Tan Kin Lian's Blog: CPF Medishield

Wednesday, November 19, 2008

CPF Medishield

Dear Mr. Tan,

I'm thinking of buying a health insurance but in the market there is so many health insurance. Could you recommend me one company that is providing the best health insurance?

I will be out of job soon, as my company is moving its operations to another country. I'm now 35 years old.

REPLY

I recommend CPF Medishield. As you will be losing a job, there is no need to spend so much money on a private Shield plan.

31 comments:

Anonymous said...: CPF Medishield is good, but you have to cough up the co-payment. I think you would need a private health insurance to cover this co-payment.
You have to check with the approved insurer like GE, AIA, Income, Aviva etc.It's a small amount to pay to have the peace of mind.; November 19, 2008 9:20 AM
Anonymous said...: Hello
Recently i also thought of "upgrading" my health insurance. I looked at the basic CPF Medishield and compared with some of the so called "enhanced" Medishields offered by insurance firms. After some analysis i found to my horror the original CPFMedishield is much better than the "Enhanced" Medishields!!! I checked my calculations twice and the assumptions, it is true!!

The problem is that though the enhanced plans appears to pay more, their Deductible and Coinsurnace are much higher than the CPF basic Medishield. I did a spreadsheet calculation and proved that whether the hospitalisation costs 10K, 20K, 30K..80K, in every instance, after taking into account the formulae for deductables and coinsurances, the equivalent final claimable percentage (of the hospital bill) for CPFbasic Medishield is ALWAYS higher than "Enhanced" plan!!!!

I do not understand why at all the governement allow these insurance companies to cheat the public with their statements of higher payouts, their trick is the higher coinsurance and deductible.

Like the Lehman cases, i am disappointed that the Government should even allow such "enhanced" products in the market at all. To make matters worse, government allows CPF funds to be used. I see clearly that this kind of Enhanced product is again a bad product which should not be in the market at all and especially, the govt should steer clear of allowing CPF funds to be used for it, if the govt still prefers to allow free enterprise in the market to some extent. Let buyers beware, but CPF funds should not be allowed to buy such rubbish just like Lehman bonds.

In conclusion, i fully agree with TanKinlian that the normal CPF Medishield is the best of all.

REX; November 19, 2008 10:34 AM
Anonymous said...: REX,
Ministry of health will say it is caveat eomptor; November 19, 2008 11:08 AM
Anonymous said...: Medishield provides very basic health care coverage eg staying in a ward C or B2. Medishield covers till an age limit (age 75 or 80 ???).
Many may say that staying in a C or B2 ward may be sufficient. But when the means testing start, I am unsure how many of us are entitled to receive subsidy by staying in C or B2 ward.

Jasmin; November 19, 2008 11:30 AM
Anonymous said...: Avoid any private shield plan !!! Just stick to CPF MediShield and your saving for the deductible or co-insurance.

I am relating a story of my relative. He signed up a private shield plan. When he wanted to make a claim, the insurer found all sorts of reason to void his insurace plan. We lost hope on private insurance.

Just save up regularly and avoid unncessary insurance. In Mr Tan's words, "you can lent money back to yourself for free later !".

- OTB -; November 19, 2008 11:36 AM
Anonymous said...: Health minister Khaw has re-engineered Medishield as a safety net for catastrophe medical event. So Medishield pays very little for basic heath care, but pays more for serious medical care. I think this makes sense.

We just have to save up for ourselves, be responsible for our health and keep exercising.

- OTB -; November 19, 2008 11:44 AM
Anonymous said...: Hi Mr Tan,

I would disagree with you on this part. I would suggest the person to purchase a private medical shield plan as it's guaranteed renewal if he continues to pay. Should he claim for certain conditions, they would exclude him for those pre-existing conditions if he were to switch to them at a later date. Furthermore, the Private medical shield plans typically are as charged subjected to yearly limit, compared to medishield which has sub-limits for different claims.; November 19, 2008 2:55 PM
Anonymous said...: Dear anonymous 2:55 pm
I think you are one of those who are decieved by the words "as charged" used in the private enhanced medishield plans quite commonly. This word is just as toxic as the word "minibond". I was initially fooled by it. It looks good, the enhanced private medishield pays "as charged", Wow!.
Read carefully. You still have to pay Co-insurance PLUS deductible before making any claims. I hope you understand these terms.

The normal CPF Medishield, also carries a coinsurance and deductible but because it is lower than the Enhanced Plans, the overall impact on the payments you have to pay the hospital, according to my calculations tips in favour of CPF Medishield, not the "enhanced" Plans! Try calculating yourself to see if i am right or wrong.. You could assume for example you incur hospital bill of $30000 for a hip replacement surgery, find out which plan requires you to fork out less cash overall.
Don't be deceived by such words like "as charged"! I can show you my spreadsheet calculations. The deductible and coinsurance changes the entire scenario!!!!

If you prove me wrong, I will immediately uprgrade to enhanced medishield private plans. We are all consumers in the same boat wanting more benefits at lowest price.

REX; November 19, 2008 5:36 PM
adego said...: how long will medishield cover us? till age 75? anyone knows? thanks; November 19, 2008 5:40 PM
Anonymous said...: 2:55pm, that is why you buy a rider to settle the deductible and co-pay segments. For NTUC Income, there are 2 kinds of riders. One for deductible and co-pay, the other for deductible only.; November 19, 2008 10:11 PM
Anonymous said...: REX you are aware that there are riders u can buy to cover both the deductible and co-insurance right? Also, if I am not wrong you can always downgrade to Medishield but if you are in poor health you cannot upgrade to any of the private shield?; November 19, 2008 10:12 PM
Anonymous said...: It is very important that I have a peace of mind. I rather pay extra cash rather then eventually having a large medical bill that I have no way of paying.

On hindsight, I would rather put my money forever in a fixed deposit earning low interest rate and losing money to inflation rather than placing into any financial products which may cost even more heartache.

In short, the value of a peace of mind is immeasurable. Don't believe? Just ask people who invested in all the structured notes.

Ultimately the person who is asking this question still do not get it. Help yourself because noone will help you!

To each his own.; November 19, 2008 10:27 PM
adego said...: hey guys! be kind to yrself, get a global health plan.

this plan can offer u up to Rollsroyce class service, i.e. as charge 100% at private hospital, super luxury room.

u can also add rider for dental, and include maternity benefit. u can claim from O&G, up to the point of delivery + followup. All paid for, subject to a cap, about $15k

why earn so much money and keep, u may not have a chance to use them. must make good use of money, be kind to yourself.

some ppple are so stingy and calculative, when things really happen, u know if it is worth the penny. I know of someone who died of heart attack, & before he said goodbye to this world, he was in ICU for 50days, the total bill exceeded $300,000 (SGD); November 20, 2008 12:40 AM
Anonymous said...: My hubby is 55 yrs old next June. He has no insurance coverage AT ALL other than Group Term (employer), not even CPF medishield. Some "smart" relative has told him to opt out. Any recommendation of insurance product for him?; November 20, 2008 7:26 AM
Anonymous said...: Yes..peace of mind cannot be measured in $ and cents. Some tell me to put my monies in stocks as it is v cheap now...can expect to earn a lot when the market turns..put in FD, waste time...my response is "so what?..i am not the greedy kind...i like to sleep peacefully at night.

that said...i think when we degrade the various financial products offered by banks and other financial institutions, lets bear in mind also that at the other side of the equation, there are hosts of analysts, fund managers, executives etc whose livelihoods depends on selling these products for a living. Like you and me, they also have children going to school, parents to support, mortgages to pay etc...so please dont blame them for hard selling a financial product..its their job..if you are not comfortable, just walk away. really,..you really have a choice to just walk away.

i walked away many times.

cheers.

raymond; November 20, 2008 8:39 AM
Anonymous said...: Yes, buying any insurance is to buy a peace of mind, knowing that our loved ones will get some financial help should we pass on.

Jasmin; November 20, 2008 11:32 AM
zhummmeng said...: Jasmin,
you are absolutely right but insurance agents only sell you enough to bury yourself.
You know Why?
Insurance agents only sell products that will benefit themselves with high commission so that they can qualify for mdrt or incentive trips.
What products can meet their own goals? of course those expensive wholelife and endowment products.
The question to ask is can these products meet your goals. Yes but not beyond paying the funeral bills. You see , the insurance agents had not and will never think of your goals first.
Do You know averagely Singaporeans are insured? only $100K when averagely they need $500K. (MAS's finding)This is just one need.
All along insurance agents are like the RMs in the banks pushing products to meet their own goals and disregard the interest of the customers. Just think about about it. Can everyone afford enough wholelife products to adequately meet their needs? NO!!!!!There are so many needs.Meeting dependents' need is one of the many. You have other competing needs to be met from your LIMITED income. Are there alternatives, cheaper efficceint and more effective ways to meet your needs? YES!! but they pay the insurance agents low commission. Do insurance agents care? Do they know in the first place?
Have they conducted need analysis for you before recommending the WL products? Like the RMs in the banks they don't.
Do you know the consequences?
You will end up having a 'minibomb' too. Your 'minibomb' is the bread winner didn't leave you enough to see the family he left behind through life. And like the RMs it is because the insurance agents push WL products without considering your needs.
Your right to responsible and competent advice is important. If they fail you, you have the right to legal recourse.
Always avoid insurance agents, the salesmen, the wolves disguised as financial, senior or executive consultants.
Engage one who is honest and competent with the right qualifications. Don't use one that comes along. Check them. Get referrals. It serves you well to do your due diligence.; November 20, 2008 1:52 PM
Anonymous said...: I think I better put my name, Ed. I'm annon 255pm.

To Rex:

I do know of the deductibles and co-insurance. My thinking was that if you bought a medical insurance, all you want is a peace of mind which covers you for catastrophic events. I don't really know how you did the calculation for the claims (hypothetically). Another point to note is that there are individual sub-limits to the type of procedures that you can claim for medishield, while private shield plans are as charged. So you don't have to worry about inflation in medical costs in future.

I personally has a Aviva Myshield Plan 2 (coz I don't intend to stay in A ward should I have to stay in hospital). I've purchased other private medical insurance (not shield plans) to cover the deductibles and co-insurance portion. I did my own share of homework already, as in shopping for the best deal. So when you say that it costs more for my way of avoiding risks, all I can say is that I may not be getting the cheapest deal in town. However, I'm quite sure that in case of hospitalization, I'll be covered pretty sufficiently.

Another major point is that it's better for an individual to insure themselves for a high lifetime amount for shield plans, as it's easier to downgrade than upgrade in future (due to claims). Furthermore, I'm using Medisave to pay for my shield plans, money which I can't really touch anyway. Might as well use them to purchase a better shield plan. I use cash to pay for the insurance to cover the deductibles and co-insurance.

Rex, do kindly post your excel calculations here. We'll have a good discussion here. What we want is sharing of information. I may be mis-informed or vice versa. So would definitely appreciate it if you could send it to Mr Tan to be posted here.

Cheers
Ed; November 20, 2008 4:59 PM
Anonymous said...: Hi Rex,

I forgot to raise another important point. The life time limit for basic medishield is only 200,000 and 50,000 for yearly limit. So if your charges for medical expenses exceed 50,000 any given year, you're not able to claim the excess for that. Private plans has higher yearly and lifetime limit.

As for private medical shield plans.....all you have to pay is the deductibles and co-insurance.

Let me use an example to illustrate this point....

Suppose you spend 100,000 for medical expense (hospitalization) in a given year. Calculations based on B2 ward would be as :

Private Medical Plans :
Deductibles : 2000
Co-insurance : (100,000 - 2,000) x 0.10 = 9,800
Insurance : As Charged = 100,000 - 11,800 = 88,200

So you pay 11,800 (deductibles and co-insurance) while you can submit a claim for 88,200

I'm can't find the basic medishield deductibles, but you can clearly see that the annual limit isn't enuf to claim up to 88,200. You might argue that you will never incur 100,000 worth of medical expense. Well, that's debatable and my question to you is. Why are you buying medical insurance in the first place?

Hope Mr Tan or others could rectify / clarify my calculations if i'm wrong there.

Cheers
Ed; November 20, 2008 5:11 PM
Anonymous said...: Re: Medishield.. and Ed's comment.

First i must state that my source of information on basic Medishield is http://mycpf.cpf.gov.sg/CPF/Templates/MyCPF_Template.aspx?NRMODE=Published&NRORIGINALURL=%2fCPF%2fmy-cpf%2fHealthcare%2fPvdHC3%2ehtm&NRNODEGUID=%7b2562D1D0-1A35-4330-B06A-9025D7E8D99F%7d&NRCACHEHINT=Guest#medishield

I checked several times and even used a search check. There seems no mention that Medishield pays up to only $50,000 each year, if this is the case my earlier posting and conclusions may be erroneous not a fault of mine though.

So since i did not have this information, my calculation of a 100,000 hospital bill claim B2 and above ward, is as follows:
Deductible $1500
Coinsurance 20% ($300)+15%($300)+10% on balance ($9500)
Cash self pay total $11,600
Medishield $88,400
As you can see the private plan which you selected pays $88,200 which is less. So i concluded that it is wasting money to go for the enhanced private plan. I made similar calculation for all hypotehical cases of hospitalisation costs in increments of 10000 and always basic MEdishield pays better.

My calculations would be wrong if there is a limit of 50000 each year, blame the CPF web site which did not carry this information.

My calculations may be wrong a second time because i seem to be gettting some inputs that if B2 and above ward is selected, before even the deductibles are accounted, a large chunk of the hospital bill is first declared unclaimable in basic medishield. Again, i could not find precise data in CPF web site regarding the size of said chunk!!! so i calculated the claimable amount as set forth above.

With so many new inputs, which are not included in the description in CPF website, i may have to re-do the calculations.

But first where did you find the statement that claims only up to 50,000 in basic Medishiled?. Secondly if stay in B2 and above ward, what percent is shaved off first before claiming? I just simply cannot locate such information on the CPF site.... this information is absolutely critical to evaluate whether it is a worthwhile proposition to go for the enhanced plans.
There is a need to simplify the calculations. I will go for the enhanced plans if someone can prove it more worthwhile.

REX; November 20, 2008 8:27 PM
Anonymous said...: Hi Rex,

the link is here. http://ask-us.cpf.gov.sg/Home/Hybrid/themes/CPF/Uploads/Healthcare/MSH_Table_A.pdf

As you can see from the table. There are many sub-limits for each type of treatment. Sometimes, it may not be enough to cover certain procedures. To make the matter worse, CPF medisave has a daily withdrawal limit. Therefore my personal belief is to get the best private medical shield plan that is within my budget. By suggesting to everyone that just get cpf medishield is sufficient could be disatrous should anyone be so unlucky to incur a huge bill.

In light of the new information, maybe you could consider upgrading your plan to a private shield plan if you could. Just in case. Better safe than sorry. My father passed away many years ago without medical insurance and I know it's a huge strain on the family. Do get sufficient medical coverage.

Cheers
Ed; November 20, 2008 11:07 PM
Anonymous said...: It appears that the link doesn't link to the chart. Try this method....

Type "Benefit Medishield" under search function at cpf.gov.sg. Then click under the first link, "what are the benefits under Medishield". You should be able to get the Chart on the limits that I was referring to.

Cheers
Ed; November 21, 2008 12:43 AM
Anonymous said...: Re Medishield and Postings of Ed 11:07 12:43

Yes i found it at last. It is unbelieveble, the CPF website buried the information on the "50000 limit per year" in the Table attachment. This important information should be clearly stated on the first page of the write-up on Medishield!
Next, I would like to know suppose I stay in government class A ward and incur $50,000. Is it true that by virtue of the fact that it is A-class ward, I can submit only a lower figure for claim? The CPF website said that if stay in B2 and above ward medishield pay only small part of the costs, but i cannot find the information on how to calculate. This is crucial to understanding how well the standard medishield compares with the enhanced plans.
REX; November 21, 2008 9:36 AM
Anonymous said...: Hello again
After sending the earlier posting i checked once more in cpf site and finally found that if I stay in B2 and above ward, normal medishield support only 35% of the charges. That means if class A-ward charges is 50000 then the bill is seen as $17,500 only. Then i have to pay on my own, the deductible and coinsurance several thousands. I will end up paying around 70% or more in cash in total.
Finally i am convinced. The conclusion is as follows:
If you want to enjoy B2 and above ward or private hospital services, MUST buy private medishield plans.
If you don't mind B2 and below ward, BUT think that you will incur more than 50000 a year hospitalisation, then also, MUST buy private medishield plans.
With this conclusion, i would like to suggest to everybody here, please completely ignore all my earlier posts and damnation of the "enhanced" plans. I apologise for the confusion, but then again, i calculated using data from cPF website which did not clearly put certain numbers on the opening pages, and it wasnt easy to find out till Ed came to the rescue. Thanks Ed.

I also agree with Ed that since Medisave cpf money can be used to pay the premiums, there is NO reason for anyone not to upgrade to private plans. Especailly if you already have about 30000 in the Medisave account. I understand that the cpf 4% interest is enuff to pay up most if not all of the enhanced Medishield premium! GO FOR IT!!!
Good health to one and all!
REX; November 21, 2008 10:04 AM
Anonymous said...: Hi Rex,

Thanks for following it up with the CPF board. So people, please try to get the best available shield plans out on the market that is within your budget. Coz we all know that our Gahmen expects us to be responsible for our own medical bills and health.

Do check out the various private insurers for their coverage. Just to share with you guys my plans, I gotten Aviva Myshield Plan 2 (subjected to a pro-rated claim limit if i stay Ward A / Private hospital) It's only fair I think coz I'm paying cheaper premiums. To cover my deductibles and co-insurance, I've gotten AXA prime care. It pays out cash.....hehe...which means....you can use CPF medisave to pay for the deductibles and co-insurance (subjected to daily withdrawal limit on medisave). You have more freedom or discretion on how to use that sum of money.

One Last point, get a good medical coverage when you're young and healthy. Don't delay till you have ailments and other conditions. The insurers will either reject (very bad, coz all other insurance companies will just look at the declaration form in future and reject too, don't even need to consider) or exclude a lot of stuffs. Stay healthy everyone.

Cheers
Ed; November 21, 2008 1:45 PM
Anonymous said...: This prove to be really a very informative discussion, and I hope everyone of you gained from it.

The basic medishield plan is pretty limited, with deductibles and co-payment involved.

That's why I opt for a private medical plan where I can purchase a rider to cover the deductibles and co-insurance.

Each of us have to know what we need before committing our hard earned monies on anything, be it financial products, insurance or other life's daily necessities.

Always remember the following 3 wants;

1. Need to have
2. Good to have
3. Nice to have.; November 22, 2008 9:54 AM
Anonymous said...: I looked at the discussion on this blog as if it is a public forum... shouldn't you all give a little face to the host?

Why Mr. Tan recommends Medishield is the best?

Confused; November 22, 2008 9:59 PM
Anonymous said...: The postion of Mr tan was very clear when he recommended to the writer of the orignal post who is losing his job. Mr tan suggested that in such case, there is no need to upgrade to enhanced plans. I had the same conclusion in a way, that if anyone is NOT expecting to spend more than $50,000 in hospitalisation costs each year , and is content with B2 and below ward, the normal Medishield cover would be adequate (It will pay between 50 to 86% according to my calculations. Depend on the actual bill incurred.. the higher the bill the more the insurance co. pays). So Mr tan's advice is same in this respect.
However my analysis goes one further step, which is, "if you have sufficient Medisave savings in CPF to pay premiums, and you think you might fall sick some day and spend more than $50,000 hospitalisation costs, and if you prefer better than B2 ward, it is obviously economical to upgrade to enhanced plans".
The advice is meant for different types of situation and in no way is there any conflict. Each person must make his own judgement, according to his means and his risk assessment, just like Investment. After all, once the premiums are paid, it is gone forever. If you remain healthy in your whole life, then one can consider it is a bad investment. But who knows when you fall sick. It is a choice one must ultimately make himself/herself.

REX; November 23, 2008 7:58 AM
Anonymous said...: Enhanced medishield though u need to pay the deductibles and the coinsurance before you can make any claims... For example a hospitalization fee of $100000, you need to pay a deductible of $3000 and a coinsurance of $9700. Which is you need to pay out $12,700 before the insurer pays the rest of $87,300.

However, if you guys add on the rider (which is few hundred dollars per year), the amount you need to pay drops to as low as only $2000.

Furthermore by adding on the rider, you can get to enjoy hospital cash benefit. That is if your plan entitles you to a A1 ward, but you choose to say in a B2 ward, the insurer will pay you a sum of money instead, because of the fact that you chose to stay in a ward of a lower level.

It is worth upgrading to enhanced medishield plan because it pays using your medisave. Further more its only few hundred dollars per year.. it is a worthwhile investment.; December 14, 2008 10:22 AM
Anonymous said...: In my opinion,

If you are a Singaporean Citizen, and trust the ruling party to do what is good for the nation.

Whatever the government could approve will be reasonably within the budget and for the benefit of the people here. We are a small country, there's no reason why the govt were to 'Sabo' us and side with insurance company or even agents to buy some useless products.

Anyway, I notice most of the materials in this blog is very lopsided and not very fair to agents. Whole life, endowment , ilps have their place and purpose.

People who comdemm agents I don't blame them. Perhaps they have a bad experience. But I have also seen good agents around who are dedicated to service.; July 14, 2009 2:57 PM
Anonymous said...: since when the deductible + coninsurance is higher for enhanced medishield? they are all the same according to ward types. Furhtermore, the coinsurance is higher for basic medishield. enahanced medishield has a flat 10% coinsurance
http://ask-us.cpf.gov.sg/Home/Hybrid/themes/CPF/Uploads/Healthcare/General%20Information%20on%20MSH.pdf; August 20, 2009 12:39 PM

Wednesday, November 19, 2008

CPF Medishield

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