What's the deal with Deductible and Co-Insurance

Here's the definition of Deductible and Co-Insurance by the Ministry of Health:

Deductible

A deductible is the initial amount you need to pay for claim(s) made in a policy year, before MediShield coverage starts. No reimbursement would be made from the MediShield below this claim amount. You only need to pay the deductible once in a policy year. The deductible helps to sieve out small claims, which can be paid using Medisave and/or cash, and keeps MediShield premiums affordable.

For approved outpatient treatments claimable under MediShield, the deductibles are waived and a 20% co-insurance is applicable. Some examples are outpatient chemotherapy, radiotherapy and kidney dialysis treatment.

If you choose to stay in a Class C ward during your hospitalisation, the applicable deductible would be $1,000. For Class B2 and above wards, the applicable deductible would be $1,500.

Co-insurance

Co-insurance is the percentage of the bill you need to pay on the portion of the bill above the deductible. Co-insurance for inpatient bills is three-tiered, ranging from 20% to 10% as the bill size increases, i.e. the larger your bill, the lower the co-insurance that you need to pay. MediShield will pay between 80% - 90% of the claim amount that exceeds the deductible (if applicable).

Deductible and Co-Insurance Table:

(for outpatient treatment, the deductible is waived and a 20% co-insurance applies)

Deductible (Per Policy Year):

• Class B2 & Above Ward/Day Sugery = $1500
• Class C Ward = $1000

C0-Insurance (amount payable):

Class C Ward

1. 20% is payable from the first $1001 - $3000
   
2. An additional 15% if bills go into the range of $3001 - $5000
3. An additional 10% if bills go into the range of $5001 and above

Class B2 and above Ward

1. 20% is payable from the first $1501 - $3000
2. An additional 15% if bills go into the range of $3001 - $5000
3. An additional 10% if bills go into the range of $5001 and above

*Please also check your Claimable Limits.

Claimable Limits is the portion of your bill that is eligible for reimbursement. Your Claimable Limit, or claim amount, is determined by:

1. The maximum limits per day of hospitalisation
2. Surgical procedures
3. Surgical implants, and
   
4. Approved specific treatments and outpatient treatments.

Deductible and Co-Insurance calculations example:

If you needed to pay a total of $10,000 and you are staying in a C Class Ward:

Deduct the Deductible of $1000 from the total payable amount:

A. $10,000 - $1000 = $9000 balance.

Now you take 20% of the first $2000 of your $9000 balance:

1. $2000 x 20% = $400

Next, you take 15% of the amount up to the next $2000:

2. $2000 x 15% = $300

Finally, you take 10% of the balance $5000:

3. $5000 x 10% = $500

Your total Co-Insurance payable is:

B. $1200 ($400 + $300 + $500)

So the total you needed to pay from your $10,000 bill is:

$2200 (A. $1000 deductible + B. $1200 Co-Insurance).

Pro-ration factors

MediShield is designed to help Singaporeans pay their hospital bills incurred in subsidised Class B2/C wards.

1. Bills from Class A, B1 or B2 wards in restructured hospitals, and private hospitals are pro-rated.
   
2. Those who receive reduced subsidies in B2/C wards will also have their bills pro-rated to the full-subsidy bill size.

*Please use the Calculator provided by the CPF board to calculate exactly how much you need to pay.

Enhanced MediShield payout from December 2008

From 1 December 2008, MediShield benefits will be enhanced to reduce the financial burdens of Singaporeans. The proposed increase in payouts will be up to 80% (currently 60%) at the Class B2/C level.

The withdrawal limit will also be raised for policyholders who are above the age of 80, from $800 to$1150. Singaporeans can use their Medisave to also pay for their dependant's MediShield premiums.

Here are the proposed changes:

1. Revised Claim Limits
2. Basic Medishield Premiums
3. Medisave Top-Up For Elderly

*Medisave/MediShield Claim Calculator

MediShield Yearly PREMIUMS

1 to 30 = $30
31 to 40 = $40
41 to 50 = $80
51 to 60 = $160
61 to 65 = $225
66 to 70 = $265
71 to 73 = $335
74 to 75 = $375
76 to 78 = $420
79 to 80 = $510
81 to 83 = $600
84 to 85# = $705

*Age are based on Next Birthday
#maximum coverage age

The basic Shield plan - MediShield

MediShield is a low cost catastrophic illness insurance scheme. Introduced in 1990, the government designed MediShield to help members meet medical expenses from major illnesses, which could not be sufficiently covered by their Medisave balance. MediShield will cover up to 60% of your large medical bill at the Class B2/C level.

IMPORTANT: A very large medical bill can easily wipe out your Medisave balance, as it is only a savings account. For this reason, you are advised to take up a Private Integrated Shield Plan.

For Singaporeans who plan to use Class B1 or higher ward classes, you may wish to consider purchasing Medisave-approved private Integrated Shield Plans on top of your Medishield. MediShield and other Medisave-approved private Integrated Shield Plans are designed to cater to your different insurance coverage needs.

Summary of MediShield scheme:

• MediShield is a low cost catastrophic illness insurance scheme
• MediShield is operated by the CPF Board.
• Premiums for MediShield can be paid by Medisave
• MediShield operates on a co-payment and deductible system to avoid problems associated with first-dollar, comprehensive insurance. The co-payment and deductibles can be paid using Medisave or cash.

The 3Ms of Government Healthcare

If you cannot remember what type of health financing and coverage you are entitled to as a Singaporean, remember the 3Ms:

Medisave

Medisave, introduced in April 1984, is a national medical savings scheme which helps individuals put aside part of their income into their Medisave Accounts to meet their future personal or immediate family's hospitalization, day surgery and certain outpatient expenses.

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Medishield

MediShield, introduced in 1990, is a low cost catastrophic illness insurance scheme. It is designed to help members meet the medical expenses from major or prolonged illnesses from which their Medisave balance would not be sufficient to cover. MediShield operates on a co-payment and deductible system to avoid the problems associated with first-dollar, comprehensive insurance. The premiums for MediShield is payable by Medisave.

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Medifund

Medifund is an endowment fund set up by the Government in April 1993 to help needy Singaporeans who are unable to pay for their medical expenses. This fund acts as a safety net for those who cannot afford the subsidised bill charges despite Medisave and MediShield coverage. Medifund was established with an initial capital of S$200 million and capital injections will be made when budget surpluses are available. The capital sum currently stands at S$1.48 billion. The interest income from this capital sum are being utilised to finance the needy.

Other forms of government health subsidies:

Eldershield

ElderShield, introduced in June 2002, is an affordable severe disability insurance scheme designed to help Singaporeans meet with expenses incurred in the event of severe disability. The premiums of ElderShield can also be paid with the funds from the individual's Medisave accounts.

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Interim Disability Assistance Programm for the Elderly (IDAPE)

The Interim Disability Assistance Program for the Elderly (IDAPE) scheme provides financial help to those who become disabled. IDAPE caters to Singapore citizens who are not eligible for ElderShield.

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Primary Care Partnership (PCPS)

The Primary Care Partnership Scheme engages private general practitioners (GPs) to provide common outpatient medical services to needy elderly at polyclinic charges.

A quick summary of the Singapore healthcare system

In Singapore, 80% of the healthcare services are taken cared of by the government. Singapore patients can enjoy up to 80% subsidies if they choose to be warded in Class B/C.

The Singapore government assist locals on healthcare expenses through a compulsory form of savings call Medisave. A portion of an employee's monthly salary is contributed to funding their Medisave account.

Below is the latest contribution rates (% of salary) by an employee based on their age:

Age 35 and below = 6.5%
Age above 35 to 45 = 7.5%
Age above 45 to 60 = 8.5%
Age above 60 = 9%

* Additional information taken from the Ministry of Health:

Contributions to the Medisave Account will be subjected to a Medisave Contribution Ceiling (MCC), which is the maximum balance a member may have in his Medisave Account. The current MCC is set at $34,500 (wef 1 Jul 08).

Any Medisave contribution in excess of the prevailing MCC will be transferred to the Special Account for members below 55 years. For members aged 55 years and above, Medisave Account overflows will be transferred to their Retirement Account (RA) to top-up any Minimum Sum shortfall. Once the Required Amount has been topped up to cover any Minimum Sum shortfall, Medisave Account overflows would go into their Ordinary Account.

When a member withdraw his Medisave at or after age 55, he needs to set aside a minimum of $29,500 in his Medisave account (wef 1 Jul 08) or the actual Medisave account balance, whichever is lower, as the Medisave Minimum Sum (MMS). He will be able to withdraw the amount that is in excess of this minimum sum.

Contributions for Self-Employed

Only Self-Employed persons earning $6000 and above in the previous year needs to contribute to their Medisave account. Information for self-employed contributions can be found here.