All you need to know Guide | Health Insurance Policy in Singapore

Health Insurance | Insurance

Health Insurance in SINGAPORE

Health Insurance is one subject, which crosses everyone’s life at some point or the other, globally. When the matter pertains to one’s health as well as wealth, one should be extra cautious while delving into it. Our effort is to make you understand major terms associated with health insurance, which are commonly referred by Insurers/ Agents. These may prove game-changer when the moment of truth arrives (read: claim). You must understand these terms properly before deciding on your health insurance. More so, you should know you are paying for what services/deliverables.

Important Primers

 Premiums

The amount you pay to buy your policy is known as premium or which keeps your policy in force, is known as premium. It could be single premium, where outgo is annual or in equal monthly, quarterly or half-yearly payouts (regular premiums). Health Insurance premiums usually increase with age, also it follows the principle: More the age, more the premium, less the age, less the premium. Insurers like those people who do not have the record of making excessive claims. For this, they may even discontinue the policy.

Deductibles

It is a fixed amount which you pay every year before health insurance benefits begin to cover the costs. It is the most common feature of health insurance that is paid within the mentioned period. The amount paid as a deductible is non-refundable even if a policyholder doesn’t make a claim.  You usually only need to pay the deductible once in a policy year. Plans with lower premiums usually have higher deductibles. After paying your deductible, you may still have to pay for co-insurance or co-payment. For better understanding, suppose your deductible is S$ 1000 and you fall sick and get hospitalized, which costs you S$10000. In this case, $1000 will be paid as deductible and balance would be payable by Insurance company.

 Co-Pay

Co-payment or co-pay as it is popularly known, is a fixed percentage that policyholder agrees to bear in case of claim whereas rest is borne by the insurer. The co-pay component varies with the kind of treatment, rather the amount of claim. The co-pay component variations are dependent premiums, say if co-pay is higher, premiums would be less. The co-pay works well for both, insurer and the policyholder. Another important feature of Co-pay is that it varies for different services within the same plans. Like for routine services, co-pay is less, but for specialised services, co-pay may be more.  For better understanding, suppose your co-pay is 10% and your treatment cost is $50000, then you need to pay only $5000, the balance would be payable by the insurer.

Similarities between Deductibles & Co-pay: Both are an essential feature of the health insurance and these are fixed, will not change, irrespective of total costs incurred on health care.

Difference: The amount policyholders have to pay in case of co-pay and deductible is the main differentiating factor. Deductibles are generally higher and these are paid once a year, whereas co-pay is ongoing. Policyholders have to apply for co-pay every time they make a claim, it doesn’t matter that they have already made co-pay in their earlier claims. Another striking difference is that co-pay applies only to health insurance whereas deductible applies to health and general insurance both.

Worth noting that co-pays and deductibles are both features of most insurance plans, a deductible is an amount that must be paid for covered healthcare services before the insurance begins paying and co-pays are typically charged after a deductible has already been met. In some cases, though, co-pays are applied immediately.

 Policy riders  

May be considering your Medical condition, you are looking for customised health policy. This is made possible through these riders which are like an addendum to the policy which is standard. In a way rider is an additional benefit which is included in your plan, with which you can expand your policy coverage. If the rider accelerates the basic policy’s benefit, the policy may expire after the rider is paid out.

For riders attached to Integrated Shield Plans (IPs), all new riders from March 2018 will need to incorporate a co-payment (what you pay) of 5% or more. Includes Daily hospital benefit, which pays a certain amount of cash for each day that you’re warded and Critical illness benefit, which pays a lump sum upon diagnosis of any of the critical illnesses covered by the policy.

Riders are a big help if you have a pre-existing condition, if you select certain riders, it will provide you with a certain kind of protection. So, if you have taken riders on your policy then you can avail better care at an affordable premium.

Coinsurance

Coinsurance is a portion of the medical cost you pay after your deductible has been met. Coinsurance is a way of saying that you and your insurance carrier each pay a share of eligible costs that add up to 100 per cent. Say, if your coinsurance is 30 per cent, you pay 30 per cent of the cost of your covered medical bills. Your health insurance plan will pay the other 70 per cent. If you meet your annual deductible in January and need another one in March, it is covered by coinsurance. The higher your coinsurance percentage, the higher your share of the cost is. You are also responsible for any charges that are not covered by the health plan, such as charges that exceed the plan’s Maximum Reimbursable Charge.

Out-of-pocket maximum

 This is the most you could pay for covered medical expenses in a year as the amount includes money you spend on deductibles, co-pays, and coinsurance. Once you reach your annual out-of-pocket maximum, your health plan will pay your covered medical and prescription costs for the rest of the year. Say you have a plan with $3000 as deductible, 20% of Coinsurance at $6350 as out-of-pocket maximum. If your hospital bill for any ailment is said $150,000 then how it will work?

First, your deductible of $3,000 will pay your hospital bill, then your coinsurance steps in. The health plan pays 80% of your covered medical expenses. You’ll be responsible for payment of 20% of those expenses until the remaining $3,350 of your annual $6,350 out-of-pocket maximum is met. Then, the plan covers 100% of your remaining eligible medical expenses for that calendar year.

Policy exclusions

Singapore citizens who are covered by MediShield Life, the coverage here is universal, thus no exclusions. CareShield Life is also universal (has no exclusions) for those born in 1980 or later. But all private health insurance policies have some exclusions. Exclusions are conditions or circumstances where benefits will not be paid. Pre-existing conditions, illnesses or disabilities you had before obtaining private health insurance are usually excluded.

You must make all disclosures related to your earlier illnesses, so that insurer decides accordingly and you are also saved from the shock later. Hence it is advisable to buy health insurance early in your life. There are other exclusions too, which you need to check before buying the policy.

Age limit

Singaporeans who are covered by MediShield Life have no maximum age life. It covers you for life, and there is no age limit for entry into the scheme. However, the minimum age of coverage for CareShield Life is age 30, as it is intended to provide basic coverage for severe disability in old age. Once enrolled, CareShield Life covers you for life as well. But private insurance plans may have an age limit, and may not be available to you once attain a certain age. Though there are certain health insurance policies which provide cover for whole life, while others cover for a fixed period or up to a certain age.

Free-look period

Health Insurance companies grant a 14-day free-look period, whereas IPs have a 21-day free look period. It starts from the date you receive your policy documents. During this period, you should review your policy carefully to see if it meets your needs. If you decide not to keep it, write to the insurance company to give them notice of cancellation. Written notice to the insurer must be given within 14 days (21 days for IPs) from the date you received your policy. The company will refund all your premiums, less medical and other expenses they have already incurred.

Policy renewal

You need to ensure that your cover is in force as long as you pay the premiums on time (e.g. IPs). Even so, the insurer may change the benefits, premiums or conditions when it is due for renewal. Suppose you are changing job, then the policy will cease provided to you as an employee benefit when you stop working for that employer. If the renewal is not guaranteed, the insurer can decide not to renew the policy after a major medical claim. Hence, it is important to know if your policy covers you for the duration you need and if the renewal is guaranteed.

Switching between policies

Health insurance policies usually do not cover pre-existing conditions when you buy them. In case you decide to switch to another health insurance policy, assess if your health has changed from the time you bought in your existing policy and whether you now have any new health conditions.

If you have developed any health conditions, the new policy that you switch to may not provide you with the same coverage as your existing policy. The new policy may also require you to pay more premiums to provide you with specific benefits.

Primers II

Claim limits

You can make limited claims as there are limits to what you can claim under a policy. For example, limits may be included for all claims as well as for each illness, disability, per month, year, or a lifetime.

Benefits

For medical expense insurance, having more policies does not necessarily give you more coverage or benefits, as you can claim only up to your actual medical expenses. At no point will your combined policies pay you more than 100% of your actual medical expenses.

Waiting period

Most health insurance policies impose a waiting period of between 30 days and 90 days from the approval of cover. No benefits will be paid for illnesses arising or treatments carried out during the waiting period.

Deferred period

A ‘deferred period’ means benefits may only be paid after you have been disabled or sick for more than a certain number of days. Before you take up a health insurance policy, check the scope of coverage and waiting or deferred period, if any.

​​No Claim Bonus

No claim bonus is an amazing benefit the policyholder can enjoy on his health insurance. No claim bonus or NCB in health insurance is bonus money added in the sum insured for every claim-free year. It is like a reward that policyholder receives for not claiming on his health insurance. It conveys the benefit that an insurance company offers the insurer for making no claims in a policy year. This benefit is passed on for the renewal year in the form of an increase in sum insured, an increase for which there is no premium hike. The bonus keeps increasing up to a maximum 100 % of your sum insured.

This way we see that there are many points in your policy which needs thorough understanding and its implications of having it or not having it. You need to do thorough research before buying your health insurance policy, still, if something is not getting clear to you, talk back to your insurer.

A small slip here may lead to bigger blip later! 

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