coverage. For example, Singlife has three types of IP plans that provide coverage in 1) private hospitals, 2) Class A wards in public hospitals, or 3) Class B1 wards in public hospitals.
To keep private IP premiums affordable, there is also a co-insurance component. For Singlife Integrated Shield Plans, we only have to co-pay 10% of our bills, up to a cap of S$25,500 per policy year, even when actual hospital bills increase. Furthermore, we can also purchase additional riders to minimise out-of-pocket expenses and co-insurance coverage.
Private IPs also provide coverage for certain major outpatient treatments. For example, Singlife’s IP provides up to 5 times the MediShield Life claim limit for outpatient cancer drug treatments on the Cancer Drug List (CDL).
Read Also: Beginner’s Guide To Understanding How MediShield Life Works
#3 CareShield Life: Limited Pay Long-Term Care Insurance Starting At Age 30
A sobering statistic on the CPF website states that “by age 65, one in two healthy Singaporeans could become severely disabled in their lifetime and may need long term care”.
This is where CareShield Life, our national long-term care insurance scheme, provides a basic level of financial support should we become severely disabled. Similar to MediShield Life premiums, we can fully pay our CareShield Life premiums using our MediSave savings.
For those born in 1980 or after, we are automatically enrolled into CareShield Life once we turn 30. This is regardless of any pre-existing medical conditions and/or disabilities that we may have. For those born in 1979 or earlier, participation in CareShield Life is usually optional.
CareShield Life provides a basic monthly payout that may last a lifetime, as long as we can’t perform at least 3 out of the 6 Activities of Daily Living (ADLs).
Source: Ministry of Health (MOH)
CareShield Life payouts start at $637 per month in 2023 and increase over time, until we turn 67 or start receiving payouts. Thereafter, our payouts may last up to our lifetime but remain fixed.
Premiums are also meant to be paid up to the point we turn 67 or 10 years after you join the scheme, whichever is later, after which we stop paying premiums but continue to enjoy lifelong coverage.
Source: CareShield Life
To ensure CareShield Life premiums remain affordable, payouts are sized to provide a basic level of coverage for severe disabilities. Depending on our personal circumstances, we may require a higher level of care with rehabilitation or nursing care depending on our severe disability. We may also wish for more certainty in receiving higher payouts or when we are unable to perform just two ADLs instead of three.
We can boost our long-term care coverage with private CareShield Life supplements, such as the Singlife CareShield Standard and Singlife CareShield Plus plans. Similar to buying private Integrated Shield Plans, we can use our MediSave savings to pay for our CareShield Life supplement plan, up to a withdrawal limit of $600 per calendar year per person insured.
Currently, we can enjoy a 20% lifetime premium discount on Singlife CareShield Standard and Singlife CareShield Plus plans*. This makes it even more affordable to increase our coverage and reduce the barriers to start receiving payouts.
Read Also: Complete Guide To Understanding CareShield Life
How A CareShield Life Supplement Plan Can Protect Us
Using the Singlife CareShield Plus as an example (below), we can see that a 35-year-old male who wants $1,000 additional long-term care coverage on top of his basic CareShield Life payout will need to pay a yearly premium of under $550 (or $440 with the 20% lifetime premium discount)1. This means his entire CareShield Life supplement plan premium can be paid for using MediSave savings.
Source: Singlife
Moreover, at any point in time, if he develops a medical condition that renders him unable to perform just one ADL, he will continue to enjoy coverage without having to pay premiums on his CareShield Life supplement plan.
This provides additional assurance that he will be able to keep his CareShield Life supplement plan even if he has to reduce his workload and income. At the same time, he also knows that he will not have to financially burden his loved ones to pay for his long-term care coverage.
If his condition worsens and he becomes unable to perform two ADLs, he can start receiving his $1,000 monthly benefit. At the same time, he will also get a $3,000 Lump Sum Benefit (worth 3x his monthly benefit) that can be used to defray any additional costs related to his disability, such as potentially requiring a wheelchair.
His Singlife CareShield Life Plus supplement plan will also disburse $200 a month in Dependant Care Benefit for up to 36 months if he has a dependant under the age of 22 and $600 monthly in Caregiver Relief Benefit for up to 12 months.
If his condition further deteriorates to the point that he is unable to perform three ADLs, he will start receiving his CareShield Life payouts. This means he will receive $1,000 + his CareShield Life payout each month.
Alternatively, we can also opt for the Singlife CareShield Life Standard plan, providing options for both level or, like CareShield Life, escalating payouts. Similar to CareShield Life, this plan starts paying out a monthly benefit the moment we are unable to perform at least three ADLs. This means we will start receiving payouts for both his CareShield Life and Singlife CareShield Life Standard plans at the same time.
Similar to the plan described above, there is also a lump sum benefit worth 3x the monthly benefit that can be used to defray any additional costs related to our disability. We can also receive a Dependant Care Benefit for up to 36 months if we have a dependant under the age of 22, and a Caregiver Relief Benefit for up to 12 months.
On both plans, we can customise our ideal CareShield Life supplement plan. For example, we can opt for a limited premium payment term until the policy anniversary we turn 68 – which is similar to CareShield Life – or to continue paying premiums until the policy year we turn 98. Logically, if we choose a limited premium payment term, yearly premiums will start at a higher amount. If we also prefer the escalating plan, our yearly premiums will rise in tandem with our payouts each year. This may mean that we need to fork out an additional cash payment on top of the MediSave withdrawal limit.
We can do this by filling in our basic information on the Singlife CareShield Life supplements website. When we input our ideal monthly benefit, we can see a breakdown of our additional long-term care benefits and get a sense of the affordability of our desired coverage.
We can opt for a wide range of monthly benefit from $200 to up to $5,000. This can give us greater peace of mind – knowing we and our loved ones have adequate financial support in the event of our severe disability. What’s better is that we can enjoy a 20% lifetime premium discount – enabling us to get more coverage for the same premiums that we pay.
Footnote:
1. Premium amount stated are rounded off to the nearest ten dollars.
*Terms and conditions apply. This policy is underwritten by Singapore Life Ltd. Dollar and Sense is not an insurance agent/intermediary and cannot solicit any insurance business, give advice, recommend any product or arrange any insurance contract. Please direct all enquiries to Singapore Life Ltd. This material is published for general information only and does not have regard to the specific investment objectives, financial situation and particular needs of any specific person. You should read the Product Summary and seek advice from a financial adviser representative before making a commitment to purchase the product. As buying a life insurance policy is a long-term commitment, an early termination of the policy usually involves high costs and the surrender value, if any, that is payable to you may be zero or less than the total premium paid. Buying a health insurance policy that is not suitable for you may impact your ability to finance your future healthcare needs. This advertisement has not been reviewed by the Monetary Authority of Singapore. Protected up to specified limits by SDIC. Information is accurate as at 25 May 2023.
The post MediSave; MediShield Life; CareShield Life: Understanding How Singapore’s National Healthcare Schemes Protect You And Your Family appeared first on DollarsAndSense.sg.
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