atans1

Integrated Shield Plans? Waste of money? Cont’d

In CPF, Financial competency, Financial planning on 19/08/2014 at 4:30 am
When TRE republished my piece on S’pore overinsuring their healthcare that pointed out, But seven in 10 armed with IPs that target Class A wards in public hospitals chose to stay in lower ward classes when hospitalised. Only one in 10 from the same group chose private hospitals.Echoing a similar trend were those with IPs that target private hospitals – six in 10 chose lower ward classes in public hospitals. The committee noted twice in its report that many Singaporeans want medical treatment beyond that provided in Class B2/C wards but have “over-stretched themselves to buy the most expensive product for higher protection”.,
two responses stood out, one rubbishy (but which I suspect explains why many gold plate and gem encrust their Medishield plans) and the other sensible.
But both imply that because the money’s there in the Medisave a/c so spend it leh (a major point of my piece was that the ltd uses of Medisave “encouraged” gold plating and gem encrusting medical insurance. Btw, an actuary tells me that insurers don’t really make much money from such plans, but admits that it could be because they are inefficient.):
Ace:

This analysis by Cynical Investor is too simplistic. There are many consideration for buying a medical insurance.

In an emergency, for example if you faint at Tanglin Shopping Centre, the nearest hospital is Gleneagles Hospital which is a private hospital. If you are NOT covered under the highest plan and you go to Gleneagles Hospital, you will need to pay much higher out of pocket. You can of course go to SGH where you can be fully reimburse for the charges but it is further away and you may not have the luxury of time in an emergency.

For non-emergency cases, you can plan which hospital to be admitted but the fact is that the waiting time for admission to B2 or C wards for such cases can be as long as up to 9 months. Can you take the pain for so long and do you want to wait?

Hence most people would opt to buy the most expensive plan when they are young since the full premium can be paid by Medisave. When you are older, you can still downgrade to a lower plan if premium is an issue.

Singaporeans are not as stupid as the report make us up to be. We may be Kiasu but we are definitely not DAFT.

 

spiny dogfish:

One reason why people buy the most expensive plans is because of the very rapid escalation of hospitalization costs. That and the fact that the insurer has an obligation to renew your plan but is NOT obligated to allow you to upgrade.
When i bought my first shield plan the benefits were enough for a private hospital. When i got hospitalized this year the benefits had not changed as i had naively not upgraded my plan for years. The benefits were only marginally enough for B1 ward. The benefits do not change but the costs keep rising.
And i was told that had my conditon been a chronic one like say cancer or heart disease, it was possible that should i wish to upgrade my plan i would either suffer loading or that very condition would be excluded. BUT i could renew my plan, no problem.

After that you bet i’ll take the highest plan i can afford. In 5 years who knows what this plan will be good for. Just take it as front loading. The real issue is rising medical costs. Dealing with the insurance is treating the symptoms not the disease.

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  1. No worries lah. Just buy the basic Medishield Life. Whenever PAPies gonna lose the GE, they will rebate back 200% of what you paid. Private IPs you die your business, faster you die better so that insurance companies no need to keep on paying to keep your miserable life. Insurance companies make more profits good for my stock portfolio also.

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