My Health Insurance
Getting to know our national health insurance and sharing my health insurance considerations
This essay is primarily for Singapore citizens and permanent residents because I discussed our national health insurance. If you are outside of Singapore, the second half of this essay, where I share my considerations for health insurance, could still be useful to you. If you are curious about health insurance at large, I recently published an essay on why dealing with health insurance can feel so frustrating and what we can do to manage our premiums and medical costs.
As part of our research into healthcare, Swee Kiat and I have dove deep into insurance, particularly health insurance. Before this, I knew little about health insurance, even though I bought one about 10 years ago. I have since picked up a thing or two, which I hope will be helpful to you too.
I will not prescribe what health insurance is good for you because everyone’s situation is different. But I shared my considerations for my health insurance below, in case it’s helpful to have a reference.
But let’s go through the basics first, which surprisingly most people don’t even know.
Everyone has MediShield Life
MediShield Life
In Singapore, everyone is covered by a basic national health insurance, MediShield Life. It covers all Singapore citizens and permanent residents (PRs) for our entire lives, even if we have pre-existing health conditions1. As a citizen or PR, we are automatically enrolled in it when we are born. Premiums are automatically deducted from our MediSave Account. The government guarantees that nobody will lose coverage because they cannot afford it. In other words, you don’t have to do anything to be covered by MediShield Life—which is probably why most people do not have a clue about MediShield Life.
Quick aside: Why force everyone to get this insurance? One of the behavioral science explanations is that we want enough people to be paying premiums to cover the overall medical cost incurred. If it was optional, healthy individuals might be less inclined to get insurance. The insurance pool would then consist mostly of the sick, who would file for claims more often. The insurer would need to raise prices to cover their cost, discouraging even more healthy individuals from buying insurance. This can eventually lead to a death spiral, where insurance is no longer viable for the market because the medical bills are much more than the premiums collected. Essentially, we want to share the burden and have healthy individuals, who might also fall sick, to help cover medical bills.
MediShield Life aims to cover almost all (9 out of 10) subsidized treatments in public hospitals (Class B2/C wards). It covers mostly inpatient stays and some outpatient treatments, such as cancer treatment, dialysis, and long-term parenteral nutrition. This is why you might have heard the advice to “always stay in the hospital or you will not be covered by insurance”2. That is mostly true but also changing. After the recent 2024 MediShield Life review, the Ministry of Health (MOH) will be increasing MediShield Life’s outpatient coverage to include new outpatient treatments and home-based care.
Integrated Shield Plans (ISPs)
MediShield Life provides rather basic coverage. That isn’t to say it is insufficient. Whether it is sufficient depends on your health conditions, how actively you pursue treatments, and your preference for hospital ward class. If you want more coverage, you can purchase Integrated Shield Plans (ISPs).
ISP = MediShield Life + Private Insurance
ISP is MediShield Life with additional private insurance coverage, provided by the private insurers. Here’s something that confuses many people: As explained above, everyone has MediShield Life. If you get an ISP, you will still have MediShield Life. But also, you won’t have two MediShield Life. Part of the premium you pay is for MediShield Life and the remaining is for the additional private coverage. The MediShield Life portion is usually paid with your MediSave; the remaining can be paid with your MediSave, up until a limit.
There are four levels of coverage of ISPs across all the insurance companies:
Private hospital and below
Public hospital class A ward and below
Public hospital class B1 ward and below
Standard (for public hospital class B1 ward and below but the benefits are set by the government)
When you stay in higher class wards, the insurance company will prorate the coverage. For example, if you only have public hospital class A coverage but stay in a private hospital, the insurance company will cover up to, say, 65%.
Riders
Even with an ISP, you would still have to pay for some of your medical expenses. This is to reduce moral hazard, where people abuse the system if they are not paying the bills. You have to pay up to a certain amount every year (known as “deductibles”) before insurance kicks in. Even then, you have to pay a percentage of the remaining bill (known as “coinsurance”).
If you don’t want to pay deductibles and coinsurance, you can get a rider, which will cover them and provide some additional benefits. But again to prevent overuse of healthcare, the government requires ISP riders to include a 5% or more co-payment, up to an annual cap of $3,000. In other words, you will still have to pay a portion of your bill, albeit a smaller percentage, and up to a limit. The additional premium for riders cannot be paid using your MediSave, which means you have to fork out the cash.
If you have any questions about MediShield or ISPs, you can ask our free AI chat app for Singapore’s health insurance. We built it to encourage people to understand their health insurance and make more informed healthcare choices.
My health insurance
First, some context: I’m married with a little boy. I run a business (in other words, unstable income) while my wife has a stable job. Both we and our families have no medical conditions that would give us issues with insurance. I’m generally risk-averse3.
Second, disclaimer: I share this just so that you can have a reference but this is not financial advice. Nor am I a financial advisor. Please discuss your health insurance with a financial advisor. Our financial situation, healthcare preferences, and risk tolerance could be worlds apart.
The plan I have is Income’s Enhanced IncomeShield Preferred, with Assist Rider45.
Income
I bought from Income because it was (and might still be) the only insurance company that allows you to buy online, without talking to an insurance agent. I did this because I don’t particularly enjoy talking to insurance agents. While picking the insurer based on this might not be the most optimal decision-making process, it is good enough for me.
I’d add that Income has one of the lowest premiums among the insurers and it is impossible to truly compare all the companies because they have and will change their plans. So a good enough decision is good enough for me.
That said, unless you are motivated enough to read up on health insurance and understand your healthcare preferences, I believe speaking to some insurance agents is still advisable for most. Insurance agents are regulated by the Financial Advisers Act 2001 to act in your best interest (even though it is debatable whether they do that since “best interest” is subjective). The general advice is to be upfront that you are only looking for health insurance and not life insurance (unless you are). I also recommend browsing through r/singaporefi first to read the different considerations and advice from other Singaporeans.
Private coverage
I chose the private coverage plan because I thought I’d prefer a private hospital if, in the unfortunate event, I have to be warded.
But to be fair, class C wards, the lowest tier, isn’t that bad. I was recently in class C wards almost every day for several weeks because a close relative was hospitalized. While there is no air conditioning, it is cold enough at night. The only risk is having rude neighbors in the 6-bedder wards, which can disrupt your rest. Most importantly, the quality of care, from what I have seen so far, is still sufficiently good. This is thankfully something that can be expected in Singapore. However, this ultimately depends on your comfort level and preference.
More comfort comes with higher premiums. According to MOH, the lifetime premium of private hospital plans can be as high as $323,900 while that of standard plans can be as low as $41,400. Also, MOH found that half of patients with private coverage and riders still used subsidized public healthcare. They could have saved lots of money by getting insurance with lower coverage.
Rider
Finally, I added a rider because I want to limit my out-of-pocket expenses in the worst-case events. With my rider, I do not have to pay deductibles and coinsurance. I do have to pay a co-payment of 10% but up to a limit of $3,000 every year6.
I must admit I didn’t calculate the cost for different potential scenarios to determine whether the rider would be worthwhile. It is mostly because a relative’s rider saved her from paying huge sums for her cancer treatment. I’m also not sure it is possible to forecast the potential scenarios accurately; here’s an interesting Reddit thread on this.
But riders are expensive and cannot be paid with MediSave. To save money, I considered not having any rider while I’m young and healthy and adding it when I’m older. Insurance companies have thought about this too because it will make them less profitable. There are often waiting periods when a plan is changed to prevent such schemes. In simpler terms, the insurance company will not cover some conditions for several months after a purchase or an upgrade because otherwise people would only purchase or upgrade when they know they need the additional coverage. Also, there is a risk of being rejected if I happen to develop health conditions before I try to add a rider.
Paying for peace of mind
After all my research, I cannot help but wonder if this is the best health insurance for me. Can I lower my cost, without sacrificing my coverage? Should I switch insurance companies? Everyone optimizes for different things. Some want the best coverage, some want the lowest price.
But insurance companies don’t make things easy since plans and premiums can change throughout our lifetimes. Also, insurance company-hopping isn’t a good strategy because the new insurance company could add exclusions, increase premiums, or even reject you if you have developed health conditions.
Upon reflection, I realized I’m fine with the premium I’m paying for the peace of mind and convenience it gives me. For now, I’ll stick to my plan unless the plan or my situation changes drastically.
(Again, I’m not a financial advisor, so please use this only as a reference and consult your financial advisor.)
If your pre-existing condition is listed here, you will need to pay 30% additional premiums for the first 10 years, after which you will pay the same standard premium as anyone else in your age group. You can use your MediSave to pay your MediShield Life premiums, including Additional Premiums.
On the other hand, this insurance-driven behavior also causes issues for hospitals, which almost never have sufficient beds for patients.
I said I’m generally risk-averse because I would avoid most risks that are out of my control (e.g. stock market, cancer) but I’m fine with risks where I have some control (e.g. startup, general health and fitness).
Assist Rider is no longer available to new applicants. It has been replaced by Deluxe Rider and Classic Rider.
Here’s a random trivia I discovered: Income’s plans are named according to the coverage level. Preferred for private coverage, Advantage for class A ward coverage, Basic for class B1 ward coverage.
The rider with half the co-payment (5%) costs twice my rider, which is too expensive in my opinion.