Not sure whether you have talked about your hospitalization plan and whether you plan to save or can reduce such 'expenses'. And what do you think about the new proposed "eldershield" that might be compulsory for the new batch of 30 years old?
-Ruby
Many thanks to reader Ruby for suggesting this topic.
I think about my hospitalization plan (H&S) very simply.
Previously, without Medishield Life, it was only Medishield.
And the suggestion previously was just get any Shield plan by any private insurer. Cos the old Medishield coverage just wasn't sufficient.
The coverage by private insurers at that time were about the same, but the premium prices were quite different. But they weren't particularly exorbitant.
So any private Shield plan would be better than the old Medishield.
The options used to be something like...
1) Only Medishield - Insufficient coverage
2) Private shield public hospitals - Good enough coverage
3) Private hospitals - For those who want to enjoy their stay
The decision previously was always either option 2 or option 3.
I will comment about deductibles and co-insurance later.
Now, with Medishield Life, the decision is somewhat simpler...
Medishield Life now has pretty much taken over Option 2...
So the decision come down to...
1) Medishield Life - Fairly good coverage at public hospitals
2) Private Shield Basic - Better coverage and bed at public hospitals
3) Private Shield Premier - Private hospitals
I'm actually very happy that the Government has stepped in on this. Cos we always hear stories about how a family can end up in extremely bad financial situation when a medical issue arises and they weren't financially aware to get themselves adequately insured. I was wondering why the Government never bothered to do it sooner.
Anyway... In my opinion, Medishield Life coverage is sufficient...
As I said, I will talk about deductibles and co-insurance later.
Option 2 and 3... are pretty much about getting better service.
Currently, I am on Option 3.
But I have been thinking of dropping my coverage to a lower coverage or just Medishield Life, but they only charge me once a year and I don't need to fork out cash for it so I tend to forget about doing it when the year goes on.
My wife needs a cash top up... but I know she wouldn't want to drop her coverage cos IF she ever needs to stay in a hospital, she would want to enjoy her stay with better service.
Ok so my thoughts on this...
Previously Medishield was insufficient, so ANY private Shield plan would be suggested.
Now, Medishield Life is somewhat sufficient. So any private Shield plan is just an upgrade.
I look at this from a very broad perspective... cos... there's only a chance I will use this service in future. I'm assuming I take care of my health and everything. But no one will know what kind of issues I might get hit with. So the fine details of what EACH private provider covers, I don't bother too much looking into the small individual lines of coverage.
Most of the private insurers cover a general base coverage which are similar with each other, along with slight variations of specialized conditions. Since I will never know which specialized condition I will need in future, over-analyzing them would serve no significant purpose.
Deductibles and Co-Insurance
Ok many people are split between this.
Personally, I don't find a need for this. Premiums for deductibles and co-insurance are extremely expensive, especially in the later years.
Personally, I think I take pretty good care of my health, so I don't expect to be going to hospital on a regular basis. So a couple of thousand dollars of deductible or co-insurance, I'll absorb the risk on my own account.
But yet, I also see young-ish folk, around 40 yrs old, going in and out of hospital regularly every 6 months or so due to chronic issues. I'm not sure if they take care of their health, from what I know about them, they have poor lifestyle habits, poor eating habits, sleeping habits, etc... so... I think it contributes to their regular hospital visits.
I estimate it to be every 8-10 years of paying the premium will fund 1 round of paying the deductible/co-insurance. I've bought insurance since I was 25 years old. I'm 36 this year, I haven't visited the hospital during this 11 years so I have saved in premiums to fund my next 1 visit to the hospital IF I ever need to go.
There's no right or wrong with this decision, cos it always depends on the individuals own personal sense of comfort or security. It's not extremely expensive, but it's not cheap either. It DOES get more expensive as the years go by. Premium costs are adjusted upwards every year.
Moving on to Eldershield...
Ok... simply put, I find Eldershield as it stands now quite useless...
An additional $200-$400 per month for ONLY 6 years... IF the elderly is unable to do 3 out of 6 things...
(washing, dressing, feeding yourself, use the toilet on your own, moving around indoors on your own, and getting yourself from a bed to a chair or vice versa)
Basically, the person is highly immobile.
It's hard for me to like this plan...
What is an additional $200-$400 for only 6 years going to do for me IF I am pretty much immobile?
Premiums aren't really expensive though... around $170 per year if the person starts the policy at 40. Total premiums paid would be around $170 x 25 = $4,250.
Total maximum claim would be $400 x 12 mths x 6 years = $28,800
IF the person is able to fulfill the criteria to claim.
But the problem is... what is this money going to do for me when I can hardly move?
Well, some people think, something is better than nothing... ok, there's some point there. At $170 per year, it's not really expensive.
To me, when I look at insurance, I always think... is this product useful to me. Can it help me when I really need it? If yes, then I will check the price. Then if the price is worth it, then I buy it. Else I won't think about it, regardless of the price.
For me, Eldershield as it stands now, is like that... I find that it provides too little benefit to improve my life IF I become immobile.
Cos there are many many different insurance policies. If I always think... something is better than nothing, then I end up buying a lot of miscellaneous insurance just cos it's "cheap". But that's not the point of insurance. It's not like chicken in the market, when it's cheap, I buy it, I will eat it. Insurance is a probability.
In the case for Eldershield, there is a limit which can be bought.
But if we think, cheap, just buy, something is better than nothing...
Then policies like personal accident, those are cheap and can cover large amounts. We don't just buy large sum assured cos it's cheap right?
So Eldershield as it stands now... or even if they enhance it a bit... I find it doesn't provide enough coverage to be useful. So unless it changes quite significantly, I don't think I'd be interested in it.
BUT... it's cheap and at around $4,250 as of now, buying it wouldn't really impact overall finances for many people.
In the future, WHEN they start premiums at 30 with higher premiums and higher payout, it would really depend on how much the payout is and how much the premiums would be. I hope it would provide a higher payout (which can improve the life of the insured in such a situation) with still affordable premiums.
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