Should I buy Integrated Shield Plan until 99 years old?

Tuesday, March 27, 2018 Jes Finance , Insurance 10 Comments

Thanks to Ray, he pointed out I should expand my price comparison of different shield plans to age 75 and up. I can't remember why I stopped at 75 years old, but I probably followed AIA's tables, which only covers up to 75 years old.



In any case, it got me thinking if I would keep buying integrated shield plan if I live till 99 years old.

I wrote in another post debating whether people should buy term plan up till 99 years old. In short, you probably don't have to keep paying for insurance and can stop once you retire. For hospitalisation plan or Integrated Shield Plan, the circumstances seem different.

For one, people will have a higher chance of hospitalisation when we are older. How much higher? Luckily for us, MOH has release this figure annually.

Rate Per 1,000 Resident Population in 2016

Above the age of 4, looking at the total which is the last column, the percentage is less than 10% until 50 years old. It increased to 20% at the age of 60, 30% at the age of 70, and more than 50% from 80 years old onwards. Looking at this, I am tempted to only buy integrated shield plan from 50 years old onwards. No wonder it's below $1000 to get riders or full coverage below 50 years old.

Let's try to check out the average hospital bill charges.

The figures below are taken from MOH website and is the 2015 figures for the average hospital bills, unfortunately they have stopped publishing it now. Based on Ward B2, the average bill size is $2,667. With a deductible of $1,500 for staying in Ward B2 and below, and 10% of co-insurance based on $2,667, the bill without an Integrated Shield Plan is $1,500 + 266.7 = $1,766.7. Thus on average, be prepared to pay around $1,766 per hospital visit after deduction of Medishield Life.

Private Hospitals
The average hospital bills out of all these privates hospitals listed below, including both medical and surgical bills, is $13,358. Cancelling out the charges that would have been incurred in Ward B2 at $2667 and with a deductible of $2,000 plus 10% co-insurance based on $2,667 at $266.7 , the bill without an Integrated Shield Plan is $13,358 - 2,667 + 2,000 + 266.7 = $12,957.7. This is the average hospital charges if you intend to stay in private hospitals.

Private hospitals. Left side is medical bills while right side is surgical bills.

Government Hospitals (Up to Ward A)
The average hospital bills out of all these hospitals listed below, including both medical and surgical bills, is $8,462. Using the same formula as above, $8,462 - 2,667 + 2,000 + 266.7 = $8061.7. This is the average hospital charges if you intend to stay in Ward A.

Government hospitals (Ward A). Left side is medical bills while right side is surgical bills.

Government Hospitals (Up to Ward B1)
The average hospital bills out of all these hospitals listed below, including both medical and surgical bills, is $7,327. Using the same formula as above, $7,327 - 2.667 + 2,000 + 266.7 = $6926.7. This is the average hospital charges if you intend to stay in Ward B1.

Government hospitals (Ward A). Left side is medical bills while right side is surgical bills.

For the prices of Integrated Shield Plans from different providers, your premiums will increase as you age. It may seem more expensive to continue but you are more likely to claim these hospital bills. If you take the probability of admittance into a hospital by age multiply by the average hospital bill, the premiums look about right.

AXA (yellow boxes) is the cheapest while NTUC(orange boxes) is the second-most affordable

The most affordable premiums seem to differ with age

NTUC is still able to provide one of the cheapest premiums

I have no clear answer if you should buy Integrated Shield Plan until 99 years old. The main questions would be:
1) Are you able to afford it?
2) Do you have to stay in private hospitals or better wards?

If yes to both, then you should continue to buy Integrated Shield Plans. Please take note that the prices listed in the table are due to change due to the government recent announcement about the compulsory 5% co-payment.

What this means for me

I don't think I will continue to take up my current plan which is the 100% coverage in government hospitals up to Ward A till 99 years old. When I am retired, I may not be able to afford the integrated shield plan but that's ok. I can opt to stay Class B2 and below and with Medishield Life, the annual deductible and co-insurance are actually not too costly. For example, in emergency cases, I might have $100,000 hospital bill. With deductibles at $2,000 + (3% x 100,000) co-insurance = bill is  $5,000 which is not as expensive as the integrated shield plans as I aged.

Don't forget that $100,000 is probably a pretty hefty sum to begin with. However, there might be incidents of repeated hospitalisation and more severe cases so do consider carefully. Probably if I can afford, I will buy integrated shield plan. If not, it's ok too, just go with Ward B2 and below.

Don't waste your hard earned money and put them into the pockets of insurance agents. Think carefully what you are buying.

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