So you have top-shelf hospitalisation insurance, and you can chill in a private hospital ward with your own TV, and set the air-conditioner to whatever you want it to. Why wouldn’t you do it every time? Well the reason is, there’s a public and a private route to healthcare; and a single digit millionaire may not be wealthy enough to handle being stuck on the private route. Plus, there are some side-bonuses to using a cheaper ward:
A quick overview of health insurance, so you get what we’re talking about
Everyone in Singapore gets MediShield Life, which is a universal life insurance policy. However, there are limits to this policy: usually, the coverage is enough if you stay in a public hospital, in wards of classes C to B2.
If you’re not sure what the wards mean:
- C ward: Usually seven to nine beds, bare-bones amenities
- B1 ward: Six beds, somewhat better facilities (usually still no TV though)
- B2 ward: Four beds, TV, and typically comes with a wider choice of food
- Private hospital room: One to two beds, your own bathroom, your own TV, food choices, and so forth. About as good as it gets.
If you have private insurance though, in the form of an Integrated Shield Plan (IP), you have greater coverage. This can afford you a private hospital ward.
Since the most comprehensive IPs tend to cost a lot, your first instinct is probably to tap that Class A ward whenever you can. But before you do that, know that there are sometimes good reasons to stick with cheaper wards, in a public hospital.
Once you go private, there’s a chance you can’t switch back to public
Here’s something to consider, from a response in Parliament on September 2020:
“To receive subsidised specialist outpatient (SOC) treatment, a patient needs a referral from a subsidised inpatient ward class, emergency department or a polyclinic. Hence, patients who opt for private ward will be considered as private patients and charged unsubsidised rates should they require follow-ups at the SOCs after discharge.”
So say you feel a weird lump in your body somewhere, and you go in with all guns blazing: you pick private treatment first, and stay some time in a private ward. Subsequently, you discover the condition is much worse, and is chronic – it’s something you need to deal with the rest of your life.
Well, future treatments may well be unsubsidised and private; long after you’re out of the hospital. Remember that your IP mainly pays for the hospitalisation – it may not pay for years and years of follow-up treatments needed; something that could plausibly happen with issues like chronic pain, extensive physiotherapy, or certain forms of cancer.
While it’s not impossible to switch back to public (read: subsidised) healthcare, you’ll need to speak to a medical social worker. Your appeal will be considered on a case-by-case basis. And this is why we’re putting this topic on the blog, because let’s repeat this slowly:
Single. Digit. Millionaire.
You’re not rich, but you’re also far from poor – and there’s a much higher chance that your appeal to switch back to public healthcare is going to be denied.
At the same time, unlike your multimillionaire counterparts, you may not be able to cope with a lifelong condition with unsubsidised healthcare.
But wait, you say, it’s equally dumb to pay so much for health insurance but not use it.
That’s also a valid point. So here’s an approach to consider: opt for private healthcare or better wards when you’re fairly sure it’s a simple one-off matter. For something that’s uncertain, you may want to play it safe and start off with public healthcare, in a B2 ward.
For example: if you’ve just had a bad sprain, maybe go ahead and visit the private hospital right away. But if you suspect it’s something much worse, then consider starting off with the polyclinic, or a lower ward class.
That way, if it turns out to be something serious and lifelong (touch wood), you won’t see a chunk of your retirement plans evaporate into pills and syringes.
While you’re consider this, also check your insurance riders and perks
Some insurance policies will cap the maximum you’re liable to pay, such as by limiting it to $3,000 a year. If you don’t want to stress out picking between public and private, you need to make sure you have this in your terms and conditions, or as some kind of rider.
Some policies also give you perks for picking a lower ward class – there are hospital cash allowance policies, which will actually pay you for each day you stay in a lower class of ward. This can be up to a few hundred bucks a day, so it’s not a bad way to leave the hospital having paid $0 in total.
If you have questions about ramping up your insurance this way, let us know at Single Digit Millionaire
