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Are Integrated Shield Plans (IPs) Necessary? Comparing Medical Costs Without IPs

profileJoel Koh

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One of the rites of passage to become a functioning adult is to get health insurance.

Source: Giphy

And many have said that one of the key insurance policies you need to get is the Integrated Shield Plan (IP).

But is it really necessary?

Find out right here!

Disclaimer: The Information provided by Seedly does not constitute an offer or solicitation to buy or sell any insurance product(s). It does not take into account the specific objectives or particular needs of any person. We strongly advise you to seek advice from a licensed insurance professional before purchasing any insurance products and/or services.


TL;DR: Are Integrated Shield Plans Necessary? Comparing Medical Cost Without IPs

Plan Type MediShield Life Only (Class C Ward) MediShield Life Only (Class B1 Ward) Integrated Shield Plan (Class B1) W/O Rider Integrated Shield Plan (Class B1) With Rider
Annual Premium (Ages 21 – 30) $252.34 (MediSave) $252.34 (MediSave) $300 (MediSave) + $238 (Cash) $300 (MediSave) + $356 (Cash)
Hospital Bill (Coronary Artery Bypass Graft) $6,528 $35,834 $35,834 $35,834
Claim Computation Amount $6,528 $15,408 (43% of bill) $35,834 (100% of bill) $35,834 (100% of bill)
Less Deductible (Aged <80) $1,500 $2,000 $2,500 $2,500 (Covered by Rider)
Claimable Amount (Less Deductible) $5,028 $13,408 $33,334 $33,334
Less Co-Payment After Deductible (Up to 10%) $426 $652 $3,333 $1,667
Total Bill Paid By Insured $5,454 $14,060 $5,833 $1,667

Source: MOH Fee Benchmarks and Bill Amount Information, MOH and Income
*Figures include GST and are based on the median of actual transacted fees across the medical institutions for each bill component, from 1 January 2021 to 31 December 2021. They therefore provide an estimate of fees but do not necessarily sum up to the total bill amount. Figures in this table will be updated annually.

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Important Insurance Terms to Understand About Integrated Shield Plans

But first some context.

Source: Giphy

You will need to know these important health insurance terms before you purchase an IP. They are Deductibles, Co-Insurance/Co-Payment, and the Pro Ration Factor.

Deductibles represent a fixed amount that you are required to pay towards your medical expenses before your insurance provider starts covering any benefits under the IP policy. The purpose of deductibles is to keep the cost of hospitalisation plans reasonable by shifting some of the financial responsibility to the insured individual. Typically, deductibles are calculated on an annual basis, which means that all qualifying expenses incurred within a policy year contribute towards meeting the deductible amount. But, certain plans may have deductibles applied on a per disability basis.

Co-Insurance/Co-Payment, as outlined in your insurance policy, refers to a predetermined percentage (typically ranging from 5% to 10%, depending on the inclusion of additional coverage options) of the overall medical expenses that you are responsible for paying after meeting the deductible. The purpose of co-insurance is to discourage excessive utilisation of healthcare services. Certain policy riders may offer benefits such as reduced co-insurance and deductibles.

A Pro-Ration Factor is an extra fee (represented as a percentage in the benefits schedule) that you are obligated to pay if you are admitted to a hospital or ward that exceeds the coverage level of your current insurance plan. For example, let’s say you were admitted to a private hospital due to an emergency. But,¬†if you only have MediShield Life which only covers C and B2 Class wards in a public hospital, you will be required to pay the Pro-Ration Factor as an additional charge.

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MediShield Life Explained

Speaking of MediShield Life, let me explain this policy as it is vital to the understanding of IPs.

MediShield Life is a basic health insurance plan, which all Singaporean Citizens (SCs) and Singaporean Permanent Residents (SPRs) are automatically enrolled in.

It helps you to pay for large medical bills and even certain types of outpatient treatment like dialysis or chemotherapy.

At a glance, MediShield Life offers:

  • Better protection and higher payouts, so you pay less MediSave or cash
  • Lifetime protection including coverage of pre-existing conditions.

What Am I Covered Under MediShield Life?

MediShield Life mainly serves as basic health insurance to help Singaporeans defray medical costs.

For instance, its payouts would mostly cover the cost of Class B2 or C wards of public hospitals and subsidised outpatient treatments and day surgeries in public healthcare institutions.

MediShield Life covers both inpatient and outpatient treatments, with its benefits as follows (applicable for admissions or treatments received on or after 1 April 2023):

Inpatient/Day SurgeryClaim Limits
Daily Ward and Treatment Charges(1)
- Normal ward$800 per day*
- Intensive care unit ward$2,200 per day*
* An additional claim limit of $200 per day applies for the first two inpatient days
- Psychiatric (up to 60 days per policy year)$160 per day
- Community hospital (Rehabilitative)(2)$350 per day
- Community hospital (Sub-acute)(2)$430 per day
- Inpatient palliative care service (general)$250 per day
- Inpatient palliative care service (specialised)$350 per day
Surgical proceduresSurgical proceduresABC
- Table 1 A/B/C (less complex procedures)$240$340$340
- Table 2 A/B/C$580$760$760
- Table 3 A/B/C$1,060$1,160$1,280
- Table 4 A/B/C$1,540$1,580$1,640
- Table 5 A/B/C$1,800$2,180$2,180
- Table 6 A/B/C$2,360$2,360$2,360
- Table 7 A/B/C$2,600$2,600$2,600
Implants$7,000 per treatment
Radiosurgery, including Proton Beam Therapy ‚Äď Category 4(3)$10,000 per treatment course
Continuation of autologous bone marrow transplant treatment for multiple myeloma$6,000 per treatment

Source: Ministry of Health (MOH)
(1) Includes meal charges, prescriptions, professional charges, investigations and other miscellaneous charges
(2) Claimable only upon referral from a hospital after an inpatient admission or from a public hospital’s emergency department for further medical treatment.
(3) Refer to the MOH website for approved indications for use of Proton Beam Therapy

Outpatient TreatmentClaim Limits
Cancer drug treatment(1)$200 - $9,600 per month, depending on cancer drug treatment1
Cancer drug services$3,600 per year
Radiotherapy for cancerç
- External (except Hemi-body)$300 per treatment
- Brachytherapy$500 per treatment
- Hemi-body$900 per treatment
- Stereotactic$1,800 per treatment
- Proton Beam Therapy - Category 1$300 per treatment
- Proton Beam Therapy - Category 2$500 per treatment
- Proton Beam Therapy - Category 3$1,800 per treatment
Kidney Dialysis$1,100 per month
Immunosuppressants for organ transplant$550 per month
Erythropoietin for chronic kidney failure$200 per month
Long-term parenteral nutrition$1,700 per month

Source: MOH
(1)Refer to the Cancer Drug List on the MOH website for the applicable claim limit.

However, some might prefer to reduce out-of-pocket expenses when the need arises and enjoy greater flexibility in terms of:

  • The types of hospital ward you can stay in
  • The types of treatment
  • Annual coverage limits.

For reference here is a comparison of the types of facilities you can expect from a Public/Restructured hospital [Singapore General Hospital (SGH)] and a private hospital (Mount Elizabeth Hospital):

Ward Type & Description Rates*
Standard Ward Type C
Up to 8 beds in a room
From $37 per day
Standard Ward Type B2
Up to 6 beds in a room
semi-automated electric bed
From $57 per day
Standard Ward Type B1
4 beds in a room
attached bath room and toilet
television
semi-automated electric bed
choice of meals.
From $268.92 per day
Standard Ward Type A
Single room
attached bath room and toilet
toiletries
television
telephone
fully automated electric bed
choice of meals
sleeper unit for accompanying adult
From $540.00 per day
Private Ward
Free WiFi
Lodger bed cum sofa
In-room safe
Writing desk
In-room telephone
Bath and Toiletries
Ensuite bathroom
Luxury toiletries with plush towels and slippers
Hairdryer
Entertainment
Flat-screen TV
Daily copy of the local newspaper
Food and Beverage
5 nourishing meals per day
Daily meals for 1 companion
Complimentary Services
24-hour in-house security
Daily housekeeping
24-hour nursing services
From $790 per day

*NOTE: Updated as of 1 Jan 2023.

So if you want the optionality and better facilities, you may want to opt for an IP as an add-on to enhance your medical coverage.

How Do I Pay for the Premiums of MediShield Life?

The premiums of MediShield Life are fully payable via MediSave.

Family members such as spouse, parent, child, sibling or grandchild with sufficient MediSave balance can also pay for your MediShield Life coverage.

There are also discounts for MediShield premiums for to lower- to middle-income families with household monthly income per person of $2,800 and below (applicable for renewals from 1 September 2019), and living in residences with an Annual Value of $21,000 and below.

Eligible SCs can receive subsidies of up to 50% on their premiums. However, SPRs will only receive half the subsidy rate applicable to citizens.

The rates are as follows:

Source: MOH

*For those living in residences with AV of $13,000 or less.
Those with an Annual Value between $13,001 to $21,000 will receive 10 percentage points less than these subsidy rates.
Those living in residences with an Annual Value of above $21,000 will not receive these subsidies.
If you own more than one property, you do not qualify for this subsidy.

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What is Integrated Shield Plan?

An IP essentially has two components:

Source: Mount Elizabeth Hospitals

When you sign up for an IP you are paying for the MediShield Life component and an additional private insurance coverage component ‘top up’.

Note: If you are paying for an IP you will still receive subsidies on your MediShield Life premiums if you are eligible for them.

Depending on the type of IP that is chosen, the protection can be enhanced to provide coverage for areas such as hospitalisation benefits, claim limits and coverage for private hospitals and public hospitals (A or B1 wards).

When you purchase an IP, you are already covered by MediShield Life. The insurer that you bought the IP from will be the single point of contact. They will act on the CPF Board’s behalf for premium collection and claims disbursement for the MediShield Life component of your Integrated Shield plan.

But with the increase in coverage, one can expect the premiums for IP to be much higher as compared to MediShield Life.

What Am I Covered Under an Integrated Shield Plan?

Here’s a quick overview of the differences between MediShield Life and an IP:

 MediShield LifeIntegrated Shield Plan
Coverage For Public hospital (B2 or C wards)Private Hospitals
Ward ChoicePublic Hospital B2 or C wardPrivate Hospitals

Public Hospital
-A ward
-B1 ward
-B2 ward
-C ward
Policy Annual Claim LimitUp to $150,000Up to $2,000,000
Amount PayableDeductibles, co-insurance, expenses that exceed the coverage limitDeductibles, co-insurance, expenses that exceed the coverage limit
Additional Coverage-Includes coverage for areas such as pre- and post-hospitalisation treatment, and emergency overseas treatment
P-Includes coverage for areas such as pre- and post-hospitalisation treatment, and emergency overseas treatment

Also, do note that cancer drugs have their own policy year limit as follows:

Source: DBS

However, while MediShield Life covers pre-existing conditions, IP policies might only be accepted if the individual is healthy.

This is depending on the insurer, and applications might be either modified or rejected if an individual has pre-existing conditions.

As such, it is recommended to not switch plans if your current plan covers your pre-existing condition.

How Do I Pay for the Premiums of Integrated Shield Plans?

There are Additional Withdrawal Limits (AWLs) for using MediSave to pay for IPs.

MediSave Withdrawal Limit for Integrated Shield Plan

The AWLs is as follows:

  • $300 if you are 40 years old or younger on your next birthday.
  • $600 if you are 41 to 70 years old on your next birthday.
  • $900 if you are 71 years or older on your next birthday

Each insured person can only have one Integrated Shield Plan paid with MediSave.

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MediShield Life vs Integrated Shield Plans: Claims and Amount Payable

In addition to the difference in premium amounts, there is a difference between what you can claim and the amount you have to pay in the end:

Source: Planner Bee

P.S. The diagram provided is purely for explanatory purposes. Note that pro-ration will be implemented for private hospital bills or public/restructured hospital bills in class A or B1 wards under MediShield Life with benefits sized for class B2 or C ward bills.

Generally, you will pay the least out of pocket if you purchased an IP with a rider, and chose treatment from a panel doctor. This out of pocket amount that you will pay will also vary according to your choice of insurer.

As MediShield Life mainly serves as basic health insurance to help Singaporeans defray subsidised medical costs i.e. treatment at Class B2 or C wards of public hospitals and subsidised outpatient treatments and day surgeries in public healthcare institutions.

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MediShield Life vs Private Integrated Shield Plan: Pro-Ration

The non-subsidised bills are pro-rated before the claims under MediShield Life are computed as follows:

Pro-ration Factors for MediShield Life Claim
‚ÄčWard Class / Subsidy Status Singapore Citizen Permanent Resident‚Äč
Class C 100% 44%‚Äč
‚ÄčClass B2 ‚Äč100% ‚Äč58%
Class B2+ ‚Äč70% ‚Äč47%
Class B1 ‚Äč43% ‚Äč38%
‚ÄčClass A 35% 35%
‚ÄčPrivate¬†Hospital ‚Äč25% ‚Äč25%
‚ÄčCommunity Hospital (Subsidised) ‚Äč‚Äč100% ‚Äč‚Äč50%
‚ÄčCommunity Hospital (Non-subsidised) ‚Äč50% ‚Äč50%
‚ÄčInpatient Palliative Care Service (Subsidised) ‚Äč100% ‚Äč50%
‚ÄčInpatient Palliative Care Service (Non-subsidised) 50%‚Äč 50%‚Äč
‚ÄčShort Stay Ward (Subsidised) ‚Äč100% ‚Äč58%
‚ÄčShort Stay Ward (Non-subsidised) ‚Äč35% ‚Äč35%
‚ÄčDay Surgery (Subsidised) 100% ‚Äč ‚Äč58%
Day Surgery (‚ÄčPublic Hospital Non-subsidised) ‚Äč35% ‚Äč35%
‚ÄčDay Surgery (‚ÄčPrivate¬†Hospital) ‚Äč25% ‚Äč25%
Outpatient Treatment¬†(Subsidised)1 ‚Äč100% ‚Äč67%
Outpatient Treatment¬†(Non-subsidised)1, 2 ‚Äč50% ‚Äč50%
1 Continuation of Autologous Bone Marrow Transplant for Multiple Myeloma will follow the outpatient pro-ration factors

2 Non-subsidised bills for outpatient cancer treatments and home parenteral nutrition will be pro-rated. Bills for dialysis-related treatments and immunosuppressants will not be pro-rated.

Source: MOH

Simply put, MediShield life will cover a larger percentage of your bill if you stay in a lower class ward.

That’s not all.

If you only have MediShield Life, you will need to pay a deductible and co-insurance as follows:

Source: CPF

To add here’s an example from MOH of how MediShield Life’s claims are computed and how much you might have to pay in the end if you opt for a subsidised ward:

Source: MOH

However, if you opt for an unsubsidised ward (Class B1 and above) you will have to pay more as MediSheld Life’s benefits are catered towards class B2 and C wards.

Check out this example provided by MOH for a clearer picture of what this looks like:

Source: MOH

Do note that the deductible will only have to be paid once per policy year. So if you suay suay (Hokkien unlucky) have to visit the hospital again the same year, you will not need to pay the deductible again.

You can actually purchase different tiers of IPs for broader coverage starting with the standard IP which covers B1 wards without pro-ration. Next, you can opt for an A class IP that includes coverage for A wards, and there is even a top-tier option that covers private hospitals. But do note that deductibles and co-insurance still apply.

These IPs offer additional coverage specifically for stays in Class A or B1 wards in restructured hospitals, as well as private hospitals. Additionally, there are riders available to cover the cost of deductibles (the fixed amount you need to pay before your insurance coverage starts) and co-insurance (the percentage you are responsible for after your insurance coverage starts). With a co-pay rider, you can minimise the co-insurance payment to as low as 5%.

But it is important to note that your hospital bill will balloon if you opt for a high class public hospital (B1 or A ward) or private hospital.

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Integrated Shield Plan Comparison 2023

To illustrate the price difference, I will be looking at the example of a Coronary Artery Bypass Graft as heart disease is one of the top causes of death in Singapore:

Plan Type MediShield Life Only (Class C Ward) MediShield Life Only (Class B1 Ward) Integrated Shield Plan (Class B1) W/O Rider Integrated Shield Plan (Class B1) With Rider
Annual Premium (Ages 21 – 30) $252.34 (MediSave) $252.34 (MediSave) $300 (MediSave) + $238 (Cash) $300 (MediSave) + $356 (Cash)
Hospital Bill (Coronary Artery Bypass Graft)* $6,528 $35,834 $35,834 $35,834
Claim Computation Amount $6,528 $15,408 (43% of bill) $35,834 (100% of bill) $35,834 (100% of bill)
Less Deductible (Aged <80) $1,500 $2,000 $2,500 $2,500 (Covered by Rider)
Claimable Amount (Less Deductible) $5,028 $13,408 $33,334 $33,334
Less Co-Payment After Deductible (Up to 10%) $426 $652 $3,333 $1,667
Total Bill Paid By Insured $5,454 $14,060 $5,833 $1,667

Source: MOH Fee Benchmarks and Bill Amount Information, MOH and Income
*Figures include GST and are based on the median of actual transacted fees across the medical institutions for each bill component, from 1 January 2021 to 31 December 2021. They therefore provide an estimate of fees but do not necessarily sum up to the total bill amount. Figures in this table will be updated annually.

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Integrated Shield Plan Premium Increase

But, one important thing to remember is that premiums are more expensive the older you are:

Source: MOH

It’s crucial to consider inflation as another significant aspect. The premiums for insurance policies, particularly IPs, are not static and have been rising every year.

Let’s look at inflation in Singapore.

For the years 2002 to 2022, Overall inflation or the Consumer Price Index (CPI) inflation increased by 44.70% while CPI-Healthcare increased by 53.60%.

On average, CPI inflation increased by 1.86% and healthcare inflation went up by 2.17% over the same time period.

As a result, the premiums you’re required to pay in your 50s would very likely be higher compared to the initial premiums shown when you purchased your IP in your 20s.

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Conclusion

Integrated Shield Plans (IPs) are not mandatory, but they can provide valuable benefits and additional coverage for individuals seeking enhanced healthcare protection in Singapore. While the country’s public healthcare system, MediShield Life, offers basic coverage for all Singaporeans and permanent residents, IPs offer an upgrade by combining private insurance coverage with MediShield Life.

However, it’s important to carefully assess your healthcare needs, financial situation, and consider factors such as cost, coverage, and potential premium increases over time. Consulting with insurance advisors or doing thorough research can help you make an informed decision about whether an Integrated Shield Plan is necessary for you.

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About Joel Koh
History student turned writer at Seedly. Before you ask, not a teacher. I hope to help people make better financial decisions and not let money control them.
You can contribute your thoughts like Joel Koh here.

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