The Ministry of Health (MOH) has announced that Standard Integrated Shield Plans ("Standard IP") will be available from 1 May 2016, to complement MediShield Life.
While the basic MediShield Life is primarily designed to provide coverage for services at Classes B2 and C wards, the new Standard IP is geared towards providing coverage for services at Class B1 wards.
It is available from all the insurers who sell IPs, such as Aviva.
Here are 5 things you need to know about the Standard IP.
1. Standardised, "no-frills" benefits across all insurers.
The Standard IP benefits are regulated by the Government, and are similar to MediShield Life's, but targeted at Class B1 coverage.
It's intended to be a "no-frills", affordable plan targeted at large hospital bills and selected costly outpatient treatments such as chemotherapy and kidney dialysis. As such, it does not provide some additional benefits that existing IPs provide.
For example, the Standard IP does not cover pre- and post-hospitalisation treatment, overseas emergency treatment, or provide additional inpatient benefits for major illnesses.
There are also claim limits with the Standard IP, to balance between providing adequate coverage and ensuring that premiums remain affordable. Although there are claim limits, they are set to fully cover 9 out of 10 Class B1 bills.
2. Premiums differ across insurers.
Although benefits are standardised across all IP insurers, premium rates may differ.
Similar to all other IPs, premiums for the additional private insurance coverage component of the Standard IP are set by the private insurers.
However, when choosing which Standard IP to get, you shouldn't just compare the premiums. Other factors to consider include continuity of coverage, your trust in the brand, as well as the insurer's claims service. You should also note that IP premiums are not guaranteed, so different insurers may raise premiums differently over time, taking into account their actual claims experience and expenses, risk management policies, and other relevant factors.
Nonetheless, all the IP insurers have committed to keeping premiums for the private insurance component fixed for two years from the launch date.
3. You can pay for your Standard IP premiums with Medisave.
Just like with all IPs, you can use Medisave to pay for your Standard IP premiums.
Based on the current Standard IP premiums and the current Additional Withdrawal Limits, you should be able to use your Medisave to fully pay for your Standard IP premiums until the approximate age of 75.
Thereafter, the premiums may exceed the Additional Withdrawal Limits, and you’ll have to top up the rest of your premium payment in cash.
4. Your deductible and co-insurance will still exist.
Co-payment features, such as deductible and co-insurance, are still included in the Standard IP design, in line with ongoing efforts to manage healthcare costs.
The deductible – or excess – is the initial amount you need to pay before the medical cost is covered by your Standard IP.
Co-insurance is the percentage of the bill you need to co-share with your insurer.
Both can be paid by either Medisave or cash.
You may be able to purchase an add-on – also known as a rider – from your insurer to cover the co-insurance and/or deductible portions of the bill as well, to minimise your out-of-pocket expenses.
5. You might need to undergo underwriting if you switch insurers.
If you want to downgrade from your existing IP to the Standard IP with your current insurer, you will not need to go through underwriting. (This is with the exception of Aviva policyholders who had previously opted for moratorium underwriting1, where applicants are not required to make any health declaration at point of purchase.)
If you are downgrading to the Standard IP and also wish to switch to another insurer, you will then need to undergo underwriting with the new insurer.
This may lead to a loss of coverage for existing medical conditions covered in your original plan.
It's best to speak to your financial adviser representative to fully understand your options and any implications, before making a switch. Now that you know what the Standard IP is all about, it's probably a good idea to review and assess your health plans to ensure they meet your budget and protection needs for the long-term.
1 Under moratorium underwriting, no underwriting is required. Any new, unexpected medical conditions arising after commencement of Life Assured's coverage will be covered, subject to the terms and conditions of the policy.