3 Things You Must Know About Integrated Shield Plans

With rising healthcare costs and the new co-payment shield riders, will you still be able to afford your medical bills?

iFAST Insurance Team Mar 16, 2018 13745

With Singapore's medical inflation rate exceeding global standards, falling sick in Singapore is no doubt an expensive affair.1 To ensure that you would be able to afford future hospitalisation and/or treatment costs, it is therefore important for you to have health insurance. However, with new co-payment riders soon to replace existing full Integrated Shield Plan (IP) riders, you may have to fork out more for your future medical bills. As such, will your existing coverage still be sufficient in the event of an illness?

(See "The 3 Best Policies For Every Life Stage")

#1 The mechanics of Shield plans

A national health insurance scheme, Medishield Life provides basic health coverage for all Singaporeans and Permanent Residents (PRs). While Medishield Life does not restrict your ward choice, coverage levels are based on the treatment costs for Class B2 or C wards at public hospitals. Hence, should the insured choose to receive treatment in a Class B2 or C ward at a public hospital, he/she can expect Medishield Life to cover the majority of his bills. Co-payment would then only be required for the deductible and co-insurance components.

However, should you wish to receive treatment in private hospitals and/or Class A wards in public hospitals, consider upgrading to an IP. Integrated shield riders that cover the cost of co-insurance and deductibles can also be purchased should you wish to receive additional coverage for your medical bills.

(See "The Secret Behind Avoiding Expensive Medical Bills")

#2 The new Integrated Shield Plan riders

With the new IP riders to be introduced by April 2019, here are a few key points to note.

Firstly, the new riders are set to impose a minimum 5 per cent co-payment. This means that as compared to the current riders where the insured do not pay a single cent for the treatment received, he/she would not be able to do so in future. This is likely to affect the 71 per cent of Singaporeans who do not have full riders.2

Secondly, Singaporeans can still continue to purchase the existing rider plans from now till 1 April 2019. However, this would only be temporary with the insured required to switch over to the new riders by 1 April 2021. Additionally, the new riders are expected to have lower premiums which may make premiums more affordable.

Lastly, those with the full IP riders would remain unaffected for now. However, this does not put co-paying out of the picture as future changes may be made.

(See "Want An Early Retirement? Find Out How Much It Costs")

#3 How this affects you

While consumers are expected to only feel the difference starting from April next year, planning now could help you to better prepare for the impending change. This is because you would no longer be able to receive full coverage for your hospitalisation costs with the implementation of co-payments. As such, would your coverage still be sufficient in the event of an illness or medical need?

For starters, consider enhancing your coverage with a critical illness policy. Providing a lump sum pay-out in the event of a diagnosis, this pay-out could help to offset your co-payment or supplement any medical expenses that you may incur. Additionally, a regular review of your insurance portfolio also ensures that your policies are kept relevant and adequate for your needs.

(See "Comparing Critical Illness Policies")

How FSMOne can help you get on track

Our team of friendly advisers are able to help you review your financial objectives, long term commitments, and offer you investment and insurance advice specific to your needs. If you would like assistance in reviewing your financial and protection portfolio, or simply to get a quote for an insurance plan,

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1Source: http://www.aon.com/attachments/human-capital-consulting/2017_GB_Trends_brochure_20170105.pdf

2Source: https://www.channelnewsasia.com/news/singapore/5-per-cent-co-payment-new-integrated-shield-riders-10021398

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