Do your eyes glaze over every time someone mentions “MediShield Life” or “healthcare?” I don’t blame you. It’s not exactly a topic that’ll have you and your drinking buddies talking for hours.
Hell, you’re probably more likely to talk about the mating habits of Kai Kai and Jia Jia before the words “MediShield Life” ever leave your lips.
Sadly, the only time you’ll probably ever talk about MediShield Life, and more importantly, understand it, is when you’re in a situation where you need to use it for a large hospital bill.
There’s no need to panic though, because we’ve got you covered on what the changes the MediShield Life Review Committee recommended to help reduce the impact of huge healthcare bills.
A Little Refresher on MediShield Life 101
During the Prime Minister’s National Day Rally (NDR) in 2013, it was announced that MediShield coverage would be extended to everyone under its new name, MediShield Life in 2015.
I’m not going to lie – understanding MediShield Life does take a little bit of time. However, you can get a better understanding of how it works by reading our article “What NDR 2013 Means For the Future of MediShield.”
In short though, there are three major components that you’ll need to know about when paying healthcare bills:
- The Premium: Depending on your age, you’ll need to pay an annual premium through either your Medisave account or with cash ranging from $50 to $1,190.
- The Deductible: Depending on your age and the type of ward you’ll be staying in, you’ll need to pay a once-per-policy-year deductible ranging from $1,500 (Ward C) to $3,000 (Ward A).
- The Co-Insurance: Depending on your citizenship status, the ward you’re staying in and size of your hospital bill, the co-insurance determines the percentage of the MediShield Life claim you’ll need to pay.
To see what a “sample” hospital bill will look like when you compare MediShield to MediShield Life, you can click here to take a peek at several MOH examples.
Here’s What the MediShield Life Review Committee Recommends
Recognizing that certain changes needed to be made to MediShield Life to offer Singaporeans better healthcare coverage, the Ministry of Health (MOH) created a special Review Committee. Here are the committee’s recommendations:
- Introduce Cradle to Grave healthcare coverage
- Eliminate the lifetime claim limit (originally set at $300,000)
- Raise the yearly claim limit from $70,000 to $100,000
- Raise the daily claim limit for outpatient chemotherapy and radiotherapy
- Raise the daily claim limit for normal and ICU wards up to 55%
- Raise the daily claim limit for surgery up to 93%
- Raise the daily claim limit for community hospitals by 40% to $350
- Raise the premiums for those with pre-existing conditions by 30% (over a 10-year period)
- Offer “transitional subsidies” over four years to help Singaporeans adjust to the higher premiums
So what exactly do the above points mean? The short answer to that question is this – because your daily/yearly/lifetime claim limits are higher, the amount of cash you’ll need to “top up” for healthcare will be lower. That means less out of pocket cash will be needed to pay for hospitalization bills.
Well, that is unless you have a pre-existing condition, in which case you’ll pay 30% more for a period of 10 years. Then again, having coverage for pre-existing conditions (even at a higher price) still beats not having coverage at all.
Your MediShield Life Premiums Will Go Up (Did You Think the Rising Claim Limits Came Free?)
Ah, but there’s one more important detail that MOH is stressing about these changes, and that’s the reality that better benefits and coverage don’t come for free – they come with higher premiums.
Of course, one of the recommendations mentioned the inclusion of “transitional subsidies” that are supposed to help Singaporeans adjust to higher premiums over a period of four years.
The subsidies will no doubt help Singaporeans cope with the rising premiums. However, the transitional subsidies only help under the assumption that wages will increase just enough to beat inflation.
If your wages remain stagnant and you experience a medical emergency after the four year transitional subsidy period, you’re still stuck paying the full premiums. As of now, there’s no word what will be done to remedy these kinds of situations, especially for Singaporeans who walk the fine line between being low- and middle-income.
What do you think about the MediShield Life Review Committee’s recommendations? Share your thoughts with us on Facebook! For even more useful information on everything personal finance, visit MoneySmart today!
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