Medical Care in Singapore is expensive.
According to an article published by Straits Times in 03 Nov 2020, from 2012 to 2017, Singapore’s national healthcare expenditure increased from $13 billion to $22 billion, at a rate of about 11% each year,
The key drivers of rising healthcare costs are Singapore’s ageing population, along with medical advancements and increased operating costs. Although medical technology advancements have allowed some previously untreated conditions to become treatable, older and cheaper treatments may have been replaced by better but more expensive ones. In addition, operating and manpower costs are likely to increase over time.
To prevent our retirement funds from being “exhausted” by unforeseen medical expenses, it is important for us to plan ahead.
Reduce Your Risk
Prevention is better than cure. It is recommended to reduce risk by cutting down unhealthy habits (eg. smoking, drinking, over-consumption, etc). It is also a good idea to eat healthy food and exercise regularly. There is a lot of information online, on how to improve one’s health through proper lifestyle habits.
Transfer Your Risk
As nobody can predict the future, you should consider transferring your risk using insurance and other schemes. The most common types of health insurance in Singapore would be MediShield Life and Integrated Shield Plans, as well as CareShield Life and CareShield Supplements.
MediShield Life and Integrated Shield Plans
MediShield Life is a basic health insurance plan, administered by the Central Provident Fund (CPF) Board, which helps to pay for large hospital bills and selected costly outpatient treatments, such as dialysis and chemotherapy for cancer. It is structured so that patients pay less MediSave/cash for large hospital bills.
While most Singaporeans and PRs are covered by MediShield Life, it only provides a basic level of hospitalization and surgical cover. It is recommended to supplement MediShield Life with Integrated Shield Plans (IP) offered by private insurers if you have the budget. Some benefits of IPs include higher claim limits and choice to upgrade your ward entitlement up to a private hospital with 1-bedded room for better privacy and comfort.
You can read more about MediShield Life and IPs here:
CareShield Life and CareShield Supplements
CareShield Life is a long-term care insurance scheme that provides basic financial support should Singaporeans become severely disabled, especially during old age, and need personal and medical care for a prolonged duration (i.e. long-term care).
Long-term care can be described as a variety of services necessary for someone who requires some form of daily ongoing assistance due to a chronic illness or other debilitating condition. These conditions would prevent a person from performing such daily activities such as eating and drinking, bathing, dressing, toileting and rising in and out of a bed or chair. These activities are known in the industry as Activities of Daily Living (ADL). While most commonly associated with the elderly, these conditions could occur at any age.
For Singaporeans or PRs born in 1980 or later, you will automatically be covered by CareShield Life on 1st Oct 2020 or when you turn 30, whichever is later, regardless of pre-existing medical conditions and disability.
For Singaporeans or PRs born in 1979 or earlier, your participation in CareShield Life is optional, and you can choose to join CareShield Life, regardless of your age, as long as you do not have pre-existing disability. If you are born in 1970 to 1979, insured under ElderShield 400, and are not severely disabled, you will automatically be enrolled in CareShield Life from 1 December 2021
CareShield Life provides Monthly Payouts which start at $600/month.
For those who consider $600/month to be too little, they can enhance that amount by purchasing a CareShield Supplement from private insurers.
You can read more about CareShield Life here:
Conclusion
Medical Care in Singapore is expensive and we should plan ahead for for Medical Care Needs during retirement. These may include improving your health through healthy diet and exercise, and getting sufficient insurance coverage for yourself (and your family).
If you need advice on planning for Medical Care needs during retirement, book an appointment with our experienced Financial Planners from FLA Organization for more information today.
