Insurance & Costs of having and raising a child

[martinlee]

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.

From a social equality perspective, this is as near a universal health care coverage as one can get, compared to the previous version of Medishield. They don't even discriminate for pre-existing conditions and super old citizens. Because its open to nearly everyone and funded with the resources of the Singapore govt (and hence taxpayers) I would consider it superior to any offers by private insurers who will raise premiums at the drop of their hat to make their profit margins.

There are some costs to doing this and to avoid dipping entirely into the taxpayer pot they have tried to do some risk sharing with the younger generation. After all everyone gets old and the benefits come back through the cycle.

++++++++++++++++++++++++++++++++

My reference of private plans is for seniors 70+ :- their premiums are much more than what is offered by Medishield Life. Yes its class A vs B2/C but it is still something that needs to be paid out-of-pocket. Someone who earns 4-5k pm who can easily afford the private shield plans now (ya don't buy the cheng hu plan because the smart people said its more expensive) will come in for a rude shock when they reach older age and find that these now cost multiple times the previous premiums. Eventually these people will return to Medishield Life and taxpayers will have to pick up the slack.

Nothing wrong, if you want to be inclusive from a societal point of view. This is however wrong from fairness to Singapore taxpayers perspective because it allows private insurers to milk the profit in the low risk years and then passing it back to the govt when these people get old and too expensive to cover profitably.

Personally I am happy for these changes and if taxes need to be upped to pay for this I am fine because it is a necessary and good safety net.

What is the best course of action for someone like me??
I am 33 this year..

So I should keep my private plans till middle age and then switch to Medishield Life for optimum coverage vs premiums?

If the govt wants to prevent ".. private insurers to milk the profit in the low risk years and then passing it back to the govt when these people get old and too expensive to cover profitably...", the govt should just ban private plans outright and puts everyone on MediShield Life....

What I foresee from this is that the private insurers will raise premiums using the Medishield life universal coverage as reasons...

Everyone seems to forget that the private plans are integrated with Medishield, hence there is no milking by the private insurers.

There is no way of dropping of the Medishield plan to take up the private plan.

Everyone is in the Medishield pool whether they opt for a private plan or not.

When private insurer X collects $300 in premiums, they will have to pay Medishield their share of the premium.

Thus the private rates will never be lower than the Medishield rates.

The existing rates are lower, but they will have to be increased to take into account the new Medishield premiums.

Interesting.. I learnt something new today..

I was always under the impression that Private Shield Plans and MediShield are 2 separate things..

Using an analogy of McDonald's value meal...

So you are saying that MediShield is like the basic value meal and Private Shield is like the Upsize portion???

When I buy private shields.. they have to cough out a chunk of my premium to pay medishield?

That is right.

Even for the claims, your shield plan provider will recover part of the claim from Medishield.

The increase in private premiums in 2008 and 2013 were due mainly to the increase in premiums of the basic Medishield.

This table shows how much Medishield premiums have been increasing...

http://www.martinlee.sg/medishield-life-premiums/

[flinger]

That is true for Medishield Intergrated private plans.

But there are lots of medical/ hospitalization health plans which are not integrated with Medishield.

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.

From a social equality perspective, this is as near a universal health care coverage as one can get, compared to the previous version of Medishield. They don't even discriminate for pre-existing conditions and super old citizens. Because its open to nearly everyone and funded with the resources of the Singapore govt (and hence taxpayers) I would consider it superior to any offers by private insurers who will raise premiums at the drop of their hat to make their profit margins.

There are some costs to doing this and to avoid dipping entirely into the taxpayer pot they have tried to do some risk sharing with the younger generation. After all everyone gets old and the benefits come back through the cycle.

++++++++++++++++++++++++++++++++

My reference of private plans is for seniors 70+ :- their premiums are much more than what is offered by Medishield Life. Yes its class A vs B2/C but it is still something that needs to be paid out-of-pocket. Someone who earns 4-5k pm who can easily afford the private shield plans now (ya don't buy the cheng hu plan because the smart people said its more expensive) will come in for a rude shock when they reach older age and find that these now cost multiple times the previous premiums. Eventually these people will return to Medishield Life and taxpayers will have to pick up the slack.

Nothing wrong, if you want to be inclusive from a societal point of view. This is however wrong from fairness to Singapore taxpayers perspective because it allows private insurers to milk the profit in the low risk years and then passing it back to the govt when these people get old and too expensive to cover profitably.

Personally I am happy for these changes and if taxes need to be upped to pay for this I am fine because it is a necessary and good safety net.

What is the best course of action for someone like me??
I am 33 this year..

So I should keep my private plans till middle age and then switch to Medishield Life for optimum coverage vs premiums?

If the govt wants to prevent ".. private insurers to milk the profit in the low risk years and then passing it back to the govt when these people get old and too expensive to cover profitably...", the govt should just ban private plans outright and puts everyone on MediShield Life....

What I foresee from this is that the private insurers will raise premiums using the Medishield life universal coverage as reasons...

Everyone seems to forget that the private plans are integrated with Medishield, hence there is no milking by the private insurers.

There is no way of dropping of the Medishield plan to take up the private plan.

Everyone is in the Medishield pool whether they opt for a private plan or not.

When private insurer X collects $300 in premiums, they will have to pay Medishield their share of the premium.

Thus the private rates will never be lower than the Medishield rates.

The existing rates are lower, but they will have to be increased to take into account the new Medishield premiums.

[martinlee]

That is true for Medishield Intergrated private plans.

But there are lots of medical/ hospitalization health plans which are not integrated with Medishield.

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.

From a social equality perspective, this is as near a universal health care coverage as one can get, compared to the previous version of Medishield. They don't even discriminate for pre-existing conditions and super old citizens. Because its open to nearly everyone and funded with the resources of the Singapore govt (and hence taxpayers) I would consider it superior to any offers by private insurers who will raise premiums at the drop of their hat to make their profit margins.

There are some costs to doing this and to avoid dipping entirely into the taxpayer pot they have tried to do some risk sharing with the younger generation. After all everyone gets old and the benefits come back through the cycle.

++++++++++++++++++++++++++++++++

My reference of private plans is for seniors 70+ :- their premiums are much more than what is offered by Medishield Life. Yes its class A vs B2/C but it is still something that needs to be paid out-of-pocket. Someone who earns 4-5k pm who can easily afford the private shield plans now (ya don't buy the cheng hu plan because the smart people said its more expensive) will come in for a rude shock when they reach older age and find that these now cost multiple times the previous premiums. Eventually these people will return to Medishield Life and taxpayers will have to pick up the slack.

Nothing wrong, if you want to be inclusive from a societal point of view. This is however wrong from fairness to Singapore taxpayers perspective because it allows private insurers to milk the profit in the low risk years and then passing it back to the govt when these people get old and too expensive to cover profitably.

Personally I am happy for these changes and if taxes need to be upped to pay for this I am fine because it is a necessary and good safety net.

What is the best course of action for someone like me??
I am 33 this year..

So I should keep my private plans till middle age and then switch to Medishield Life for optimum coverage vs premiums?

If the govt wants to prevent ".. private insurers to milk the profit in the low risk years and then passing it back to the govt when these people get old and too expensive to cover profitably...", the govt should just ban private plans outright and puts everyone on MediShield Life....

What I foresee from this is that the private insurers will raise premiums using the Medishield life universal coverage as reasons...

Everyone seems to forget that the private plans are integrated with Medishield, hence there is no milking by the private insurers.

There is no way of dropping of the Medishield plan to take up the private plan.

Everyone is in the Medishield pool whether they opt for a private plan or not.

When private insurer X collects $300 in premiums, they will have to pay Medishield their share of the premium.

Thus the private rates will never be lower than the Medishield rates.

The existing rates are lower, but they will have to be increased to take into account the new Medishield premiums.

Yes, but for the context of this discussion, I was referring to the integrated plans.

[HitandRun]

Martin,
I think ok lar, right?
pay for elderly to get insured should make us a better society, so it's a pleasure to help.

Chialc88

My read of the matter is different. Govt is not asking us to subsidise the elderly, they are providing the one-off subsidy.

However, to make the premium more affordable when old, the Govt is charging young people more when they are younger so that the surpluses/savings can be used to subsidise the premiums when these folks grow older. IMHO, this is different from saying that we are subsidising the older generation now.

If anything, we are subsiding fellow Singaporeans within our same cohort with pre-existing conditions.

[safetyfirst]

Martin,
I think ok lar, right?
pay for elderly to get insured should make us a better society, so it's a pleasure to help.

Chialc88

My read of the matter is different. Govt is not asking us to subsidise the elderly, they are providing the one-off subsidy.

However, to make the premium more affordable when old, the Govt is charging young people more when they are younger so that the surpluses/savings can be used to subsidise the premiums when these folks grow older. IMHO, this is different from saying that we are subsidising the older generation now.

If anything, we are subsiding fellow Singaporeans within our same cohort with pre-existing conditions.

It is interesting to read that " the Govt is charging young people more when they are younger so that the surpluses/savings can be used to subsidise the premiums when these folks grow older. "

So what is the government going to do with the surplus? i am quite certain they are going to invest it so that it is not eroded by inflation. Can we be assured of a decent return if they invest it? ... because if they dont get a decent return, at the end of the day, when i get older, they are still going to raise the premims!

If they are so certain of getting a decent return, then why is it that we get a miserable 2.5% on our OA only?

[HitandRun]

So what is the government going to do with the surplus?

How will I know? Maintain in normal instruments that insurance companies invest in?

Can we be assured of a decent return if they invest it?

How will I know? What is decent to you might be obscene to me.

If they are so certain of getting a decent return, then why is it that we get a miserable 2.5% on our OA only?

This one I know. Simple explanation => the rest of the returns are kept by Govt to be spent on other stuff like Pioneer Generation package, Medishield subsidy, etc or simply locked up for a rainy day.

[CY09]

Why do we get 2.5%? Because many Singaporeans are ignorant of the fact one can get 6% returns staying invested over the long run

[egghead]

BT today:
Govt-mandated scheme from next year involves cover of up to $400,000

No-commission life insurance up ahead

[CityFarmer]

BT today:
Govt-mandated scheme from next year involves cover of up to $400,000

No-commission life insurance up ahead

The result of last review?

It will impose a downward pressure on insurance agent fee.

[egghead]

IMHO, this is a good move by MAS

Singaporeans are known to be under-insured so this scheme can possibly coax more people to re-work their finances and take up or increase their coverage.

It will also serve as a reference point for consumers when they discuss with their insurance agent over their insurance needs - much like what we do today - checking prices online before going out to shop.

Overall, should be good for insurers and consumers. Agents will be hit. Maybe this will make them more receptive to fee-based service compensation.