Medical Insurance: Introduction to Health Insurance in Singapore

Medical insurance provides you with a financial safety net in case of sudden illness or disability. Depending on the type of health insurance policy you choose in Singapore, you can rely on your insurance company to settle all or part of your hospital bill if you suffer an accident or fall ill. You can also find policies that give you an income if you become disabled or are in need of a lengthy hospital stay and convalescence.

Singapore has a thriving health insurance industry, which includes a government-driven programme via the Central Provident Fund (CPF) scheme along with private companies that offer general and custom medical insurance products to suit your needs. Private insurance companies often argue that CPF schemes do not provide enough coverage and are inflexible. As a general rule of thumb, people in upper-middle and high-income brackets in Singapore, normally look for private health insurance schemes for more coverage and wider treatment options.

If you are a Singapore citizen or permanent resident, you can participate in CPF related medical insurance policies as well as opt for private health insurance schemes. Foreigners on Employment Passes, Dependant Passes and other work passes are not eligible for CPF contribution and are therefore excluded from its health insurance schemes. Private health insurance is the only option available to EP/DP holders in Singapore.

When looking for private plans, you should take into account the reputation of the agency, the types of policies out there, costs, exclusions, claims and disputes avenues. If you are armed with knowledge, you can make informed decisions. Singapore opened its insurance market to foreign agents in 2000. There are now close to 150 insurance agents in Singapore, most of which offer health insurance products and a handful dealing specifically with health insurance.

Private health insurance guide

Types of medical insurance

Each individual has different medical insurance needs. The following are the main types of medical insurance policies offered by insurance companies in Singapore:

Critical illness insurance – this helps take care of large bills during major illnesses. Critical illness insurance will normally provide a lump-sum payment should you become seriously ill. Although they differ from company to company, typical illnesses and diseases covered by critical illness insurance may include cancer, heart attack, stroke, blindness, Alzheimer’s, kidney failure, etc. A critical illness policy usually has a waiting period for certain diseases or types of surgery. If any disease or type of surgery for which the policy specifics is diagnosed or carried out during the waiting period, no benefits would be paid. You should note that the benefits from a critical illness policy are paid only if the disease or surgery exactly meets the definition in the policy. Definitions of disease are fixed across all insurance companies in Singapore.

Hospitalization Insurance - also known as surgical insurance, hospitalization medical insurance pays hospital medical expenses incurred as a result of an accident or illness. The policy will generally pay expenses for inpatient medical treatment or surgery, some outpatient charges for day surgery, consultations with specialists before and after the hospital stay, and laboratory tests. Some hospitalisation insurance policies may also have ‘deductibles’ which means you will have to pay a fixed amount yourself before the policy benefits are kicked-in.

Disability income insurance – provides you with an income to ease your financial burden if you cannot work because of a disability. Payment of benefits will usually start to be paid only if you are continuously disabled for longer than the waiting period.

Long-term care insurance – this helps you pay for nursing or home care if you are too weak to take care of yourself and are unable to perform certain activities of daily living. You must review carefully what constitutes 'inability to perform daily activities' as it vary from one insurance company to another. Depending on the policy, there may or may not be a time limit associated with such benefits.

Medical insurance costs

In Singapore, health insurance premiums vary depending on your current health, the kind of insurance you seek, your age and your income. There is no standard monthly amount. It can vary from less than $100 to few hundred a month, depending on the type of medical insurance and type of coverage you choose. A more practical approach would be to ask yourself how much health insurance you actually need, considering the above factors. You should also look at the quality of care you seek and how badly you want to guard against the potential loss of income through illness or disability. Clearly, you cannot have premiums that take out a large percentage of your pay. If you are unsure, you should talk to an insurance expert to plan your medical insurance policies keeping in mind your budgetary constraints for premiums.

Be careful with exclusions

Just like anywhere else, many Singapore health insurance policies have exclusion clauses for circumstances or treatments that they will not cover. You should ask about exclusions whenever you are researching a insurance plans and make sure you will not be adversely affected. Usually, exclusions involve pre-existing conditions. As discussed earlier, many insurance companies will refuse to cover you for a condition that you already have. Even CPF schemes have restrictions regarding pre-existing conditions. Of those who do provide coverage for pre-existing conditions, there is normally a waiting period. This means you can’t claim for expenses incurred for treatment of that specific problem until a fixed period after the start of your policy. This period can range from 2 months to 12 months.

Accurate medical information

It is for your benefit that you provide information as accurately and truthfully as possible when applying for a policy. Providing vague information may affect your ability to gain coverage for certain treatments when the time comes.

Making a claim

When making a claim, your insurer will give you a claim form to complete and you should also provide evidence that you received treatment. Hospital bills, medical reports, test results, prescriptions and any other relevant documents should be furnished. Insurers often ask for additional supporting documents so be ready for anything.

Two-week grace period

Once your policy is approved, you have two weeks to go over it. If you are unhappy with the product, you can get a full refund from the insurer. To get your money back, you need to provide written notice that you have decided to cancel your policy within this two-week period.

Disputes

If any disputes arise and neither you nor your insurer can resolve it, you can go to the Financial Industry Disputes Resolution Centre (FIDReC), which provide experts who will attempt to find a settlement or rule one way or the other. The FIDReC covers claims between customer and insurer up to S$100,000 per claim and other claims, such as disputes with banks and third parties, up to S$50,000. If you are still unhappy with the FIDReC ruling, you can go to the Consumer Association of Singapore, the Singapore Mediation Centre or Small Claims Tribunal. Accepting the FIDReC’s ruling means losing the right to pursue legal action.

Basic questions to ask

When choosing private medical insurance policies, look for the following:

• Is it a big-name company? Do they have offices in around the world?
• How much of the medical bills do you have to pay compared to the insurance company?
• Can you choose your own hospital?
• Does it cover pre-existing conditions, which are ailments you had before applying for insurance?
• Are there family plans?
• What are the premium costs? How do they compare to CPF?
• Does it provide hospital room, board and other expenses?
• Does it cover surgical and related costs?
• Does it cover visits to the doctor or clinic?
• Would it protect you from huge financial losses in cases of major medical emergencies?

Government-linked Medical Insurance Schemes

Central Provident Fund (CPF) is a compulsory retirement fund scheme for Singapore citizens and permanent residents. It is optional for selected Employment Pass holders. Under the scheme you and your employer contribute a percentage of to the CPF every month as part of your pension fund. Keep in mind however, the CPF related insurance schemes provide very basic level of benefits only and may not be sufficient for your needs.

The CPF has several health insurance schemes, the two key ones being MediSave and MediShield. You can join either one if you have a CPF account.

Medisave – This was launched in 1984 and is a scheme that helps you to save part of your income for sudden medical expenses. These include hospitalisation, maternity, certain outpatient categories, surgery and other ailments. You will need to contribute a portion of your salary every month to your Medisave Account. The savings can also be used to insure your immediate family members as well.

MediShield – This is an insurance scheme for serious or catastrophic medical cases. It helps to pay for large hospital bills and for treating serious illnesses that require long hospital stays.

MediShield is extended to all Singapore citizens and permanent residents who are eligible for subsidised care. From May, 208, school-going children will be offered coverage on an opt-out basis. There is already auto-cover for newborns. The coverage includes expenses for the treatment of cancer, kidney dialysis through ward charges, surgery, drugs and outpatients. Check out mycpf.cpf.gov.sg for more information.

Other CPF schemes are EdlerShield, Medifund and Private Medical Insurance Scheme (PMIS).

ElderShield – Launched in 2002, this is for cases of severe disability with financial protection for long-term care through monthly cash payouts. Citizens and PRs reaching the age of 40 are automatically covered by ElderShield unless they opt out.

Medifund – This is a government endowment fund to help needy Singaporeans who are unable to pay for their medical expenses beyond Medisave and MediShield.

PMIS – This scheme allows CPF members to use Medisave savings for approved plans through private companies to cover themselves and their dependants.

Final thoughts

When it comes to health insurance in Singapore, the industry makes it easy for citizens, permanent residents and other foreigners to cover themselves at affordable rates. Almost all angles are covered and, coupled with world-class healthcare providers, people living in Singapore can enjoy the many benefits of health insurance.