Decoding Hospital Integrated Shield Plan (IP) Insurance: 4 Surprising Reasons It’s Not As Simple As You Think
The idea behind a Hospital Integrated Shield Plan (IP) insurance is simple. You pay a premium (aka the subscription fee) and in return, you get financial protection. In the event that you need to seek treatment at the hospital, your insurer will foot the bill (well, most of it) for you.
But here’s where it gets confusing. Each insurance company offers their own Hospital IP insurance with different types of coverage. Depending on your choice of coverage and insurer, it can vary by as much as $85k in premiums that you pay over your lifetime.
4 Factors That Influence Pricing On Hospital IP Insurance Premium
There are four key factors that influence how much you will need to pay in premium for your Hospital IP insurance.
Public vs Private Hospital
When you fall sick, you have two choices. Either you seek treatment at a public hospital where the medical fee is subsidised, or you choose to get treated at the private hospital where you can get premium healthcare options.
A close analogy would be taking a cab (private hospital) versus taking public transport (public hospital). Cabs (private hospital) cater to a small group of target audience and they are able to offer more comfort, privacy, and less wait time.
In contrast, public transport (public hospital) has to take care of a larger group of users, which tend to slow down treatment time and increase the waiting period. But because of the economies of scale, it is able to offer each individual lower treatment cost.
Therefore, if you are opting for a private Hospital IP insurance, it is going to cost you more compared to a public Hospital IP insurance.
And even within public hospital, you have class A and class B1. The higher the class, the more privacy and comfort you get during your stay in the hospital. Obviously, that comes with additional cost for treatment, which is translated to higher insurance premium for your Hospital IP insurance.
Panel vs Non-Panel
Not every illness is treated equally. For complex health problems, you might need to seek treatment from a specialist.
For the uninitiated, specialists are doctors/surgeons that have their own niche area of expertise. These specialists may be running their own private practices in clinics or medical centres, which are not part of the public or restructured hospital that most of us know.
Insurers typically have their own pocket list of specialists that they have vetted. This group of specialists can be referred to as panel, i.e. a group of preferred partners that insurers work with to treat their customers (aka you).
If the insurer maintains a bigger group of panel doctors, it usually means that there’s higher costs associated with it. This will cascade down to higher cost for you when you are paying for your insurance premiums.
Some insurers may also allow claims to be made for treatment with non-panel specialists, albeit at a discounted rate because of possible inflation of fees associated with treatment rendered.
Claims for Hospital IP insurance are on a reimbursement basis. Therefore, if other customers who are insured with your insurer are making more of such claims with non-panel specialists, it will inevitably drive up the overall cost for the insurer. The insurer will have little choice but to raise your Hospital IP insurance for the following year.
Rider vs No Rider
Rider is an insurance terminology that often confuses people. But it’s actually a simple concept. Just simply think of rider as an add-on.
Without a rider (or add-on), Hospital IP insurance can only cover up to a maximum of 90% of your hospital bill. The remaining 10% will need to be paid for by you in either cash or MediSave.
If you are taking the rider (or add-on), it means that the insurer will cover 95% of the hospital bills for you. You only need to fork out the remaining 5% in either cash or MediSave.
When you add a rider, it is going to cost the insurer more to cover your hospital bills. Therefore, they are going to charge you a higher premium to balance the additional cost they might incur in the future.
Age
The last factor that affects your Hospital IP insurance premium is your age. Biologically, as you age, your risk of health complication increase.
As you age, the cost of treating your health issue might require more expertise (e.g. specialist), stronger dosage of medicine, or longer period of care. Each of these factors translate to a higher cost of treatment that the insurer has to bear on your behalf.
This essentially means that, the older you get, the more premium you need to pay in order for the insurer to cover your health risks.
Source: Straits Times
So Whose Hospital IP Insurance Is The Most Expensive?
The question begets, who is the most expensive Hospital IP insurance of them all right now? Well, as you might have guessed, it really depends.
Public Hospital Class Standard With Coverage Fixed by MOH: AIA
Source: Straits Times
The most basic Hospital IP insurance that you can buy is the Standard plan, which is offered by all the insurers. This Hospital IP insurance provides an slight additional layer of medical expenses on top of what every Singaporean has with MediShield.
For this category of Hospital IP insurance, AIA charges the most premium you’re your lifetime.
Public Hospital Class B1: SingLife
Source: Straits Times
This category of Public Hospital Class B1 is a slight variation of the Hospital IP insurance where the definition of coverage is defined by each insurer.
In this category, SingLife is by far the most expensive insurance you can get with a lifetime premium payable of $95+k.
Public Hospital Class A: Singlife
Source: Straits Times
If you are looking to get Class A benefits in the event of a hospitalisation, then you will need to go beyond the Public Hospital Class B1 IP insurance. This falls under the Public Hospital Class A group of Hospital IP insurance.
While the naming conventions of each insurer for Public Hospital Class A can be confusing, just know that every insurer offers this tier of Hospital IP insurance.
Once again, SingLife takes the crown for being the most expensive of them all. The cheapest Hospital IP insurance in this category (PRUShield Plus) is almost 37% cheaper than what SingLife is charging.
Private Hospital: AIA
Source: Straits Times
Lastly, if you are looking for private hospital coverage, you need to be prepared to incur at least $234k in premiums over your lifetime even with the cheapest (Raffles Shield Private) option.
AIA gets the crown for the most expensive plan. AIA HealthShield Gold Max A will cost you $323+k in premiums over your lifetime. Out of which, almost $268k needs to be paid for in cash or MediSave.
Conclusion: Professional Advice Is Helpful When Navigating Your Hospital IP Insurance Needs
What stood out to us is that the lifetime premium you are paying for Raffles Shield Private is almost double of what you would pay for a Public Hospital Class A plan.
Thus, it is really important to understand what kind of coverage you need. Just like with everything else in life, going for the most expensive one doesn’t necessarily mean it’s the best. You need to find one that is the most fit for purpose.
Having a professional like Moneyline.sg to help you decipher your personal preference, budget, affordability, and healthcare needs is an objective way to decoding how much Hospital IP insurance you really need.
At Moneyline.SG, we strongly believe that navigating the complexities of Hospital IP insurance doesn’t have to be overwhelming. We want to help you take control of your health coverage.
Book an appointment today so that our team at Moneyline.SG can help you help yourself.
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