Recently a friend of mine came to me asking about medical insurance. What happened was that a close colleague of his was diagnosed with cancer and chalked up a huge medical bill for the treatment.
His colleague initially thought his insurance plans would be able to take care of most of the bill, but unfortunately he realized it was not so. His family ended up having to fork out a significant amount of money which was drained a large portion of their savings.
After hearing about what his colleague went through, my friend got worried about whether he was adequately covered for medical bills. Being a responsible husband and father, he wanted to make sure that should illness happen, he can afford good medical care without worry and not burden his family with his medical bills.
Although my friend already has some insurance policies, he was not sure if he was really fully covered or whether did he overlook any areas like what happened to his colleague.
My friend’s concerns are understandable. While most Singaporeans already have some form of insurance, there are often some questions lingering at the back of people’s mind
“Am I fully covered? Will it be enough if something happens?”
If you have been wondering if your insurance covers you fully, here are some tips on what to watch out for
1) Check the coverage limits of your hospitalisation plans
Hospitalisation plans or hospital and surgical plans are those that help to pay for hospital related expenses such as surgery, treatment costs and hospital stay. The amount that your hospitalisation plan will pay depends on the coverage limits.
Some key areas to consider are:
- Can you choose to seek treatment in private hospitals or only government hospitals? And are there any restrictions on the type of ward you can stay in?
- How much of the bill can you claim for? Are you able to claim for the entire bill – what is commonly termed “as-charged”; or are there sub-limits for each bill item e.g room and board charge, surgery claim limits etc.
- Does your plan cover your bills fully from the first dollar or are there any co-payments that you still need to make?
- What is the annual limit that you can claim up to? Is there any lifetime limit?
If we are not aware of what the limits are and sought treatment in a hospital where the bill exceeds these limits, then we may have to pay for the excess amount out of our own pocket.
This reminds me of a lady who recently lamented to me that she could only claim $5,000 out of a $25,000 bill from her father’s Medishield. The reason is because her father had to be treated in a private hospital; while Medishield is designed to cover for hospitalisation bills incurred in a Class B2/C ward of a government or restructured hospital.
At my Managing Healthcare Costs talk, I share about the common blind spots that people have about medical insurance and how to avoid making costly mistakes like these. By understanding the limits of our current plans, we can then make informed decisions to either choose a suitable hospital within the coverage limits or take preventive steps to secure better coverage with higher limits.
2) Understand the conditions under which you can claim from your critical illness plans
Many people buy critical illness plans with the expectation that they would be able to claim a sum of money to help with their medical expenses if they are struck with a critical illness.
However, what many people do not realise is that they will only be able to claim from the plans if the critical illness meets the definitions stated in the policy.
Just like the case of Ms Theresa Tan who had 3 critical illness policies but realised she couldn’t claim from any of the plans when she was diagnosed with breast cancer (read more here) The reason was that her policies only pay out upon later stages of critical illness; and her cancer was diagnosed at early stages which didn’t meet the policy’s definition.
So the question is - what are the conditions and definitions for your critical illness plans? Will you be able to claim from your plans if an illness e.g cancer is diagnosed at early stages? Or will the plan pay out only if the condition has reached a more serious stage?
Ms Tan shared her story in the papers because “I hope that telling my story will create more awareness. I tell my friends to check their coverage and make sure they are covered in full”
Some people may have never thought of checking their coverage because they feel that they should be fully covered since they already have many policies. While this may be the case, it pays to be sure and there’s no harm doing a check to confirm.
Once we understand our existing medical insurance coverage and get clear on whether there’s any gaps, we can then take the necessary steps to prepare ourselves adequately and get a peace of mind.