Wednesday, April 7, 2010

MediShield Upgrade Comparison


Ward Selection for MediShield

UPDATE (31 Jan 2014): I have been very busy recently due to work commitment. Surprisingly, this file has more than 7,000 over download. I hope to update this in view of the recent talk about the pioneer package. Stay tuned.... and thanks again for your support.


UPDATE (18 Jul 2011): Thanks for your support. Near to 700 have downloaded and use this excel file to better their health plan. I welcome any constructive suggestions to better this file for future reference.

After posting the excel file (version 11), let's see what MediShield covers.
We shall compare the following scenarios below. You can punch in the data in the excel file to derive the same results.
Scenario
1
2
3
4
5
Room and Board (R&B)
24,200
24,200
24,200
24200
5,200
ICU
1,800
1,800
1,800
1800
0
Day Surgery
728
728
728
728
0
Implant
0
0
0
0
0
Days in R&B
52
52
52
52
5
Days in ICU
2
2
2
2
0
Total Hospital Bill
26728
26728
26728
6300
5200
Ward Chosen
C
B2
B1
A
B2
Age
50
50
50
50
50
Insurance pays
21885.2 or 81.88%
21735.2 or 81.32%
8336 or 31.19%
6914 or 25.87%
600 or 11.54%
You pays
4842.8
4992.8
18392
19814
4600


If you have only MediShield, staying in Ward B2 or C has its merits. This is an ideal case to show CPF MediShield can pays for 80% as intended.
Choosing Ward B1 or A will dramatically blow up your medical expenses as illustrated in scenario 3 and 4 respectively.
But wait a minute, how many of us spend 52 days in hospital?
A more realistic case is Scenario 5 whereby minor accident happens to us. Your feet swells without your permission and you stay only 5 days in hospital and the bill is only S$5,200 with no surgical operations. Now, you will be paying S$4,600 or 89% of the bill under MediShield. If luck is not on your side and you visit a hospital every 5 years, your MediSave savings will be easily depleted before you reach 80. When this happens, many suddenly realized that MediShield is insufficient and need a private plan to fill in the gap. Since private insurance excludes previous medical conditions, you will not be paid for heart related conditions if you have heart problem before you buy the private policy. Therefore it is imperative to buy the insurance before you develop any illnesses since most are guaranteed for renewal without questions. This is especially true because MediShield expects you to die before 86 as you have ZERO coverage when you are 86. Else, it ensures you die poor if you live beyond 86 because you will pay 100% of the medical bills.

An Ideal Private Insurance Plan

From my earlier blog, statistics showed that private insurance companies pay S$22 out of S$100 premium collected while CPF MediShield pays S$53 out of S$100. Claiming insurance may be one of the factors as there are many limitations and constraints especially the micro clauses in the contract dealing with historical medical conditions. But since MediShield has its weaknesses, you would like to maximize your money on a policy that pays the most and covers better than MediShield.
For full coverage (ie. zero payment), the premiums are expensive especially when you grow older. We have to access if we are able to afford the premium because it costs only $42/year when you are young but $7000/year if you are old. Without income after retirement, can you afford to pay the premium at old age? Many jump into buying policies that benefit them in the short term and forget that the premiums are much higher when they are old.
So the criteria for private Insurance are:
  1. It should be better than MediShield;
  2. It should pay most of the medical bills;
  3. In case of hospitalization, the insurance payout should be substantially higher against the premiums paid over the years (remember ROI?); and
  4. The policy should be affordable till old age.

Case 1 – Long Stay in hospital

Using the same scenario as above, MediShield (Ward C) shall be the benchmark.
Scenario
CPF MediShield
GE SupremeShield B Plus
GE SupremeShield B Plus
Room and Board (R&B)
24,200
24,200
24,200
ICU
1,800
1,800
1,800
Day Surgery
728
728
728
Implant
0
0
0
Days in R&B
52
52
52
Days in ICU
2
2
2
Total Hospital Bill
26728
26728
26728
Ward Chosen
C
C
B1
Age
50
50
50
Deductible
1000
1000
2000
Co-Insurance
3042.8
2572.8
2472.8
Insurance pays
21885.2 or 81.88%
23155.2 or 86.63%
22255.2 or 83.27%
You pays
4842.8
3572.8
4472.8
Years policy is valid
10
10
10
Claims/Premiums
18.33
9.82
9.44


With Great Eastern Supreme Shield B Plus, it covers more for the same Ward C plan. Even if you upgrade to Ward B1, the medical bill foot by you is still lower than CPF MediShield.
If the policy is enforced for the last 10 years (or you have paid 10 years of premiums), the Claims/Premiums ratio will reveal the value of this policy. With lower premium and less coverage, MediShield has a score of 18.33. It implies that the medical claim covers the insurance premiums for the last 18.33 years. For GE Supreme Shield B Plus, both are near to 10 so it implies GE earns little from you.
We conclude that private insurance has its merits for long term hospital stay as it provides better coverage than MediShield. However, we need to compare the various plans to suit personal needs. You can now do so with the excel file.

Case 2 – Short stay in hospital

As illustrated above, MediShield is weak in pure R&B charges. Let's see how private insurances fare.
Scenario
CPF MediShield
AIA HealthShield Gold Elite
Aviva MyShield Plan 3
Room and Board (R&B)
5,200
5,200
5,200
ICU
0
0
0
Day Surgery
0
0
0
Implant
0
0
0
Days in R&B
5
5
5
Days in ICU
0
0
0
Total Hospital Bill
5200
5200
5200
Ward Chosen
B2
B2
B2
Age
50
50
50
Deductible
1500
1500
1500
Co-Insurance
150
370
370
Insurance pays
600 or 11.54%
3330 or 64.04%
3330 or 64.04%
You pays
4600
1870
1870
Years policy is valid
10
10
10
Claims/Premiums
0.5
0.75
1.53


Both AIA HealthShield Gold Elite and Aviva MyShield Plan 3 offer to pay 64.04% of the bill compared to MediShield's 11.54%. Now, with the Claims/Premium ratio, ceteris paribus, we see that Aviva MyShield Plan 3 is better than AIA HealthShield Gold Elite due to lower premiums.

Case 3 – Typical Surgical mid-term stay

Let's consider a case study of a mid-term stay with coronary artery bypass graft surgery (Example from Prudential website).
Scenario
CPF MediShield
Prudential PRUshield A+
NTUC Enhanced IncomeShield Basic + ASSIST rider
Room and Board (R&B)
5870
5870
5870
ICU
1630
1630
1630
Day Surgery
9000
9000
9000
Implant
2400
2400
2400
Days in R&B
7
7
7
Days in ICU
2
2
2
Total Hospital Bill
18900
18900
18900
Ward Chosen
B2
B2
B2
Age
52
52
52
Deductible
1500
1500
1500
Co-Insurance
369.75
1740
1690
Insurance pays
5726 or 30.3%
15660 or 82.86%
17010 or 90%
You pays
13174
3240
1890
Years policy is valid
10
10
10
Claims/Premiums
10.86
4.56
4.17


Private insurances always place their example to their advantage. In this example, MediShield's weakness is exposed as you have to pay 70% of the medical bill. Though the Claims/Premiums ratio is high, forking out $13,174 may wipe out most of your MediSave account. Comparing with Prudential PRUshield A+ and NTUC Enhanced IncomeShield Basic + Assist Rider, both private plans cover most of the costs with the NTUC paying the most out of the 3 plans. However, its premium is also higher as compared with PRUshield.

Benchmarks

To compare policies, benchmarks are introduced. Below are the descriptions:
  1. Percentage of bill paid by insurance measures the amount of medical bill paid by the insurance company over the total medical bills. (Higher is better)
  2. Claims/Premium paid measures the insurance payout over the premium you paid over the years. (Higher is better)
  3. Future Premiums (to be paid till your death) considers your ability to service your premium till you die. (Lower is better)
These factors are given a certain weight to produce the ranking for your consideration.
I hope the excel file will help you get the best plan for your needs.

4 comments:

  1. Thank you very much for the effort. It is very informative for layman like me.

    Once again, thank you very much :)

    ReplyDelete
  2. For cases 1 to 3, are you able to provide the breakdowns on how the amount paid by insurance and insured are derived. Thanks

    ReplyDelete
  3. Think there is a mistake in the calculation

    Deductible for En.Incomeshield Basic and Sup.Health B Plus is the safe for B2 ward. 1500

    So they 2 should be the same

    ReplyDelete
  4. is there any updated Version ?

    ReplyDelete