Insurance & Costs of having and raising a child

[CityFarmer]

I thought a letter to the ST forum today makes a good read and some discussions:

http://www.straitstimes.com/premium/foru...s-20140626

I reproduce the letter below in case the url gets ineffective subsequently.

The writer (Mr Martin Lee) also has a decent post on his website:

http://www.martinlee.sg/time-drop-integr...ield-plan/

Personally, given that details on Medishield Life has yet to be released and the impacts on the IP plans, I think advise to people to drop their IP plans is rather premature. Other than the mean-testing that the writer writes abt, I think people will also have to consider further evolutions of the medishield plans, future capacities of B1/C wards among other factors to decide if one should drop the IP plans.

===============

THE advice given to readers last Saturday ("Medisave sum 'goes further in new plan'") was that if a person required only subsidised care (staying in B2 and C wards), then MediShield Life alone should be sufficient.

Anyone considering dropping his private Integrated Shield Plan (IP) because he is thinking of going for only subsidised care should also consider whether he is impacted by means testing.

With means testing, a person earning more than $3,200 a month or is unemployed but living in private property would receive a lower subsidy for his bill. The extra unsubsidised portion of the bill would not be covered by MediShield or MediShield Life.

I urge everyone to consider all the factors carefully before rushing to cancel their IP.

Hi everyone, I am the writer of that forum letter. To give an example (this was edited away):

The payable amount on a $20,000 bill at 80% subsidy is $4000. This amount would then be accessed under the Medishield Life claim limits.

A person impacted by Means Testings under the worst case scenario might only receive 65% subsidy. In that case, the payable amount becomes $7000 with the extra $3000 not claimable under Medishield Life.

I will be writing another article to talk about the other dimensions other than Means Testing.

Welcome to our VB. Looking forward for more of your sharing in personal finance.

Regards
Moderator

[NTL]

To follow up on Medishield Life, here is an article from StraitsTimes.

http://www.straitstimes.com/news/singapo...d-20140627

The premium can be almost 200% above current plan for certain age group...

http://www.straitstimes.com/news/singapo...s-20140627

[martinlee]

It's a 200-300% increase and the headline goes by : "MediShield Life review: Premium increase much lower than feared"

Full report can be found here:

http://www.moh.gov.sg/content/dam/moh_we..._Final.pdf

[NTL]

It's a 200-300% increase and the headline goes by : "MediShield Life review: Premium increase much lower than feared"

Full report can be found here:

http://www.moh.gov.sg/content/dam/moh_we..._Final.pdf

Seriously, sometimes StraitsTimes headings can be seriously misleading.

Thanks for pointing out the link.

[thefarside]

It's a 200-300% increase and the headline goes by : "MediShield Life review: Premium increase much lower than feared"

Full report can be found here:

http://www.moh.gov.sg/content/dam/moh_we..._Final.pdf

It is apparent they are shifting the burden into the 30-41 age group which is presumably the largest and in the economic prime of their life - therefore also most able to take this on. The burden decreases as you get older, and furthermore, they are accepting old folks with pre-existing conditions. Based on what I see, I feel it is a fair arrangement.

[CY09]

Not to be sarcastic here. I am very curious to find out how the current 28-33 age cohort will fare in their retirement adequacy at the age of 55-65.

1) How many % of the cohort will meet the CPF min sum w/o the need to pledge their property?
2) Will they have enough for retirement beyond basic needs?

In my view, this is because 1) Majority of them are the unlucky ones who had applied for BTO in 2010-2011 when the old rule for pricing BTOs was around, 2) now they are being hit by the new medishield premiums.

[thefarside]

Pray tell, what is the old rule of pricing BTO?

What I know is, the BTO price was frozen shortly in 2012 when KBW revised the method of creeping up BTO prices with the rising HDB resale market index. I am not aware they actually made the flats any cheaper, and therefore had specifically advantaged those who bought after that.

About the premiums, my initial impression of Medishield Life is that it is a far superior scheme than the older one. Those who buy external plans will know how much it costs, especially the as-charged plans when you get old. Nothing is for free. Those premiums that you see today are simply based on current claims and they are already nearly 7-10x those charged by Medishield Life for similar aged groups. Anyone who believe those premiums for private insurers will not go up between now and 40 years need to wake up and smell the coffee.

I will try to convince myself that people will indeed suffer serious financial damage from the increased premium from the new medishield scheme as implied by you...

[martinlee]

Pray tell, what is the old rule of pricing BTO?

What I know is, the BTO price was frozen shortly in 2012 when KBW revised the method of creeping up BTO prices with the rising HDB resale market index. I am not aware they actually made the flats any cheaper, and therefore had specifically advantaged those who bought after that.

About the premiums, my initial impression of Medishield Life is that it is a far superior scheme than the older one. Those who buy external plans will know how much it costs, especially the as-charged plans when you get old. Nothing is for free. Those premiums that you see today are simply based on current claims and they are already nearly 7-10x those charged by Medishield Life for similar aged groups. Anyone who believe those premiums for private insurers will not go up between now and 40 years need to wake up and smell the coffee.

I will try to convince myself that people will indeed suffer serious financial damage from the increased premium from the new medishield scheme as implied by you...

Why do you find it a superior scheme?

It isn't fair to compare the premiums of Medishield Life to the private shield plans. They cover very different things.

Medishield Life covers for B2 and C wards, while the private plans cover B1, A or private hospitals.

To put things into perspective, the new premiums for Medishield Life (for certain age groups) is more than the prevailing premiums for private plans that can cover for B1 or A class.

[chialc88]

Why do you find it a superior scheme?
To put things into perspective, the new premiums for Medishield Life (for certain age groups) is more than the prevailing premiums for private plans that can cover for B1 or A class.

Hi Martin,
from your understanding, what could had caused the MSL premiums to be higher that B1 or A class private plans?

also, for those poor and needy, whether you feel that their interest is better protected compare to without MSL?

It's too much details to digest, so I thought you could help me out.

Love Compassion





Earth day - save the world everyday.

[yeokiwi]

To put things into perspective, the new premiums for Medishield Life (for certain age groups) is more than the prevailing premiums for private plans that can cover for B1 or A class.

There are about 10000 above 90 years old folk that are going to be covered under M.Life and also some old folks that are not covered by Medishield in 1990.
And there are citizens who are excluded due to pre-existing conditions.

Of course, if the private insurers get to pick and choose, it will definitely result in lower premiums for a selected group of Singaporeans.

If the private insurers have to factor in the above groups, it will definitely charge higher than the current premium.