Should I Upgrade My Health Insurance Policy (Integrated Shield Plan)?

At the start of the year, I visited a secondary school friend of mine who was hospitalized after he underwent craniotomy. This was a major surgery to temporarily remove part of the skull to expose the brain and remove a tumour in it. It sounded scary as hell when I first googled the term. Thankfully, he is on the road for a successful recovery and I wish him all the best.

That sets the context for this blog article. At the hospital ward, he shared his experience of seeking help in the public health system before eventually settling on a neurosurgeon from the private sector. As I left the hospital that day, his experience left me pondering whether I should upgrade my health insurance policy, also known as integrated shield plan in Singapore?

What Happened To Heartland Boy’s Friend

Let me first disclaim that since this anecdote may have some inaccuracies, but I believe that I have captured the gist of it. This is the timeline of events.

• My friend first experienced double vision around 3Q 2023 and went to the polyclinic. He was referred to a medical centre that provides specialist outpatient consultations.
• Around early December, he went for his appointment and did a comprehensive set of tests for his eyes. The conclusion was that everything was normal for his eyes, except that the optic nerves were observed to be swollen which was a potential life-threatening situation. The specialist recommended him to get a CT scan on his brain from the A&E immediately.
• The very same day, he went to the A&E section of a government restructured hospital and performed a CT scan. A mass was detected and the doctor ordered a MRI which is a more detailed scan.
• A few days later, he did the MRI scan. During the ward visit, a junior neurosurgeon confirmed that there was indeed a tumour in his brain. However, the junior doctor wanted his senior to also provide his opinion on the case. Unfortunately, it being the holiday season, the senior neurosurgeon would only be back in Singapore 2 days later. My friend agreed to wait and remain warded.
• Upon landing in Singapore, the senior neurosurgeon stated that 1 of the options was to perform a craniotomy to remove the tumour. He gave the success rate of the surgery at 75-80%. The remaining percentage being side effects such as loss of vision, weakness in limbs, paralysis and even death etc. He recommended a more thorough consultation the following week or for my friend to seek a second opinion elsewhere.
• My friend chose the latter option and spoke to 2 neurosurgeons in the private sector within the next 2 days. The diagnosis was the same but the success rate of the surgery was put at a significantly higher rate of 95% and 97% respectively.
• After spending Christmas at home, my friend did the surgery with 1 of the neurosurgeons in private practice which was a resounding success.

Cost of surgery in Private Hospital

Today, my friend is recuperating well at home which is the upmost priority. Thereafter, he proceeded to share with me the financial outlay resulting from this unforeseen health episode. The financial impact was higher than expected because of the following reasons:

1. He downgraded his health insurance policy 2 years ago from Private to Class A ward at government restructured hospitals. This was to keep premiums affordable as he was one of those who could not tolerate the ever increasing insurance premiums on his health insurance policy.
2. Due to the higher confidence that the neurosurgeons in the private sector exuded, he chose to perform the surgery with one of them instead. As a result, his health insurance policy would only cover a maximum of 70% of the bill incurred at the private hospital.

Diagram 2 illustrated the amount the total hospital bill size, with figures rounded up.

As shown in Diagram 2, his co-payment was roughly 32% (22.7% + 9.5%) of the total bill size which comprised of both cash and Medisave.

With regards to his bills incurred at the government hospital when he was warded for CT and MRI scans, they were largely covered by the insurance provider with only a small amount of co-payment required from his end. This was similar to my own experience for an elective surgery in a restructured hospital back in 2022 when my co-payment was also kept at a minimum.

As aforementioned, my friend’s unfortunate episode sent me back to the drawing board to evaluate whether I should upgrade my health insurance policy. For context, I am currently on Income’s Enhanced Advantage with the Classic Care Rider.

Factors

These are the major factors that could help one decide between a health insurance policy that provides private hospital coverage or public hospital coverage.

a) Cost

The first factor to consider is the difference in premiums for coverage between a private and public hospital. For a simpler comparison exercise, I have removed the premium for MediShield Life since it is compulsory for Singapore citizens and Permanent Residents anyway.

As shown in Diagram 3, the difference between the 2 policies is an annual amount of $859 for insured whose age are between 36 to 40. If we are to compare between the 61 to 65 age band, the differential premium is $4,085. At 76 to 78, it rises to $8,007. These are all annual differences in the premiums. But how about a lifetime’s difference since I am in a dilemma on whether I should upgrade my health insurance policy?

To calculate this, I accumulate the annual differences from age 36 to 84, which is the average lifespan for a male in Singapore (fun fact- its dubbed a manufactured blue zone).

As shown in Diagram 4, the difference in premium between the 2 health insurance policies is $206,349. This figure is astonishingly huge and it does not even take into account either time value of money or expected upward adjustments to premiums in the future. With this comparison analysis, I totally empathise with my friend who chose to downgrade his health insurance policy 2 years ago.

b) Wait Time

It is common knowledge that more people seek public hospital treatments so the wait time tends to be longer. For instance, my friend had to wait several months from his appointment in polyclinic to see an eye specialist. On the other hand, appointment slots with the neurosurgeons in the private practice were faster and this could be a key benefit if the medical condition is time-sensitive.

c) Doctor

Readers may be quite appalled at the difference between the success rate cited by the neurosurgeons in the public and private sector in my friend’s case. Before we jump into any conclusions, it is a fact that doctors in private practice are essentially entrepreneurs running their own businesses. They could be more motivated by the profitability of their clinics and may project more confidence to secure a patient’s business.

Another point to note is that the clinic and the private hospital (which provides the operating theatre, wards) may not be the same entity and hence the administrative system becomes more complex for the patient to navigate.

On the other hand, public healthcare institutions under MOH operate on a not-for-profit basis and falls under a single umbrella.

Conclusion

After listing down the factors and speaking to my financial advisor which further provided clarity of thought, I have decided to postpone my decision to upgrade my health insurance. I must emphasize that there is no right or wrong here and it was not an easy decision to arrive at. It is just that I feel my healthy lifestyle is already a first line of defence while my health insurance policy and rider form a safety net should I need to seek medical treatment. I am also careful enough to use the word “postpone” here because I feel that my outlook and life circumstances may change in the future and it would call for a review again.

This article is published on 6 Feb 2024.

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