Insurance - Don’t wait till you develop a medical condition

Sunday, 31 l 10 l 2010 Source: The Sunday Times
By: Lorna Tan
HEALTHY SAVINGS

CASE 1
Mr Henry Tay (not his real name), in his 40s, was admitted for spinal surgery owing to lumbar prolapsed disc in the middle of this year. He spent three months in a Class A ward at Mount Elizabeth Hospital. In 2008, he had bought a Medisave-approved integrated Aviva MyShield plan as well as a rider – MyShield Plus – which covers the co-insurance component. The annual premium for his Shield plan is $480, payable by Medisave. He pays another $145 in cash for the rider.


His total hospitalisation bill of $203,000 comprised:
Room and board: $91,000
Surgeon fee: $27,000
Doctor attendance fee: $51,000
Other inpatient costs: $34,000


Total amount payable by insurance: $200,000
Ÿ Amount payable under MyShield: $180,000
Ÿ Amount payable under rider: $20,000
Amount not payable by insurance: $3,000 (deductible)


As Mr Tan’s rider does not cover the policy deductible of $3,000, he had to pay that amount out of his own pocket. The balance of the bill worked out to $200,000, of which the co-insurance component was $20,000 or 10 per cent of the total bill after taking into account the deductible. The amount of $20,000 was covered by the rider.
The outstanding amount of $180,000 was payable by his MyShield plan.
Had Mr Tay opted for a rider that covers both co-insurance and deductible, he need not have coughed up a single cent.


CASE 2
In January, Mr Daniel Loh (not his real name), 56, was admitted to a restructured hospital for cancer treatment during which he underwent three surgical procedures. He stayed in hospital for 59 days: three days were in the ICU B1 ward, five days in a B1 normal ward and 51 days in a subsidised ward. Mr Loh originally owned an IncomeShield standard plan. In 2007, he upgraded to an Enhanced IncomeShield Basic Plan, which is a B-ward plan with the as-charged feature. He added a Plus rider that covers the deductible and co-insurance components. His annual premium for his Shield plan is $340 and he pays another $224 in cash for the rider.


His total hospitalisation bill of $47,807 comprised:
Room and board and inpatient costs (ICU ward): $2,257
Room and board and inpatient costs (non-subsidised B1 ward): $4,279
Room and board and inpatient costs (subsidised B2 ward): $24,652
Surgical costs: $15,420
Implants and medical consumables: $1,199


Total amount payable by insurance: $47,807
Ÿ Amount payable under IncomeShield: $41,676.30
Ÿ Amount payable under rider: $1,500 (deductible) + $4,630.70 (co-insurance) = $6,130.70


The policy paid for the bill in full because Mr Loh stayed in the appropriate ward that was covered by the health plan and his rider covers both deductible and co-insurance.