Insurance Singapore MediShield Life Premium and Benefits Proposed Changes

Insurance Singapore MediShield Life Premium and Benefits Proposed Changes

According to Straits Times article, (PUBLISHED SEP 29, 2020, 6:00 PM SGT) MediShield Life premiums may rise by up to 35% next year, which is under proposed changes. This will be the first increase in premiums for the compulsory health insurance since its launch five years ago. At the upper end, the proposed hike will exceed $500 a year. In the article, it also states that, all Singaporeans will receive a 70% subsidy on the increase. This goes down to 30 per cent in the second year. With the increase of MediShield Life premium, it also comes with more coverage and benefits, to cover more and larger hospital medical bills.


The Proposed Higher Premiums Will Allow for Better Benefits, Including:

  • Higher coverage for sub-acute care at community hospitals – such as for someone recovering from a heart attack – and for outpatient radiotherapy. The daily claim limit at community hospitals is currently adequate to cover rehabilitative care, but not sub-acute care, which costs about 20 per cent more. The claim limit is proposed to be raised to $430 a day for sub-acute care.
  • Higher annual claim limit of $150,000, from the current $100,000.
  • Higher claim limits for some charges, such as for intensive care, which will be raised from $1,200 a day to $2,200 a day, dialysis and psychiatric care, among others.
  • An additional $200 a day claim for daily ward charges for the first two days of hospitalisation.
  • MediShield Life will in future also cover treatment for attempted suicide, self-injury, substance abuse and alcoholism.
  • Lower deductible of $2,000 (down from $3,000) for people 80 years and older for day surgery.


Proposed Changes Affecting Private Integrated Plans (IPs)

According to Strait Times article (PUBLISHED SEP 29, 2020, 6:00 PM SGT), there will be a reduce of the amount claimable on MediShield Life from private hospital bills. Thus, the amount of private hospital bills that MediShield Life will cover, will be reduce from 35% to 25%. As integrated plan (IP) is integrated with MediShield Life (which is compulsory for all Singaporeans and permanent residents), their premiums are payable with Medisave, subject to a cap (Additional Withdrawal Limits (AWLs)). This mean that, insurers will eventually have to pay a larger share of private hospital claims, as they will receive a lower pay-out amount from MediShield Life.

However, according to the article, policyholders who opt for A or B1 class treatment in public hospitals will continue to receive pro-ration factors of 35% of their bills paid by MediShield Life.


What is Additional Withdrawal Limits (AWLs)?

According to CPF, The MediSave withdrawal limits are imposed to conserve members’ MediSave savings from being depleted too fast for their future hospitalisation needs. For those with integrated plans (IPs), there will be an Additional Withdrawal Limits (AWLs) to enable Singaporeans to use their MediSave, up to that cap, to pay the additional premium for the private insurance component of their integrated plans IPs. In short, If you buy an IP cover, you will be able to use MediSave to pay the premium for the additional private insurance coverage component up to the Additional Withdrawal Limits (AWLs). Thus, whatever amount beyond AWLs, policyholders will have to top up with cash.

The Additional Withdrawal Limits (AWLs) apply on top of the amount of MediSave used for MediShield Life premiums:

$300 if you are 40 years old or younger on your next birthday.
$600 if you are 41 to 70 years old on your next birthday.
$900 if you are 71 years or older on your next birthday
Each insured person can only have one Integrated Shield Plan paid with MediSave.


What is MediShield Life Deductible and Co-insurance?

According to CPF* deductible is the claimable amount that the insured needs to pay first in a policy year before any payout from MediShield Life. The deductible paid can be accumulated if there is more than 1 claim in the policy year. The deductible ranges from $1,500 to $3,000 of the claimable amount depending on age and ward class. Co-insurance is the percentage of the claimable amount that you need to pay. It ranges from 10% to 3% as the claimable amount increases. And If a deductible is payable, the co-insurance of 10% is applied on the amount above the deductible. Thus, in short, deductible and co-insurance are what the policyholders have to pay, on their medical bill.


One Last Thing

In my personal opinion, the advantages will be the increase in coverage and added cover on treatment for attempted suicide, self-injury, substance abuse and alcoholism. Another advantage is lower deductible of $2,000 (down from $3,000) for people 80 years and older for day surgery. The disadvantages is the changes which affect the private integrated plans (IPs), as to reduce claimable amount from 35% to 25% of private hospital bills. Thus, private insurers might eventually has no choice but to increase on their IPs premium. On the Strait Times article, it also stated that “However, policyholders who opt for private A or B1 class treatment in public hospitals will continue to get 35 per cent of their bills paid by MediShield Life.” I had checked, on CPF Information Booklet For Newly Insured*, on page 16, Table H, the pro-ration factor for B1 class is 43% (for Singapore citizen), thus, if I am correct to assume that there is reduction on the pro-ration factor on B1 class from 43% to 35%. And base on the table, MediShield Life for Class C and B2 are the only pro-ration factor on 100%. Thus, for those who want to go for higher ward class and/or want to select your own hospital type (public or private) and specialist/doctor, integrated plans (IPs) if you are comfortable with the premium, will suits you better, than to solely rely on MediShield Life alone. As integrated plans (IPs) on public restructure hospitals is still relatively affordable. If you not already know, there are two types of integrated plans (IPs), integrated plans (IPs) on public restructure hospitals only and integrated plans (IPs) on both public restructure hospitals and private hospitals.

One major advantage on integrated plans (IPs), is that most integrated plans (IPs) do help to reimburse pre and post hospitalization bill up to 365 days, do find out more from your friendly financial consultant or contact me for more details. These pre and post hospitalization benefits may certainly help in saving a large portion of your pre and post medical expenses.


The article also did not mention, will there be a reduction on the deductible and co-insurance for other age group, it only mentioned lower deductible of $2,000 (down from $3,000) for people 80 years and older for day surgery. It also did not mention, will there be an increase on Additional Withdrawal Limits (AWLs), which will really help policyholders of integrated plans (IPs), which according to Strait Times, 70% of residents here have. I would be delighted to have the AWLs increase, thus policyholders will not require to top up cash at an earlier age. If MediShield Life premium increases and their AWLs did not increase, and with a reduction of pro-ration factor on integrated plans (IPs), I can easily assume eventually policyholders of integrated plans (IPs) on private hospitals will have to pay a higher premium and top up cash at an earlier age, due to their integrated plans (IPs) premium has reached beyond AWLs.

Hypothetically, due to the mentioned situation, majority of the people might eventually opt for public hospitals, will this cause an overcrowding thus longer waiting time and delay in public hospitals? Or, will there be a higher chance that Class C and B2 be full more frequently? Will these changes put pressure on private hospitals and for them to charge a more competitive pricing in the future? I really hope that there will be some adjustment to increase AWLs limit. But these are still at a proposed stage, will keep everyone updated.

Medical insurance like MediShield Life and integrated plans (IPs), will help to reimburse our medical bill, do take into consideration the deductible and co-insurance we have to bear (unless you obtain a rider on your IPs which will help to reduce deductible and co-insurance expenses), so are our living expenses and post hospital recovery expenses. As often, after any major illness, or surgery you may not be ready to go back to work or unable to continue working. Thus, this is where life insurance and illnesses and disability insurance (income protection) comes in to protect your wealth.


Please refer to the sources below for full details:

Straits Times


Note: Opinions expressed are solely in Mr. Chan Kong Meng’s personal capacity and neither express the views or opinions of Prudential nor represent any professional advice in Mr. Chan Kong Meng’s capacity as a PACS representative.



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