Critical Illness Plan

Can Critical Illness Insurance Fill in the Coverage Gap for Non MOH Approved Treatments?

On August 2021, MOH has announced that it will only allow hospitalisation plans e.g. medishield life to cover for effective and cost effective cancer treatment base on a newly created cancer drug list. It is no secret that the number one non communicable killer disease is cancer and according to MOH, the cost of treating cancer has gone up by 20% per annum against 6% for other drugs.

This announcement not only affects medishield life but reverberated across the whole integrated shield plan platform provided by private insurer. From April 2023, the same claim restriction will apply to integrated shield plans (IP). This means even for those whom had been insured prior to such enforcement will also have their claims rejected by IP plan if the cancer treatment drug taken is not within the MOH approved list.

Therefore, the purpose of this article is to discuss alternative solutions and the potential risk of just relying on integrated shield plan to cover for any types of hospitalisation treatments.

Integrated Shield Plan Coverage

By 2021, about 70% of Singapore residents own an integrated shield plan (IP) and it is estimated that more than half owns a complimentary rider plan. The IP is one of the most affordable ways of getting adequately insured for hospitalisation among most Singaporeans and Foreigners who holds a work pass. IP plans used to provide up to 100% coverage for treatment cost as well as the selected ward stay, but in 2018, the government rolled out measures that restricts insurers IP to only provide up to 95% of the total hospitalisation cost. This is done as a cost control measure amidst the rising healthcare cost and claims that resulted in some IP plans to hike premiums by up to 300% within a span of 5 years (2015 – 2020).

Restriction of treatment claim to curb consequential hike in IP Premium

Prior to this latest restrictions, Integrated Shield Plans addresses all types of hospitalisations claims if the insured is warded for more than 8 hours or need to go through surgery for treatments including day surgery. Nevertheless, to further curb the uncontrolled hike of insurance premium, restriction of certain treatment insured by Integrated Shield Plans may be the best alternative moving forward.

Indefinitely, the risk will be borne by all individuals that are covered by integrated shield and the question to ask is, “do we have control over our own preferred treatment for the private shield plans that we choose to pay extra for?”

Not so Private after all

Unfortunately, “integrated” shield plans are complimentary to the national healthcare scheme medishield life (MSL) and will inadvertently get affected by policy changes affecting MSL. Therefore, it is certain that should you choose to rely only on integrated shield plan to provide coverage for hospitalisation treatment cost, then the best way to avoid disappointment is to not expect the best treatment that one can get.

Take matters into own hands.

As the saying goes, there are three types of people in this world. One that make things happen, one that let things happen and one that observes. Most people form the equation of the latter two, but the fact that you manage to find this article, you have probably scaled towards a different path and is ready to find a solution to this. There are three ways to address the claim restrictions on your integrated shield plan:

1. Self-Insure

Self-insurance basically means setting aside your own money to pay for a possible insured event instead of purchasing insurance and expecting an insurance company to pay for you. One way is to keep sufficient emergency cash to cover for unforeseen medical emergencies and for treatment you wish to pursue but not coverable by IP. However, there can be pitfalls, such as the disadvantages of leaving a bunch of money sitting in your bank account idling with no regards for inflation and the inability to predict the cost of future treatments that may cost more than what you are able to put aside.

2. Non Integrated Shield Health Insurance

There are many private health insurance plans that one can purchase in extension or alternative to integrated shield to provide comprehensive hospitalisation coverage. Policy owners may also look beyond inpatient coverage and provide themselves with outpatient GP/SP visit, dental & mental wellbeing, health examinations, vaccinations, and even maternity coverage for such plans. Of course, such plan may cost a “bomb” due to the features and that it is typically more suited for expats living and working overseas. Another risk on such product is the non-guaranteed renewability that gives the insurer the right to terminate the coverage without any reason even when the policy owner has been paying their premium at every due dates. Integrated Shield Plan on the other hands guarantees renewability as long as the policy holder continue to pay their premium on time.

3. Critical illness insurance

If your concern is mainly cancer treatment one can always consider getting a “cancer only insurance plan”. However, those plans are restricted to cancer claim only.

Therefore, if we anticipate further curb to treatment claims from integrated shield plans, one may consider getting a critical illness insurance plan. Critical illness insurance plan provides a lump sum payout regardless of the type of treatment one pursues, and cost incurred. The amount of payout and policy duration is determined by the buyer. In Singapore, eligible claim for critical illness insurance is defined by the Life Insurance Association to ensure that there should be a standardised definition for critical illness claims on the most diagnosed illnesses. However, such standardisation is limited to the advance stage critical illness diagnosis and definition for early to intermediate stage are still broadly defined by different insurers although there are already signs of standardisation in existence.

Critical illness insurance is typically taken up to provide loss of income replacement in the event one is diagnosed with CI and unable to provide for themselves and their family and the consensus is hospitalisation plan should provide coverage for cost incurred for hospitalisation treatment upon any ci diagnosis. However, as we know, such reliance may be a risk to an individual financial well being and critical illness insurance plan may fulfill the protection gap left by such restrictions currently in place and potentially more in future.

What Should I Do?

Amidst the rising healthcare cost and uncertainty regarding claimable hospitalisation treatment cost in future, it will be wise to seek advice on risk mitigation. Moneyline.SG partner with MAS-Licensed representatives to provide you with objective advice and help you compare insurance plans and quotes from different providers. 100% Free & No Commitment. Retrieve your info using your singpass app or manually fill in the form below.


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