Taking the right dose of health insurance

Tag : titanium rods

By Lorna Tan, Finance Correspondent
It is often said that we lose our health making money, and thenlose our money to restore our health.
My take on that is: Not if you have adequate medical insurance.
My 68-year-old mother was recently hospitalised for surgery at theNational University Hospital (NUH) and the bill came to a cool$28,000. My family, however, did not have to fork out a singlecent. My mother has an Enhanced Incomeshield hospitalisation plan,as well as a 'Plus rider', which covers the deductible andco-insurance portions of the bill. (We will address these twofeatures later.)
Prior to the surgery, my mum was, for weeks, complaining of hip andleg pain when she stood or tried to walk for more than the distancebetween two bus stops. She was diagnosed with degenerativespondylolisthesis, a condition that disproportionately affectsindividuals over age 65. In other words, she was suffering from adegeneration of some sections of her spine.
Spinal fusion surgery was recommended and, on April 29, sheunderwent a five-hour operation at NUH. In all, she washospitalised for five days in a Class A1 ward.
Private Shield plans
In case you have not heard, it is possible to be hospitalised andnot have to pay a single cent from your pocket or Medisave account.Welcome to the wonderful world of private Shield plans.
These are hospitalisation plans offered by insurers that can befunded from one's Medisave, subject to an annual cap of $800.
Here are the two major pluses of such a plan:
# Lifetime cover: Most private Shield plans offer lifetime cover,whereas MediShield cover ceases when one turns 85.
# As-charged feature: Almost all private Shield plans offer thisfeature, which removes the benefit limits on the amount that can beclaimed each day for hospital stay and procedures. This meanshospitalisation expenses will be paid according to what is billed.
In contrast, traditional plans come with specific sub-limits, suchas specified dollar benefits for room and board. Of course, you arestill subject to the plan's deductible and co-insurance (unless youhave a rider), and annual limits.
What then, is an appropriate level of cover?
It's quite simple. Buy a plan that matches your health-careexpectations, provided you can afford the premiums. So, if youexpect to stay in a class B1 ward, then buy a hospital plan with B1coverage.
In my mother's case, her plan is an Enhanced Incomeshield Advantageplan, which means it covers Class A wards ofgovernment/restructured hospitals such as NUH. She could have optedto be hospitalised at a private hospital, but her insurer, NTUCIncome, would then pay up to 65 per cent only of thehospitalisation bill.
Bear in mind that premiums rise as you age. So, it is important toensure that you have sufficient money to fund future premiums so asto prevent policies from lapsing.
I believe it is wiser to buy a higher-class plan now while I canafford it, with a view to downgrading to a lower plan when I amolder and premiums are higher.
All Shield plans come with deductible and co-insurance features.The former refers to the first layer of charges that thepolicyholder has to bear. Depending on the type of plan, thedeductible is typically about $2,000 to $3,000.
The co-insurance feature means that the policyholder shares part ofthe cost of the bill, usually 10 per cent over and above thedeductible.
Some insurers provide 'riders' that cover either one or the otherfeature. You can use only cash to pay the premiums. In the case ofIncome, it no longer offers the 'Plus rider' to new policyholders.In its place is the 'Assist rider', which covers the deductible.This leaves the policyholder to foot the co-insurance portion,which is capped at a specified amount depending on the type ofShield plan.
In the case of my mother's Incomeshield, it also covers the costsincurred during her outpatient visits to the hospital three monthsbefore and after the hospitalisation.
Buying peace of mind
Many people hold off buying private Shield plans because theybelieve that they are adequately covered by their employers. That'sa very short-sighted view. Such covers are usually not portable,and there will come a day when you will leave your employer. Also,as you grow older, you may develop medical conditions and it isvery difficult to find an insurer who will cover you once you havethem.
So, insure yourself adequately while you are still healthy. Mywhole family, including my two children, are insured with privateShield plans.
My daughter now calls my mother 'bionic grandma' because sixtitanium screws and three rods have been permanently implanted inher to stabilise her spine.
Bionic or not, having the right dose of health insurance certainlypays off, and it is small change when we consider the peace of mindit provides.
lorna@sph.com.sg
This article was first published in The Straits Times on July 20,2008.