I have a member in my Financial Independence community who was diagnosed with blood cancer in 2023.
He has since undergone treatments and we are happy that he is currently in remission. He decide to document his medical claims experience so that more of us can have an idea about it. So he did up a presentation slide-deck for an internal education presentation but graciously share it with me here so that more people can know about it.
He was admitted to a government hospital under an A/B1 class treatment and he has a private shield plan with a rider. The total treatment came up to $191k but because he has private insurance and rider, the total out-of-pocket ended up $7.1k. This $7.1k can be payable by your CPF Medisave but there are limits to how much you can pay with it.
This might be something that some of you are less aware of in that you can choose to change to a lower grade of care, even if you go in as a unsubsidized Class A or B1 ward treatment patient.
My reader gave a couple of bill examples and tries to explain how to read it. This would be one of the more major surgery that comes with a more hefty bill before insurance. You don’t see a deductible here, likely because my reader has already paid for the deductible for this calendar year (you only pay the deductible once per calendar year).
If he doesn’t have a rider that reduces his co-payment, he would be paying out-of-pocket of 10% of that $40k cost (about $4k).
I think the health shield have worked even if you pay $4k for a major surgery without the rider just that when the bill adds up it an be bigger.
If your total medical bill comes up to $190k and you do not have a rider, you might end up paying about $24k instead of $7.1k like my reader, with part of it in Medisave. I wrote about setting aside $50,000 in a medical sinking fund today as part of my financial independence plan so that I can have an inflation adjusted $74k from now (then 44 years old) till forever for my CI needs.
$50,000 Portfolio to Supplement Lifetime Critical Illness Coverage.
I was provisioning for a $40,000 amount for a 10% co-insurance in a government A ward treatment and this government hospital treatment would fall into that.
The days of a health insurance that covers from the first dollar is over and we would need some sort of a medical sinking fund more and more. Not an emergency fund because a medical need is not an emergency anymore! If you know that you are a human, you jolly well know you will break down and if so why is a medical situation such a surprise?
There are some stuff that I choose not to say because I work in an advisory firm that currently specialize in insurance. But I can tell you that the claims experience for health insurance vary among the insurers.
Vary in terms of
- When you get the claims money
- How long the process takes
- How frustrated the process is
- How much will be the eventual claims versus your out-of-pocket
You might need to pay some of the bills upfront yourself before the claims are settled. The insurer may take time to agree with the hospital on how much is claimable, especially for private treatment for certain insurers.
Advanced-stage critical illness insurance helps but they do end at some stage. You can get a term till 99 if you are willing. Or you can start building up a medical sinking fund like me.
Any savings for medial needs is good.
Especially if your medical plan is under a popular insurer in Singapore that many DIY people automatically buy.
My reader put out these two slides to explain the limits of the current evolution in health insurance and whether he thinks it is adequate for us. For a unsubsidized government treatment, the limits should be enough for the cancer drug list.
But he feels that the amounts for cancer drug services may not be sufficient even if you have a basic shield plan that five times the MSHL.
That has always been my suspect and we are starting to see that play out.
You can review the whole slidedeck here.
I want to thank my reader for graciously sharing this with us. I feel that some of the nuances of the claims experiences, the amounts, how the bill looks like are critical to help shape some of our financial decisions. But it isn’t easy to find case studies yet respect people’s privacy and I got this chance because my reader has a big enough heart that want to educate and help more people. Just to be clear, this is not a claims experience administer by Havend.
These are significant events. And they do alter how you look at your life now, reflect upon how you have lived your life, and what it means going forward. We get to see some of the stuff my reader missed out on and the joy he felt when he was able to get back to it.
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Kyith is the Owner and Sole Writer behind Investment Moats. Readers tune in to Investment Moats to learn and build stronger, firmer wealth foundations, how to have a Passive investment strategy, know more about investing in REITs and the nuts and bolts of Active Investing.
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Kyith worked as an IT operations engineer from 2004 to 2019. Currently, he works as a Senior Solutions Specialist in Insurance Start-up Havend. All opinions on Investment Moats are his own and does not represent the views of Providend.
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