Changes to the hospital plan that will affect you as a consumer

I am an insurance agent, but I am also a consumer of insurance plans. On one hand, I need to explain to my clients about changes in the industry and on the other, I also have to accept that these changes affect me as a consumer. Recently it was announced that insurers were moving away from covering hospitalization bills in full.

Even though I have never used my hospital plan before, I was always comforted in knowing that should a bill arise, it would be covered completely, and I would not need to pay a single cent out of pocket. Alas, this is not the case anymore. My own hospitalization plan now only covers 95% of my bill with a 5% co-payment. In fact, today there are so many different factors that make up my own hospital plan. These include co-payments, a panel of doctors, claims adjusted pricing and pre-authorization for claims. What does this mean for consumers?

1. Co-Payment

In a bid to make health insurance costs sustainable and affordable, insurers have now introduced a co-payment for hospital bills. This means that should you need to consume healthcare services, you will need to pay a portion of the bill before your insurance kicks in. For most insurers, this amounts to a 5% co-payment (conditions for co-payment differs between insurers).

A good thing to note is that this co-payment can be paid for (partially or fully depending on what you end up claiming for) using Medisave. There might be cases whereby Medisave alone will not be sufficient, and you would need to top up the remainder in cash. This is still ok for small bills but what about significantly higher bills? For a $100K bill, your co-payment would end up being $5K and that can be a huge amount for some. What can be done to reduce this amount? This is where the next point comes into play.

2. Panel of Doctors

Previously, I could go to ANY hospital, pick ANY doctor and still be covered in full. I would now have to rethink this. This is due to the fact that to cut costs and limit their exposure to potentially high bills, insurers now have an approved list of healthcare providers known as panel doctors. In recent years, due to overcharging by some medical practitioners and overconsumption of healthcare services by policyholders, insurers have been faced with high claim costs. In a bid to reduce claim rates, insurers believe that having a panel of doctors who have benchmarked their fees to MOH regulations will help tremendously. The classification of panel doctors is mainly for those in private hospitals as all restructured hospital doctors are under the insurers’ panel.

Panel doctors are chosen based on their past claims which must be deemed reasonable, the volume of suspicious claims, their overall reputation and training records and credentials as well as any disciplinary issues with the Singapore Medical Council. There are currently only a few doctors on the panel and this does not bode well for consumers who now have limited choices of doctors. Does this mean your hospital bill cannot be claimed just because you choose a non-panel doctor? No. Choosing a panel doctor mainly helps to limit your co-payment exposure. In my previous example of a $100K hospital bill, the co-payment of 5% amounted to $5K. However, certain insurers now have a cap on this co-payment should you end up going to their panel of doctors. In my instance, it will now be capped at $3K. If I choose to go to a non-panel doctor, I will need to pay 5% of the bill with NO CAP. I am hopeful that more doctors will get chosen under the panel but this might take time.

3. Claims Adjusted Pricing

If you own a car, you will be familiar with the idea of No Claims Discount (NCD). This means that should you not have any claims from the year prior, your insurance premiums will be discounted by a certain percentage. The converse is also true whereby should you claim, your premiums will increase. This is going to be extended to health insurance policies as well. Should I end up claiming on my policy, my premiums will increase by a factor. But this is only true should I go to a non-panel doctor (in a private hospital). This will make policyholders think twice before wanting to proceed with their own doctors who are not on the insurer’s panel. If I choose to go under a panel doctor, my premiums will remain at the standard rate despite having a claim.

If I do not end up with any claims on my policy, I get a 20% discount off the standard premium level! This is the silver lining to the claims adjusted pricing in my opinion. It might also sway my decision to choose my doctor in the future should the need arise.

4. Pre-Authorization for Claims

Pre-authorization for claims can ensure a hassle-free discharge as it allows for an assessment of your eligible claims on medical expenses even before your hospital admission. This means that should your claims get approved, you will not need a deposit upon hospital admission and the insurer will settle your claim directly with the hospital. This allows the policyholder peace of mind in knowing that the bills will be paid and in turn, they can focus fully on their recovery. This is great if you know you might have a hospital admission in the coming future. I have done several pre-authorizations for my clients and the process has been quite easy. However, if the hospitalization is due to an accident and emergency, then you will need to proceed with the claims as per normal. This includes having to pay the deposit should the hospital require it.

Is an integrated shield plan still essential after all these changes?

All Singaporeans and Singapore PRs are covered by basic medical insurance in the form of Medishield Life. It is administered by the Central Provident Fund (CPF) Board with payouts pegged at B2/C wards in restructured hospitals. The good thing about Medishield Life is that it also covers pre-existing conditions which your private insurers might not. Where Medishield Life falls short, is in the coverage for A/B1 wards in both private and restructured hospitals and that it also does not cover pre and post-hospitalization expenses. Sickness and accidents can happen to anyone at any time. The cost of treatment in Singapore is also not cheap. Rather than face an unknown bill, paying a known premium can help you manage your expenses should something unfortunate happen. Moreover, since an integrated shield plan has Medishield Life as a base, it can be looked at as an upsize to the existing Medishield Life coverage. For a slightly higher premium than the Medishield Life premiums, you can instantly get higher annual coverage limits compared to the $150,000 annual limit set by Medishield Life.

To determine if you should have an integrated shield plan or not, you should ask yourself these questions:

• How much coverage do I want or need? This will determine the riders or add-ons you include in your medical insurance portfolio.

• Where would I want to be treated? A Private or Restructured Hospital? This will determine the coverage tier you end up choosing.

• Do I have a doctor I want to receive treatment from? Are they on my insurers’ panel of doctors? This will determine if your co-payment has a cap or not.

• Am I able to afford the premiums of the plans I choose in the long term? Premiums for hospital plans increase with age and can be significantly higher when you are much older.

If you need help navigating through your hospital plans to see if they are covering you for what you want, leave a comment below or email me at agentmamasg@gmail.com, and I will be happy to have a chat with you! Stay safe and healthy!