When MediShield Life starts later this year, it will provide everyone, both sick and healthy, with cradle-to-grave health insurance cover. There will no longer be any lifetime limits, and benefits and premiums will be higher than under the current MediShield.

This has caused many people who are currently on the Integrated Shield Plans (IPs), which cover them for more than subsidised hospital care, to ask if they can drop these additional plans which have higher premiums, and simply rely on MediShield Life. There are five insurers - AIA, Aviva, Great Eastern, NTUC Income and Prudential - that offer three categories of Integrated Shield Plans or IPs: for treatment at private hospitals; public hospital A class; and public hospital B1 class. Public hospital B2 and C class wards are heavily subsidised and can be covered by the basic MediShield Life.

Today, six in 10 people on MediShield have IPs. Some certainly should continue with their IPs while others would do better to downgrade to the basic MediShield Life. Senior Health Correspondent Salma Khalik gives some pointers to help you decide which route to take if you are currently on an IP.

For those aged 40 years and younger

Up to the age of about 40 years, the premiums for IPs are relatively low, as younger people are less likely to require expensive hospital stays. This reason alone makes IPs worth considering, especially if you do not have company health cover.

Current premiums range from $78 to $383 a year, but will rise when MediShield Life starts as all IPs have to incorporate it. MediShield premiums are $50-$105 today but will rise to $130-$310 a year when it becomes MediShield Life. Those who do have good hospital coverage provided by their employer should look at considerations for older workers.

Workers aged between 41-65 years old

Premiums start going up rather sharply from the age of 41 years as that's the age when people start getting chronic problems like blood pressure and high cholesterol levels which put them at higher risk of serious illness. That is also when the incidence of cancer and diabetes starts to climb.

IP premiums range from $631 to $1,667 a year. While these premiums might still appear pretty affordable as up to $800 can be paid with Medisave money and they are still drawing a salary, it is time for those who have hospital cover from their employer to ask themselves the following question: What class of ward am I likely to use after I retire?

This is because, for them, it is only after they retire and no longer have company health coverage that MediShield Life of IP becomes their main health insurance.

Remember that insurance, unless you also buy a rider, does not pay the whole hospital bill.

The deductible, or the initial amount the patient needs to pay, ranges from $1,500 to $3,500 depending on the ward class. There is also a 10 per cent co-insurance for the rest of the bill that the patient needs to pay for.

Many patients take stock only at the point of admission.

Today, 60-70 per cent of people with IPs pegged at private hospitals or public hospital A class ward choose a lower hospital class than their insurance entitles them to - which essentially means that they have chosen the wrong IP and have been paying higher premiums than they needed to for years.

Another thing to look at is not the premiums you are currently paying, but the amount you will need to pay a decade or two after retirement. One in three people aged 65 is expected to live beyond 90 years. Would you be able to afford those premiums then?

If the answer is no, then do you want to pay high premiums up till the point when you cannot afford them, or downgrade early and save on a lot of money in the coming years.

Retirees

If you have retired and need to be more careful with what you spend, you too should look 10-20 years down the road and see if the premiums are likely to remain affordable.

Remember that the premiums are also likely to rise as cost of health care goes up, so the premiums you will need to pay in future will be higher than what you see charged for older people today.

Now, the highest premiums for private hospital plans is more than $8,000 a year. It is about $5,000 a year for B1 plans. MediShield Life premiums for people 65 years and older will hold steady for at least five years at $815-$1,530 a year before subsidies.

People who should not downgrade

If you are already suffering from a serious long- term ailment and are already collecting from the insurance, you probably should carry on to ensure that your coverage is not reduced. This applies to people of all ages.

Another group that might want to hang on to their IPs are diabetics with a high potential for kidney failure. If you qualify for subsidised dialysis, MediShield Life is enough. If you don't, you will need dialysis at a private centre.

B1 and A class plans that say they cover dialysis "as charged" refer to public hospitals and institutions only, but there are currently no public institutions offering private dialysis.

Switching between Medishield and IPS

Downgrading from an IP to the basic MediShield is never a problem and can be done any time. But moving to a higher plan will depend on whether you have any pre-existing medical problems that will result in exclusions in your coverage. The older you get, the more difficult it will be to change to a higher plan.

What if I'm not sure?

In that case, the best thing to do is to hang on to your current plan for one more year. When MediShield Life is launched, the IPs will revise their premiums. By early next year, the picture will be clearer and you can then decide on the best scheme for you and your family.

salma@sph.com.sg

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@STHealth