Things You Need To Know About Integrated Shield Plan

Integrated Shield Plans (IPs, in short) are perhaps the most popular type of insurance products in Singapore. According to statistics released by the Life Insurance Association (LIA) in Febuary 2020, approximately 69 per cent of all Singapore residents are protected by IPs and riders. Still, many are unsure what exactly IPs cover and have little clue when it comes to choosing an IP product for themselves or their family. 

In this article, we seek to provide you with a comprehensive understanding of this type of insurance plan. We start with the basic MediShield Life, which is implemented by the CPF Board for all Singaporeans and PRs and forms the foundation of all Integrated Shield Plans. We then move on to talk about IP products in the market, what coverage they provide on top of MediShield Life, and some important considerations when choosing among all the IP insurers.

1. MediShield Life: The Foundation

As most of us should know, MediShield Life is a compulsory health insurance scheme introduced and admininstered by the CPF Board. Its purpose is to help Singaporeans and Permanent Residents alleviate the burden of large hospital bills. 

Within an annual claim limit of $150k, MediShield Life pays for our hospitalisation and surgery costs as well as selected costly outpatient treatments, pegged at B2 or C wards at restructured hospitals. 

The CPF Board website provides a very clear and comprehensive introduction to the MediShield Life scheme. Hence, we will not delve into all the details here. 

Still, there are certain aspects about MediShield Life that are worth highlighting for our attention.

(1) Intended for social welfare, MediShield Life places no restrictions on the age or health status of the insured. In other words, the coverage under MediShield Life continues for lifetime and extends to people who may already have a serious medical condition. This is perhaps the greatest advantage that MediShield Life has over any other commercial health insurance plans.

(2) MediShield Life only covers Singapore citizens and PRs, while foreigners residing in Singapore are not protected. For PRs, the amount of coverage they get to enjoy is also far lower than that for Singapore citizens. For example, 100% of the expenses incurred by Singaporeans staying in class B2 or C wards in restructured hospitals are covered by MediShield Life, while only about half the expenses is covered for PRs staying in the same class wards. 

(3) As MediShield Life is pegged at B2 and C wards of restructed hospitals, one must still pay a large proportion of the bill if stayed in a higher-class ward at a restructured hospital or was treated in a private hospital. Specifically, only 43% of the bill is covered if a Singaporean received treatment in a restructured hospital B1 ward. That percentage drops further to only 25% in a private hospital. Despite that, we still go to private hospitals sometimes, simply because we just couldn't stand waiting for the long queue at a restructured hospital before we get treated.

Because of these limitations, a private health insurance plan becomes important. For the foreigners residing in Singapore, it is often the only way they get covered for large medical expenses. For Singaporeans and PRs, it helps to fill the protection gap of MediShield Life and give us more options when illnesses do strike.

2. Integrated Shield Plan: Enhanced Medical Coverage

Integrated Shield Plans are the most popular choice in Singapore when it comes to enhancing our medical coverage with private insurers. 

An Integrated Shield Plan usually consists of 3 parts:

• The basic MediShield Life portion provided by the CPF Board
• Additional coverage provided by insurance companies - mostly to cover for expenses incurred at higher class wards in restructured hospitals or in private hospitals
• A rider provided by insurance companies - to further reduce our out-of-pocket expenses (i.e. deductible and co-insurance)

Like the basic MediShield Life, Integrated Shield Plans also mainly cover us for hospitalisation and surgery as well as some expensive outpatient treatments. 

An Integrated Shield Plan enhances MediShield Life mainly in the following aspects:

• Covers us for higher-class ward expenses, i.e. class B1/A ward in restructured hospital and private hospital.
• Significantly increases the annual claim limit up to 1.5 to 2 million and lifts the individual claim limits of most types of treatments.
• Covers additional types of medical treatments, mostly including but not limited to:

• Pre and post-hospitalisation treatments within a certain number of days
• Some recently developed treatment methods, such as immunotherapy for cancer, proton beam therapy, cell/tissue/gene therapy, etc.
• Pregnancy and delivery-related complications
• Organ and stem cell transplant
• Emergency overseas treatment

• Further reduces out-of-pocket expenses by adding a Rider to the plan. Currently, most riders allow patients to co-pay only 5% of the total bill, up to a maximum amount of $3,000 per policy year, if treated by panel doctor and/or with pre-authorisation.

Lastly, an IP is no longer limited to Singaporeans and PRs, but available to foreigners holding long-term pass in Singapore as well.

3. Some Considerations When Choosing Your IP Insurer

Currently, 7 insurers offer Integrated Shield Plans in the market, including NTUC Income, AIA, Great Eastern, Aviva, Prudential, AXA and Raffles. 

When deciding which insurer to get yourself covered with, certain aspects are worth considering.

A. Premium pricing

Although the IPs offered by different insurers differ slightly from one another, it is fair to say that the core coverage of all of them are essentially the same. As such, whichever has the lowest premium is also the most cost-efficient.

As we tend to renew our IP plans until very old age, it is also important to compare the premium rates at older ages besides our current age.

B. Standard of service

The standard of service of an insurance company is also important, as the chance of us doing a hospitalisation or surgery claim is far greater than us claiming for critical illness or death. 

From our experience, most insurers in Singapore provide quite decent services, making claiming experiences generally smooth and convenient. Still, some insurer is far more inferior in this aspect, making every claim a pain for both their clients and servicing agents.

C. Presence of claims-based pricing

Claims-based pricing refers to the practice of insurers raising premium rates in subsequent years for clients who have filed claims in the current year. Most IP insurers in Singapore do not practice claims-based pricing. Still, there are insurers doing that.

Personally, I feel claims-based pricing for health insurance is unfounded. Unlike motor insurance where a lot of the claims arise from the insured's negligence, illnesses happen beyond our control. It does not make sense to penalize clients for things they cannot control and for enjoying the benefits they are entitled to enjoy when buying an insurance plan.

Considering to buy an Integrated Shield Plan, or switching to another IP insurer? Contact us for a detailed comparison of products and valuable industry insights!