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The Good, the Bad, and the Ugly : CPF Medishield Life dissected

Posted 9 November, 2015 by Clearly
in Technical Smechnical
Medishieldlife_happy

Medishield Life: More than just a slogan printed on an umbrella. That’s not me in the front row, btw.

Gather round, all ye lost and confused: Today we are going to examine the much vaunted Medishield Life to see what the hype is exactly about. Furthermore, we will also explain some important terms and features of Medishield Life – you never know when the information will come in handy.

Before we see whats the good, bad, and ugly side of Medishield Life, I shall assume that our gentle reader is blissfully unaware of how Shield plans work in general. Here are the 4 more important terms to have in your arsenal:

Deductible

The portion of your medical bill that you have to pay first, this is not claimable (unless you have a comprehensive Integrated Shield Plan from a private insurer, another story for another day). Similar to an excess (for car insurance). The deductive is usually a fixed amount of money ($1500 – $3000), but only needs to be paid once every year. Subsequent medical bills have no deductible to be paid. We’ll take a look at a case study later.

Co-insurance

The second portion of your medical bill that you have to pay, before the shield plan kicks in and handles the remainder of the bill. This is usually a percentage of the medical bill, ranging from 3% to 10% under Medishield Life.

Yearly Claim Limit

The maximum amount of money that the Shield plan will pay for your medical bills for that year. Any remaining medical bills has to be paid for out of your own pocket. Medishield Life’s Yearly Claim Limit is $100,000.

Lifetime Claim Limit

The maximum amount of money that the Shield plan will pay out throughout your whole life. Happily for us, there is no limit to this under Medishield Life. (It was capped at $300,000 in the past under Medishield)

We are now ready to proceed with the quest for Medishield Life knowledge.

The Good

The Good

Ice Cream?! Really?!

More Protection, More Benefits : Improved medical coverage

Medishield Life pays out more subsidies compared to its predecessor. Most Inpatient treatment claim limits have been increased, and co-insurance has been reduced as well. More details here.

No Man (woman, or child) left behind : Coverage for everyone

A significant upgrade of Medishield Life is that every Singaporean Citizen and Permanent Resident are all enrolled under the shield plan. Regardless of age, financial ability, or health condition – literally everyone is covered. Not that you have a choice.

Lelong Lelong: Premium Subsidies galore

With increased benefits come increased costs, but the government is generously subsidizing much of the increase. Here is a look at the subsidies available:

  1. Subsidies for Lower to Middle Income Households

For households whose average monthly income is between $0 – $2,600, the government will subside the Total premium by 15 – 50%. Permanently. Cheers to that, I say.

2. Subsidies for Pioneer Generation

Folks born on or before Dec 31, 1949 (aka Pioneers) will receive premium subsidies from 40 – 60 % of the Total premium. Permanently. I was born too late.

3. Transitional Subsidies

For everyone else, not to fear. The government will subsidize a portion of the premium increase for the first four years of implementation. It subsidies 90% of the increase for the first year, and reduces to a 20% subsidy of the increase for the 4th year. 70% and 40% are the subsidies for the second and third year respectively. Not too bad lah.

No Money? No Problem : Assistance for families that cannot afford the premiums

For families that are unable to afford the premiums even after the subsidies and exhausting their medisave, there is additional assistance available. This means that unlike before, no one should be left without medical insurance cover for financial reasons.

Sit back, and relax : Everyone is automatically covered

One of the most convenient things about Medishield Life – everyone eligible (breathing Singapore Citizens and PR) is automatically enrolled and registered for this plan. You literally need not lift a finger.

The sky’s not even the limit : Unlimited Lifetime cover

A HUGE improvement we see in Medishield Life is the removal of Lifetime claim limits. This means additional peace of mind for those folks with recurring hefty medical bills.

Let me love you all the same : Even those with Pre-existing medical conditions are covered

Once upon a time, if you were diagnosed with high cholesterol or high blood pressure, your chances of getting medical insurance coverage was close to zero. With Medishield Life, it covers literally everybody – no questions asked. An important caveat, though – this means an extra 30% of premiums charged for those with existing conditions, for a period of 10 years. A fair trade, we say.

The Bad

The Bad

Waddya mean, no ice cream?

Up, up and away : Hefty Premium Increase

There is no free lunch in this world and our fine policy makers never let us forget that. Medishield Life Premiums are increased across every single age group, with no exceptions. If you belong to the economically productive age group of 31 – 40, your premiums just went up by 295% (from $105 initially, to $310).

To confirm that this isn’t a bad dream, click here for the details.

Same same, and no different : Deductible amount remains the same

The deductible amount under Medishield Life has received no special treatment. So if you are below 80 years of age, and want to stay in a class B2 ward, be prepared to pay the first $2000 out of pocket first before the shield plan steps in. This is exactly unchanged from the days of Medishield.

Extra may not be enough : Yearly Claims Limit still exists

Previously, the yearly claims limit was $70,000 and has since been revised to $100,000 under Medishield Life. While they claim that 90% of all hospital bills are under $100,000, it should be little comfort to those who incur huge bills (we know of cancer patients who have incurred more than $300,000 in total bills in the quest for recovery).

The Ugly

The Ugly

I wanna see my lawyer. Or my mummy

Ask, and you only then you shall receive : Claims Procedure

One absolutely absurd point about Medishield Life: to make a claim, you to need to TELL the medical staff in the hospital that you would like to make a claim so that they can assist you.

This is pure and utter rubbish. For a plan that covers everyone in Singapore, it should be automatically computed and claimed, with no action on our part. This is 2015, for crying out loud.

If I already am paying for a shield plan, would it make sense for me to decide if I want to still claim under the plan? An opt in action doesn’t make sense, an opt out action is more sensible.

Jail Time, anyone?

One of the nicest things about Medishield Life is that everyone is enrolled. One of the nastiest things about Medishield Life is that no one can say no. Not only that, premiums must still be paid.

It makes sense for the bulk of the population, but for Singaporeans that reside overseas, it makes absolutely no sense – they are paying for a plan that they will never (or unlikely) get to use because they basically live outside Singapore.

People under this category have to continue to make premium payments, or risk being labelled as a defaulter under the Medishield Life Scheme Act (we have a law for everything). Defaulters can be arrested without warrant, and could face a fine of up to $5000 or 12 months jail. Read about their plight here.

And you thought your insurance agent was nasty.

The Conclusion

All in all, we think Medishield Life is the correct step forward. Health care costs have steadily risen over the years and shows no sign of abating, so it only makes sense for us as a nation to address this problem on a national level.

Premium increases aside, we stand to gain, overall, when we look at the grand scheme of things. People who couldn’t afford cover are no longer excluded, as are people with pre-existing illnesses. Since we don’t really have a say in the matter, I say to my readers – lets embrace it with an open mind, and make the best use out of it.

Do you agree or disagree with the points made in this post? Let us know in the comments below!

www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.

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