You will be able to list the main uses of MediSave and explain why a bill may not be fully covered.
Linda's mother, 79, spent four nights in a subsidised ward after a fall last year. Linda had always assumed her mother's MediSave would cover any hospital bill, because the balance looked large. When the bill came, part of it was still payable in cash. Her mother had plenty in MediSave. The cash was due because of how MediSave pays, not because the account was empty.
This lesson covers what MediSave pays for and why a bill can leave you with cash to find even when your balance is healthy.
MediSave is for approved medical expenses. The main uses fall into three groups.
Hospital stays and surgery come first. MediSave can pay for inpatient stays in public and private hospitals, day surgery, and approved procedures. Inpatient and day surgery bills are where most MediSave money goes.
Approved outpatient treatment is the second group. This covers a set list of treatments that are expensive and recurring, such as chemotherapy, radiotherapy, dialysis and some scans, along with some outpatient treatments at polyclinics and approved GP clinics.
Chronic conditions, screenings and vaccinations are the third. MediSave can pay part of the outpatient bills for managing approved chronic conditions such as diabetes and high blood pressure, and for some recommended screenings and vaccinations. Older members can also use their MediSave for a wider range of outpatient bills under a separate scheme. These uses come with their own yearly limits.
MediSave also pays insurance premiums, which lesson 5.2 covers, and it can pay for approved bills of close family members, which lesson 5.3 covers.
Every use of MediSave has a withdrawal limit: a cap on how much MediSave can pay for that type of treatment. For a hospital stay, there is a daily limit for the stay and a separate limit for any surgery, set by how complex the operation is. For outpatient treatments and chronic conditions, the limits are set per treatment or per year.
The limit applies whatever your balance. Someone with S$70,000 in MediSave and someone with S$7,000 can draw the same amount for the same bill. Anything above the limit has to be paid another way: by insurance, by cash, or in some cases from a family member's MediSave within the same limits.
Here is how it worked for Linda's mother, with made-up figures and invented limits. After MediShield Life had paid its share, S$3,200 of the bill was left for the family. Suppose the limits were S$300 a day for the stay and S$1,000 for the procedure she had. Four days at S$300 is S$1,200, plus S$1,000 for the procedure, so MediSave could pay S$2,200. The other S$1,000 was cash.
The limits are designed to stop MediSave from being drained by any single stay, so that money remains for later needs and for premiums. That is a sound aim, but it means cash is still part of healthcare planning, even for people with full MediSave accounts.
MediShield Life and any Integrated Shield plan pay their share of a large bill first, subject to deductibles and co-insurance. MediSave is then often used to pay the deductible and co-insurance, within the withdrawal limits. Cash covers whatever is left. For small bills below the deductible, insurance pays nothing, and MediSave and cash do all the work.
How shield plans, deductibles and riders work in detail is taught in Insurance Decoded, module 4, Pick hospital cover you can keep paying for. This module stays with what MediSave can and can't pay.
Withdrawal limits are set by the Ministry of Health and revised from time to time, sometimes as part of wider changes to healthcare financing. Don't plan around a figure you heard years ago. The MOH website and cpf.gov.sg list the current limits for hospital stays, surgery, outpatient treatments and chronic conditions.
Hospitals also give an estimated bill before a planned admission, which shows the expected MediSave and cash amounts. If you are planning a procedure for yourself or a parent, ask for one.
Linda now keeps a small cash reserve labelled for her mother's medical bills, alongside her own emergency fund. She set the amount after looking up the limits for the most likely treatments.
Look up the current withdrawal limit for one hospital stay and one outpatient treatment that you or a family member might need. Then work out what cash would still be due for a typical bill, using the limits you found.
Look up the withdrawal limit for one hospital stay and one outpatient treatment and write what cash you might still pay.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).