The cost of healthcare in Singapore has been on the upward trend for years, and according to the 2017 Aon Global Medical Trend Rates Report, the country’s gross medical inflation rate last year was at its highest at 15%. This is approximately 5.5 times the annual inflation rate of 1.7% and nominal wage increment rate of just 2.7% (in 2015-2016, for Singapore residents).
Furthermore, research has shown that medical cost escalation is imminent due to global population aging, overall declining health, poor lifestyle habits becoming pervasive in emerging countries, continuing cost-shifting from social programmes, and increasing utilisation of employer-sponsored plans. Are you prepared for the future? Are you aware of the steps you must take to ensure that you and your family are financially secure in the times of medical needs?
What does this mean for you?
Think of this scenario: A bill for Angioplasty at the National Heart Centre (with hospitalisation in an A-class ward) cost S$25,226 in February 2017.
Fast forward 10 years later, and at the current medical inflation rate, this same procedure will cost a whopping S$102,053. Even with a conservative prediction of just 8.1% (the global medical inflation rate for 2016), the medical bill for the same treatment will still come up to S$54,967—more than double the amount you pay today.
How ready are you?
Despite the alarming numbers, medical inflation rates are still expected to keep increasing year on year. To ensure that you attain the financial security you need in an event of a medical need now or in the years to come, here are a few tips on how you can build a sustainable medical insurance plan:
Understand your needs and your wants
Do you need to choose your own doctor or specialist?
If you opt for subsidised care, you do not get to choose your attending physician. This means you may receive care from inexperienced doctor, or simply someone with whom someone you may not be comfortable. Whatever the reason, it’s always best to be in the care of a competent doctor with whom you’re most comfortable.
Do you want to share a room with five other patients? Or would you prefer a quiet and air-conditioned private room?
While you’re more likely to terminate an insurance policy if the premium is more than what you can afford, the fact remains that you’re most likely to require this insurance in times of financial difficulty so as to cover your medical costs. Having said that, it’s important to align your needs with your affordability—both in terms of the medical care you expect as well as the insurance to cover it.
Ask the right questions
Is my coverage sufficient now? Will it be enough when I am older?
It’s important to review your family’s medical insurance plan with reputable brokers who will put your interests first. Subsequently, you should review your medical insurance plans once every 3 years, so that you can be assured that your cover remains sufficient even as your needs and life situations change.
Am I getting a value for the premiums I pay?
Make it a point to understand the kind of coverage you’re getting from the premiums you pay. Ensure that the plans you buy cover what you need, and more importantly, don’t include components you don’t need.
What are the features and benefits, as well as limitations of my plans?
Ask your advisor about the claim process, and understand all the restrictions of your plans so that you can make the best use of them,
How are my plans being underwritten?
“Full medical underwriting” means the insurer will check on your medical history and pre-existing medical conditions you may have before approving you for the plan, and may choose not to cover you for certain conditions from the get-go. “Moratorium underwriting”, on the other hand, means that the insurers accept you for coverage first and ask questions later (during claims), which could leave you out of pocket for a longer period as the whole process is drawn out.
While medical insurance can be both confusing and an emotionally-charged area to think about, an expert will be able to support you in incorporating a review of strategy into your medical plans. Start a conversation with one today!