CPF MediShield Life in Singapore: Everything you need to understand & use it

But what the heck is MediShield Life anyway? How do you benefit from it? And why do you need it when part of your CPF contributions already have to go into your Medisave account? These questions and more will be answered right here.

What on earth is MediShield Life?

Have you ever been told that you’ll go bankrupt if you fall seriously ill and don’t have medical insurance?

Well, guess what, even if you’ve never spoken to an insurance agent or purchased a single insurance policy in your life, you actually are covered by medical insurance, and that’s MediShield Life.

MediShield Life is a basic medical insurance plan which all Singaporeans and PRs are automatically enrolled in.

It works in the same way as other types of health insurance. Basically, you can make a claim for certain types of medical bills, including hospitalisation and certain types of outpatient treatment.

The catch is that, being a very basic plan, there are strict limits as to how much you can claim and what is covered.

For instance, if you get hospitalised, your MediShield Life payouts will only able to cover the cost of Class C or Class B2 wards at public hospitals.

To give you an idea of the difference in price, here are the median hospital bills from MOH for a knee joint replacement surgery at the various wards:

For public hospitals alone, the moment you upgrade from Class B2/C to Class B1/A, prices more than triple. Big difference!

So if you want to stay in a higher class ward or go to a private hospital, MediShield Life won’t be enough. You’ll need to supplement your plan with an Integrated Shield plan (more on that below) for higher coverage, and/or top up the remainder in cash or Medisave.

Who is eligible for MediShield Life?

All Singapore citizens and PRs are automatically granted lifetime protection by MediShield Life.

If you are a PR, it’s important to note that the amount of subsidies you receive at public hospitals will be lower than what Singapore citizens receive. This is likely to result in your having to pay higher out-of-pocket charges.

You cannot opt out of MediShield Life, and have to continue paying the premiums over your lifetime — unless you live overseas and have no intention of returning. Then you can apply to opt out.

You enjoy lifetime coverage regardless of any pre-existing medical conditions.

What benefits do you get from MediShield Life?

Here’s a quick look at the current MediShield Life benefits (i.e. how much you can claim). Table taken from the Ministry of Health.

What are the MediShield Life exclusions?

There are certain things you can’t use MediShield Life to pay for, such as the following.

• Ambulance fees
• Cosmetic surgery
• Maternity charges (including Caesarean operations) or abortions, except treatments for serious complications related to pregnancy and childbirth.
• Dental work (except due to accidental injuries)
• Infertility, sub-fertility, assisted conception or any contraceptive operation
• Sex change operations
• Optional items which are outside the scope of treatment
• Overseas medical treatment
• Private nursing charges
• Purchase of kidney dialysis machines, iron-lung and other special appliances
• Treatment which has received reimbursement from Workmen’s Compensation and other forms of insurance coverage
• Treatment for drug addiction or alcoholism
• Treatment of injuries arising directly or indirectly from nuclear fallout, war and related risk
• Treatment of injuries arising from direct participation in civil commotion, riot or strike
• Expenses incurred after the 7^th calendar day from being certified to be medically fit for discharge from inpatient treatment and assessed to have a feasible discharge option by a medical practitioner
• Treatment of self-inflicted injuries or injuries resulting from attempted suicide
• Vaccination
• Surgical interventions for the following rare congenital conditions which are severe and fatal by nature: Trisomy 13, Bilateral Renal Agenesis, Bart’s Hydrops and Anecephaly

Here’s the MOH page with an up-to-date list of exclusions.

What is the deductible and how much must you pay?

So, you might have read that there is a “deductible” for MediShield Life. The deductible is the amount of money you have to pay before you can make your first MediShield Life claim each year, and it depends on which ward you stay in.

You will only have to pay the deductible once a year, even if you make multiple claims in that year.

Example:

You get hospitalised twice in a year, and in both cases you get warded in a Class B2 ward. Your first medical bill is $8,000 and the second is $4,000, making a total of $12,000.

Being under 81 years old, you would thus pay a deductible of $2,000 after your first hospital visit. As deductibles are only payable once a policy year, you would not have to pay any deductible when making a claim for your second visit.

What is the co-insurance portion and how much must you pay?

The deductible isn’t the only money you need to fork out in order to make a MediShield Life claim.

You will also have to pay co-insurance, which is calculated as a percentage of the amount you’re trying to claim. While the deductible is charged only once a policy year, co-insurance must be paid each time you make a claim.

The amount of co-insurance you must pay varies according to the size of your bill.

Example: Let’s take the example in the previous section, where you incurred two hospital bills worth $8,000 and $4,000 respectively, and paid a deductible of $2,000 after the first hospital visit.

After paying your deductible, you’ve still got $10,000 worth of expenses.

ALSO READ: Health insurance in Singapore: Everything you need to know to survive

After the first hospital visit, which cost $8,000, you paid a deductible of $2,000. You would then submit a claim for $6,000. The co-insurance portion for that sum is 10 per cent of the first $3,000 and 5 per cent of the next $3000, so you would pay $450 and claim the remaining $5,550.

For the second hospital visit, there is no deductible, so you can submit a claim for the entire bill of $4,000. The co-insurance portion is 5 per cent for the first $2,000 and 3 per cent for the next $2,000 so you would pay co-insurance of $160, and then receive $3,840 worth of MediShield Life payouts.

In this scenario, your total medical bill of $12,000 is broken down as follows:

As you can see, to cover your medical bills totalling $12,000, you would have to fork out $2,610, and the rest would be paid by MediShield.

How do you make a MediShield Life claim?

The claims process differs depending on whether you have purchased an Integrated Shield Plan (ie. a private health insurance policy that works in tandem with MediShield Life), or whether you will be relying solely on MediShield Life.

If you don’t have an Integrated Shield Plan

You’re probably wishing you had an Integrated Shield Plan right now. The good news, if we can call it that, is that the paperwork for your MediShield Life claim will be handled by the staff at your hospital or other healthcare provider.

Once you are admitted, inform the staff that you wish to make a MediShield Life claim to pay part of your bills. The medical institution will submit your claim on your behalf after receiving your authorisation.

The MediShield Life payouts will be computed based on the relevant benefits and claim limits, taking into account the deductible. You can then use your Medisave or cash to make the payment for the co-payment amount.

The MediShield Life payout will be released to the medical institutions by the CPF Board after the claim has been processed.

If you have an Integrated Shield Plan (IP)

Contact your insurer or agent immediately when you know you’re going to be admitted to hospital. Also inform hospital staff that you wish to pay your bill using your IP.

MediShield Life is included in all IPs. IPs comprise of 2 components, where the MediShield Life components are run by CPF board and the additional private insurance coverage component is run by the insurance company.

ALSO READ: MediShield Life review 2020: Why are our premiums still increasing in this economic climate?

Your insurer will process your claim and send payment to the hospital or other medical institution on your behalf. They will also handle the documentation for your MediShield Life claim, and the portion of your bill being paid by MediShield Life will automatically be sent to the medical institution.

Obviously, whether you have an IP or not, any sums on your bill that cannot be covered by MediShield Life or your IP will be dutifully billed to you.

What happens if you have a pre-existing condition?

Unlike most kinds of insurance, MediShield Life covers all pre-existing medical conditions.

If you joined MediShield Life with one of the below pre-existing conditions (E.g. in the case of PRs) you will need to pay 30 per cent additional premiums for 10 years.

After 10 years, your premiums go back to normal. Additional premiums are Medisave-payable.

How much are MediShield Life premiums?

Of course, somebody’s got to pay for MediShield Life. You will have to pay MediShield Life premiums annually, and these premiums will rise as you age.

The good news is that you can pay 100 per cent of your MediShield Life premiums using Medisave.

Your premiums will be automatically deducted from your Medisave account if you have enough. Or, your immediate family members may pay your premium using their Medisave.

Can you get MediShield Life premium subsidies?

Yes, if you’re in the lower income group. You can get discounted premiums ranging from 15 per cent to 50 per cent, depending on your income level. Here are the 2019 MediShield Life premiums after subsidy:

To figure out which group you belong to,

• Lower income: Household monthly income of $1,200 or less per person.
• Lower-middle income: Household monthly income of $1,201 to $2,000 per person.
• Upper-middle income: Household monthly income of $2,001 to $2,800 per person.

In addition, to receive any subsidies at all, you must live in a residence with an annual value of $13,000 or less. If you live in a residence with an annual value of between $13,001 and $21,000, your subsidy rates will be cut by 10 per cent.

Oh yes, and those who are part of the Pioneer Generation get 40 per cent to 60 per cent in MediShield Life premium subsidies from age 66 onwards.

Meanwhile, the Merdeka Generation gets 5per cent premium subsidy from age 60 to 75, and 10 per cent subsidy from age 76 onwards.

Updates to MediShield Life in 2021

Healthcare being a major government priority, MediShield Life does undergo a certain amount of scrutiny by the higher-ups, and does get tweaked from time to time to meet coverage gaps.

But in 2021, there will be a major review of the MediShield Life scheme. Due to healthcare inflation, the current benefits are now lagging behind the actual cost of healthcare and need to be revised upwards.

The proposed changes include:

• Revising the annual claim limit from $100,000 to $150,000
• Higher claim limits for the first 2 days of hospitalisation, which is when most diagnostics and tests happen
• Higher claim limits for intensive care, dialysis, and psychiatric care
• Higher coverage for sub-acute care at community hospitals
• Coverage for attempted suicide, self-harm, substance abuse and alcoholism
• More affordable day surgery for the elderly — so they do not need to be warded to claim
• Private hospital claims will be capped at 25 per cent down from 35 per cent

However, these enhancements would also mean up to 35 per cent increase in MediShield Life premiums. Yikes.

What is an Integrated Shield Plan and how does it work with MediShield Life?

You’ve already heard that you can’t rely solely on MediShield Life because of how basic it is.

But the solution is pretty easy: Upgrade your coverage is to opt for an Integrated Shield Plan (IP), which can be paid for with Medisave. There are 7 insurers that provide IPs in Singapore.

Integrated Shield plans comprise the MediShield Life base plan + additional private insurance provided by the insurance company. So there’s no duplicate here.

ALSO READ: With so many Integrated Shield Plans available, how do you decide which to choose?

One of the biggest benefits to getting an IP is that you have the option of staying in private hospitals or upgrading to Class B1 and A wards and get covered. This also gives you the chance to choose your own doctor, with the possibility of shorter queues and wait times. You can also buy riders for your IP to receive even greater coverage.

The downside is obviously that you’ll be paying higher premiums if you have an IP, and there may be a cash portion that cannot be paid using Medisave. These premiums may be affordable when you’re young, but they’ll rise as you age and can eventually get quite hefty.