6 medical insurance issues in Singapore you should know

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It's been pretty intense and quite heated at times, but there is a silver lining in the on-going discussion on medical insurance. The saga has made many more people realise how rising costs can have a big impact on the premiums they pay.

As in all financial products, customers of Integrated Shield Plans (ISP) have a choice in ensuring that they get the best bang for their buck, and not be at the total mercy of either the insurers or the healthcare providers.

While the latest changes to insurance terms as well as an on-going review seem to suggest that policy-holders are most vulnerable, the time-honoured notion that the customers are always right can still be upheld here.

But you must do your part to understand the products that you buy, how much you need and then start planning for it.

Here are six issues on medical insurance that you should know.

 

Changing policies

Whenever this topic is raised, many people will immediately bemoan that they cannot switch their plans without affecting the coverage for existing medical conditions.

But in the first place, why do you want to switch? If you think that an insurance policy is like a mobile phone plan and that you will enjoy savings when you switch providers, you are wrong.

A check by Invest shows that all policies are competitively priced - so even if there is no exclusion for your existing medical conditions, you will probably end up paying about the same or even more with the new insurer.

Indeed, the perceived "savings" between the most expensive and cheapest policies based on total premiums payable over 40 years is just about 10 to 20 per cent of the cost annually.

Even so, this price difference is not a fair reflection of your outlay: You may save a bit on the premiums but you can end up paying more if the "cheaper" policy does not suit your needs, in terms of the choice of panel doctors, hospitals as well as its claim and co-payment process.

So don't think about switching insurers to save money, unless you are certain to enjoy "good health" discounts by buying one of the claim-based policies offered by three insurers here.

If you want to switch to another insurer because your preferred doctor is on its panel, here is what a senior executive at a top insurer advises - ask your doctor for a medical report of your condition.

If your condition is under proper treatment and control, there is a high chance that the new insurer may offer you a standard policy that will have no exclusions, especially if its panel doctors are the ones who make the recommendation.

After all, what insurer will turn away business, especially when the customer is willingly seeing its panel doctors? Ultimately, it is a commercial decision since a health check-up is not part of the requirement.

If you are determined to switch at all costs, do your part and check with your insurer's six other competitors - one of them may just offer you a new policy.

 

Downgrade with the same insurer

If you feel that your current ISP premium is too costly and you want to pay less without losing the coverage for staying in single wards, you can ask your insurer to change your plan to one that covers only public hospitals.

Prudential Singapore, the only insurer which has selected private hospitals on its panel, also has a "preferred" plan that provides coverage for panel private hospitals.

There are two benefits that come with such a switch - as you are still with the same insurer, the coverage for your existing conditions will not be affected.

Depending on your insurer, you can enjoy savings of up to 40 per cent of your annual premiums by opting to seek treatment at only public or selected private hospitals only.

 

Panel doctors

Before you jump on the bandwagon to complain about this, find out what your own insurer has to offer first. It is not a bad thing seeing panel doctors - you will enjoy a seamless claim process and do not have to worry about upfront payments for large bills.

Some insurers also offer similar coverage for non-panel doctors, if you seek their permission first. So get your doctors to cooperate and see how they can help you.

Even if your insurer does not offer you this privilege, find out from your doctor how much the whole treatment will cost.

If the total healthcare cost is $60,000 or below, a 5 per cent co-payment share, which is up to $3,000, means your bill is going to be the same as the one for seeing panel doctors.

(The co-payment share for those who see panel doctors is capped at $3,000)

If the bill is considerably higher, say $200,000, a co-payment share of 5 per cent means the bill is $10,000 and you can use both Medisave and cash to pay for this.

Some policies have a much higher co-payment of 10 per cent plus loading of $2,000 so you need to work out your sums carefully.

Frankly, unless this is a recurring illness, you should just pay the extra because your health is more important. So just see your own doctor if you feel it's worth paying for it.

 

Management costs

Many people like to blame soaring premiums on the "high" running costs of the insurers.

To be fair, if you feel insurers don't deserve such fees, then perhaps everyone should also start a campaign to bring down the fees of doctors and hospitals too.

The reality is the main cause of high premiums is high healthcare costs and claims.

The business of health insurance is inherently tough - you may complain about paying $5,000 premiums annually, for example, but one hospital claim of $50,000 from you will set the insurer back 10 years in terms of making money from your premium.

This is also the reason why premiums go up with age because the chances of seniors being sick and needing treatment in hospitals is very real.

 

Dispute resolution

If you think you have been unfairly treated by your insurer, you are not without help.

You can file a complaint at the Financial Industry Disputes Resolution Centre (Fidrec), which will then hold a mediation to see whether both parties can settle the matter amicably.

This service is free - you only need to pay an administrative fee of $53.50 if the settlement fails and you want Fidrec to decide whether you have a case.

 

No money to pay premiums

What if you run out of money and do not have enough to pay your premiums?

Not being able to seek treatment at private hospitals is not the end of the world.

All residents here are covered under MediShield Life, which can pay for your treatment at public hospitals.

There are some professionals who simply refuse to spend a cent on private plans because they don't mind staying in common wards at public hospitals. Their motivation is they want to stay healthy for as long as possible since they will save thousands of dollars annually and will have more money to spend in old age.

 

Source: The Straits Times © Singapore Press Holdings Limited. Reproduced with permission.

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