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3 Things You Must Know about the Changes in Hospitalisation Insurance

Insurance, Personal Finance

Written by:

Louis Koay

Hospitalisation insurance is one of the most important insurance that we should have in our life. I always emphasize that we should get the best coverage for hospitalisation insurance because the likelihood of claim and the amount of claim can be large if hospitalisation happen. I’ve shared about different types of insurance and their roles in our life journey to financial freedom.

In the past, the best coverage for hospitalisation insurance that we can have is the 100% as charged coverage option that covers treatment in private hospitals (if you choose to). This means that you can walk into any medishieldlife approved hospital and your hospitalisation or day surgery bill will be 100% paid by the insurance company.

However, this will change from 1st April 2021.

Here are the 3 things that you need to know about the changes.

#1 – No More 100% Coverage

As mentioned above, because of 100% coverage, people tend to overconsume what they are entitled for. You could start blaming that it could be due to overcharging from the medical professionals, or over-consumption from patients by going for unnecessary scans or treatments.

Medicine Drugs Pharmacy is the first aid to get better.

With the full coverage from hospitalisation insurance, the buffet syndrome has certainly causing over-consumption of healthcare services. Government has since stepped in in year 2018 to stop the insurers to provide 100% coverage of hospitalisation insurance.

Although it is only mandatory for those people who purchase the hospitalisation insurance after March 2018 to be in co-payment structure, all insurers have actually changed all the old policy holders who are holding 100% coverage plan to a co-payment insurance.

From 1st April 2021 or from the yearly renewal date of your hospitalisation insurance, all of us will be renewed to a co-payment hospitalisation insurance. (*only company P will still have 100% coverage plan). The co-payment for most insurers is 5% of the total hospitalisation bill.

#2 – Panel vs Non-Panel list of Specialists

To better control the cost of claim and to ensure that the policy holders get the trusted healthcare services, insurers have come out with panel list of specialists for private hospital treatment.

An insurance company can provide better coverage if you choose their panel list of private hospitals. For example, longer pre and post hospital treatment coverage, limit of the co-payment per year.

Besides that, admission to non-panel list hospital may need the policy holder to pay additional payment on top of the typical 5% co-payment.

That said, a handful of private specialists were removed from the Panel which have led to unhappiness across the industry. You’ll need to check if your existing specialist is still within your insurer’s panel.

#3 – Revision of premium

If you are holding the hospitalisation insurance, revision of premium should not be something new for you. As hospitalisation insurance is a yearly renewal insurance, the premium may change every year.

health-insurance

However, there is some good news in this year’s premium revision – some insurers will actually reduce the premium due to the change from 100% coverage to a co-payment coverage.

That said, there are also insurers who have increased premiums due to medical inflation and higher claim ratio. There are even some policy holders may end up with premium based on claim experience. This means that if you claim on your hospitalisation insurance, you may end up paying higher premium.

Most importantly, what should you do?

The change of hospitalisation insurance is certainly not welcome by most people as there will be no more 100% coverage and premiums could be revise to higher amounts and be based on claim experience.

Many people may contemplate to switch to the best hospitalisation insurance. Unfortunately, there is no best plan in this competitive and complex hospitalisation insurance niche. Even if you can find the best plan, the plan is on yearly renewal basis and all the coverage terms, premium amount may change every year.

Also, by switching to a new insurance provider, you may be in the risk that your pre-existing medical conditions are not covered by the new insurer.

My suggestion is to stick to your existing hospitalisation insurance. But at the same time, ensure that:

  1. You acknowledge that there is no more 100% coverage, be prepared to pay for some of the hospitalisation expenses
  2. Know the panel list of private hospitals that are tagged to your insurer. It is best to seek treatment from the panel list for better coverage.
  3. If you cannot afford or are unwilling to pay the higher premium after revision, you can opt to downgrade your hospitalisation plan if you are willing to accept with lower coverage.

All the above are just my personal views and sharing. Please speak to your financial advisor if you need any advice on your insurance. If you need help, please let me know here.

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