Let’s talk about health insurance riders - it’s not the most exciting topic but we promise you that understanding this will help you avoid a lot of confusion around your hospital bill. Before we get into the specifics, let’s get the basics out of the way.
What are insurance riders?
Insurance riders are additional benefits that you can purchase to enhance your existing policy coverage. Think of them as ice-cream toppings - not essential but good to have. There are different types of insurance riders available for different types of insurance policies.
In this article, we’ll focus on helping you understand riders for Integrated Shield Plans (IPs):
· what are they?
· how do they work?
· do you really need them?
But first, a quick refresher on IPs.
IPs are plans that give you more comprehensive protection, without overlapping your MediShield Life coverage. They form an essential part of the health insurance plan for Singaporeans and permanent residents as they complement the benefits of MediShield Life to provide wider and higher hospitalisation and medical coverage. Aviva’s MyShield is an example of an IP.
What are Integrated Shield Plan riders?
IP riders are plans that can be added to your IP to reduce your out-of-pocket expenses such as deductible and co-insurance. These are also known as co-pay or co-payment. If you’re not familiar with these terms, we’ve got you covered here.
In addition to reducing your co-payment (i.e., deductible and co-insurance), IP riders may offer benefits such as a lump-sum payout if you’re diagnosed with a critical illness.
Aviva’s MyHealthPlus rider offers
- coverage for deductible and/or co-insurance under MyShield
- a lump-sum payout upon diagnosis of any of the covered critical illnesses
- Global Treatment benefit, which allows you to get medical treatment for selected illnesses in top-class panel hospitals overseas
- free cover or preferred rate for your children up to age 20
How do riders work?
Policyholders with IP riders are required to co-pay at least 5% of their total claimable hospital bill. This means after the deductible is paid, the insurer can pay up to 95% of your medical bills while you co-pay 5%. Full IP riders that cover the entire hospital bill were phased out by April 20211 as recommended by the Health Insurance Task Force2, except for claims-based pricing plans offered by selected insurers3. This helps to keep healthcare costs affordable and encourages the public to be more accountable for their healthcare expenses.
Here’s an example of how your out-of-pocket expenses can be reduced with an Aviva MyHealthPlus rider.
Let’s say you’re covered under MyShield Plan 1 and MyHealthPlus Option C-II rider. You stayed in a private hospital and incurred a medical bill of S$150,000. Your IP has a S$3,500 annual deductible and a 10% co-insurance feature. MyHealthPlus Option C-II rider will reduce your annual deductible, as well as your co-insurance amount.
|Without rider||With rider|
|Total hospital bill (treated by a panel specialist)||S$150,000||S$150,000|
|Less: Co-insurance||S$14,650 ([150,000-3500]x10%)||S$3,000^|
|Total amount payable by insurer||S$131,850||S$146,500|
|Total amount payable by you||S$18,150||S$3,500|
The above example shows you will pay S$14, 650 less out-of-pocket expense if you have a rider. Do note that the out-of-pocket expense may not be the same for all insurers as it depends on the policy coverage.
Do you really need a rider?
So, the question is: are IP riders essential? While it’s not critical to add a rider to your IP, it’ll definitely help to reduce out-of-pocket expenses due to hospitalisation.
With a rider, you can enjoy greater peace of mind and focus on your recovery without the need to worry about large medical bills.
However, before buying a rider, it is important to evaluate and understand the options available based on your needs and affordability as the benefits and level of coverage provided by each insurer are different. The rider’s premium also adds on to your IP premium every year.
1The Straits Times © Singapore Press Holdings Limited. Extracted with permission. “MOH welcomes insurers’ move to adjust terms for full-rider IPs, require co-payment of hospital bills””, 17 February 2021 https://www.straitstimes.com/singapore/health/moh-welcomes-measures-by-insurers-to-adjust-terms-for-full-rider-ips-and-require-co
2The Health Insurance Task Force was formed in February 2016 with the objective to ensure Singapore residents have access to affordable quality healthcare. It comprises members from the medical community, insurance industry, consumer associations and is supported by the Ministry of Health and Monetary Association of Singapore.
3Please refer to respective insurers’ websites for more details.