Planning for the Increasing Cost of Healthcare in Singapore

Healthcare in Singapore can be expensive

In 2018, medical inflation in Singapore was 10.0%, according to Mercer Marsh Benefit’s report on 2019 Medical Trends Around the World. This significantly outpaced the headline inflation rate in Singapore, which stood at just 0.4% over the same period.

This spike in the cost of healthcare wasn’t just limited to 2018, with the Ministry of Health (MOH) revealing that private healthcare costs in Singapore has increased 9% year-on-year between 2007 and 2017.

As Singapore continues to grey and advancements in medicine introduces new cutting edge treatments, you can expect to spend incrementally more on healthcare in the future.

Addressing rising healthcare costs

The Singapore government has recognised that escalating healthcare costs in the island-nation needs to be reined in, and has implemented measures to keep costs in check.

In 2018, the government announced that insurers providing Integrated Shield Plans (IP) had to stop offering full riders in response to escalating healthcare claims. Full riders, which cover 100% of a patients private hospital bills, potentially perpetuated a “buffet syndrome” for medical treatments, leading to over-consumption, over-servicing and over-charging. In its place, IPs are now offering co-payment riders, which encourage patients to seek more accountability from healthcare provider on the cost of their treatments.

Also, in 2018, the Ministry of Health introduced a list of fee benchmarks for

Buying a suitable health insurance plan

With increasing life expectancy and rising healthcare costs, health insurance can be one of the most important plans that you can get.  

All Singapore Citizens and Permanent Residents (PRs) enjoy a base level of health insurance coverage through MediShield Life, a lifetime health insurance scheme administered by the CPF Board. You can pay for your MediShield Life premiums from your CPF MediSave Account.

MediShield Life protects you from large hospital bills (pegged at Class B2 and C wards), as well as costly outpatient treatments. You can refer to the full list of benefits on the MOH website.

To receive a more comprehensive level of coverage, at Class A/B1 wards in public hospitals or private hospitals and for pre- and post-hospitalisation coverage, you can choose to purchase an optional private integrated shield plan (IP) from private insurers such as AXA Shield.

Going beyond shield plans

Besides MediShield Life and Integrated Shield Plans, you can also plug your healthcare protection gap with other forms of health insurance.

1. Critical Illness Plan

In 2018, the Life Insurance Association of Singapore (LIA) found that Singaporeans had a critical illness protection gap of 3.1x their annual salary.

Having this protection gap can be risky. Being diagnosed with a critical illness can rob you of your ability to earn an income from employment to take care of your loved ones at home. At the same time, you will also need to seek potentially costly medical treatments in your fight to recover.

A comprehensive critical illness plan can replace your income, provide additional care for your dependents and give you the financial flexibility to seek the treatments you want.

For instance, AXA Super CritiCare offers our customers a holistic coverage solution, with up to 600% sum assured providing multiple coverages for early, intermediate and advanced stage critical illnesses. Customers also receive a first-in-the-market coverage for re-diagnosed cancers, recurrent heart attacks and multi-stage stroke.

A complimentary Diabetes Care Programme, worth $2,500 a year, helps our customers who are diagnosed with diabetes to manage their health conditions and control diabetes more effectively.

2. Personal Accident Plan

While some minor accidents may not require hospitalisation, you may still incur expensive outpatient treatments such as needing to go for an MRI scan or physiotherapy. In more serious accidents, one may also become temporarily disabled and unable to work after the initial hospitalisation period.

Specifically designed to for cases of accidents, A personal accident (PA) insurance plan can provide y additional protection so that you have peace of mind in the event of an accident which leaves you injured or temporarily disabled. It also covers policyholders for permanent disability or death due to an accident.

A PA plan like AXA Smart PA Protect+ can also be an affordable way to complement integrated shield plans in the event of accidents, as hospital bills arising from accidents are fully reimbursable under a PA plan, as compared to a shield plan where the policyholder will need to co-pay at least 5% under the revised MOH regulations.

3. Health Cash Plan

A health cash plan is another type of plan that can complement your integrated shield plan, by paying a guaranteed daily cash benefit for each day of hospitalisation.

While your hospital bill will likely be covered by integrated shield plans, you can use your cash payouts to put towards any deductibles and co-payments you are required to fork out for your hospitalisation. You can also use the funds for post-recovery treatments and medication not covered by your shield plans.

Protect your health and your financial future

Prioritising your health reduces your chances of falling ill or being diagnosed with a major illness in the first place. As Singaporeans tend to lead busy and hectic lifestyles, you need to make the most of your free time for exercising, eating clean and up-keeping your mental wellness.

At the same time, a comprehensive insurance plan, including complementary policies that protect your healthcare needs, enables you to seek quality medical treatments without having to worry about healthcare costs. This can give you the peace of mind to access the right healthcare and focus on getting well.

At the same time, you also safeguard your loved ones’ financial futures by protecting your income and savings that you have accumulated for them.

Disclaimer:

This article is for general information only and does not take into account the specific investment objectives, financial situation or needs of any particular person. The views expressed herein do not necessarily reflect the views of AXA Insurance Pte Ltd and should not be construed as the provision of advice or making of any recommendation. There is no intention to distribute, or offer to sell, or solicit any offer to purchase any product. We recommend that you seek the advice of a qualified financial advisory professional before making any decision to purchase an insurance or investment product. Whilst we have taken reasonable care to ensure that all information provided was obtained from reliable sources and correct at time of publishing, information may become outdated and opinions may change. We are not liable for any loss that may result from the access or use of the information herein provided.