We believe what most people know about CPF is that it consists of Ordinary Account, Special Account and Medisave account. Out of these 3, Medisave seems to be the only one that you cannot withdraw, use or seemingly locked into obscurity.
However, one major feature of CPF is its health coverage. While Medisave is more commonly known, MediShield can be extremely important in personal financial planning and it now packs a punch after a recent upgrade from 2015 forming MediShield Life.
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Medishield Life Singapore
In short, MediShield Life is a basic health insurance curated by CPF. From further analysis, the coverage is definitely more than just basic.
| Daily Ward and Treatment Charges | MediShield Life | Comparison Insurance Rider with MediShield Life |
|---|---|---|
| $700 / day | As Charged |
| $1,200 / day | As Charged |
| $350 / day | As Charged |
| $100 / day | Max $3,500 |
| Surgical Procedures | $7,000 / treatment | As Charged |
| Radiosurgery | $200 – $2,000 | As Charged |
| Chemotherapy for Cancer | $3,000 / month | As Charged |
Radiotherapy for Cancer
| $140 / month$500 / month | As Charged |
| Kidney Dialysis | $1,000 / month | – |
| Immunosuppressant for Organ Transplant | $200 / month | As Charged |
| Erythropoietin for Chronic Kidney Failure | $200 / month | – |
| Per policy year | $100,000 | $300,000 |
| Lifetime | No limit | No limit |
| Maximum coverage age | No maximum age | No maximum age |
| Estimated annual premium for 25 years old | $195 | $263 |
Cost Considerations
The average cost per day of medical specialties is about $582 to $836 for Class B2 wards. Total average bill is about $1296 to $3718 for Class B2 ward. In addition, the top 5 causes of hospitalization are an accident, poisoning, and violence, cancer, heart diseases, intestinal infectious disease, and pneumonia. If we investigate the average cost of each illness, from personal experience, the cost of cancer can easily go upwards from $200,000 onwards depending on the stage that it is discovered.
This does not even include the high chance of relapse for some common cancer such as breast cancer. Out of the common illnesses, cancer will constitute the illness with the highest cost. A MediShield Life with additional rider will be likely to cover a large proportion of costs but CPF MediShield Life is definitely insufficient.
After an investigation, the medical costs of other 4 common causes can be covered by the upper limit of insurance inclusive of the rider, within a policy year. CPF MediShield Life’s $100,000 coverage limit per policy life is likely to be insufficient but will cover a large proportion of the costs incurred.
You can find out more using this link from MOH to have a rough gauge on the medical costs for each illness depending on each ward class: https://www.moh.gov.sg/content/moh_web/home/costs_and_financing/hospital-charges/Total-Hospital-Bills-By-condition-procedure.html
MediShield Life provides universal coverage for all Singaporean citizens and Permanent Residents, even those with pre-existing conditions. However, it is subjected to higher premiums for 10 years. It is common to exclude pre-existing conditions under the insurance coverage. This means that MediShield Life provides better coverage per costs where there are even subsidies provided to offset these premium increases.
Comfort Considerations
Besides the considering the huge medical costs that will be incurred, one also needs to evaluate comfort options. The average prices provided above are for Class B2 wards and common treatment charges. If you wish to adopt bespoke medical treatment or opt for better hospital wards, the medical costs will also increase.
Conclusion
A 2012 study by Life Insurance Association Singapore found that working Singaporeans and Permanent Residents are collectively under-insured by $462 billion. With medical costs estimated to increase by 15% year-on-year, it is critical to have sufficient coverage to transfer such health risks via insurance. This will be a crucial decision especially when the insurance premiums are recurring.
It does not help that insurance agents’ commission are not in line with the client’s interest, but that is another topic itself. It is also even more important to be educated on how much and what you should consider before purchasing insurance as no one else will know your situation better than you. Having the knowledge of how MediShield Life can augment this coverage will definitely put you in a better position.
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