How to pay virtually nothing for your medical expenses

Recently I had a few calls coming in enquiring about medical expenses. As such I thought it would be useful to share this information with my readers.

To start off, I'm sure you have seen someone who was hospitalised for a seemingly minor treatment, which still required a few thousand bucks? Or someone who had gone through a major surgery which set him back tens of thousands of dollars?

'Bill shocks' are common when it comes to medical bills as one would not know how much they would incur. And as one of my client said, you really do not know when you'll be making a visit to the hospital, as these things can hit you overnight.

Fret not. With a well structured medical expenses protection plan, you can leave your bills to be paid by the insurer and not to worry yourself with unnecessary financial burden.

STEP ONE - Upgrade your Medishield

Get yourself a Medisave-approved Integrated Shield Plan. Currently the 5 insurance companies that offer this plan are Prudential, Great Eastern, NTUC Income, Aviva and AIA.

A good medical plan must contain the following features
- cover on an 'As Charged' basis
- provide lifetime coverage
- guaranteed renewable
- high policy year and lifetime limit (preferably adjustable upwards for medical inflation)

Having such a plan is critical as your Basic Medishield (the default national medical insurance scheme) contains lots of claim limits, which may cause you to pay a lot more than the insurance does. (see below)

Depending solely on your Basic MediShield can be financially devastating.

Most insurance companies offer 'As Charged' plans nowadays, which means they do not impose inner
limits within each claimable item. Rather, they will consider the entire bill amount 'as charged' by the hospital, and hence the name.

You wouldn't want your medical cover to stop when you are older and need it the most right? With the Basic Medishield, your cover stops at age 75 and then you're on your own. In contrast, most private medical insurance plans cover your entire lifetime as long as you pay premiums.

Guaranteed Renewability is one of the most important features in a Shield plan. Imagine having made a claim and the insurance company refuses to accept you on next year's renewal due to poor health. And then you're left uninsured and uninsurable. Guaranteed Renewability prevents this problem from happening as it is stated clearly in the contract that the insurance company must renew your policy as long as premiums are paid. This is the greatest peace of mind knowing that your cover will be intact regardless of your future health conditions.

Having a high policy year and lifetime limit is also important as in the event of a critical medical condition, especially when one stays in the Intensive Care Unit or High Dependency Ward, bills can skyrocket to hundreds of thousands of dollars. You need to ensure that your medical plan is robust enough to withstand such high claims.

Medical bills chalked up to be $41,000 in 3 months

As all CPF members contribute to Medisave, you should be able to use your Medisave savings to pay for the premiums of the Integrated Shield Plan of your choice. However, do note that there is a Medisave withdrawal limit for higher ages and you may have to top up some cash for the annual premiums.

STEP TWO - Add in a Complementary Cash Rider

Having an Integrated Shield Plan is not the end of the road. To be fully covered against medical bills, you need to add on a cash plan that is available as an add-on (or often known as 'rider', as it 'rides' on the main plan). Note that you cannot use the Medisave savings to pay for this plan.

Why is it important that we add on the cash rider?

Firstly, you need to understand what 'Deductible' and 'Co-Insurance' are.


Deductible is the amount that is 'deducted' from the claimable amount first, before the remaining bill is considered by the insurance company for claim. This is similar to the 'excess' for motorcar insurance. The Deductible would have to be paid by yourself, either using Medisave, cash or both. .

Deductible amounts (per policy year) are usually as follows:

Private Hospital - $3,000

Public (aka 'Restructured') Hospital:
- A Ward - $3,000
- B1 Ward- $2,000
- B2 Ward - $1,500
- C Ward - $1,000

Should your bill fall below this amount, you would have to bear your entire bill yourself. For example if you stay in a private pospital (with Deductible of $3,000), but your bill is only $2,500, your bill is not claimable as it is lesser than the Deductible amount for a private hospital ward.


After deducting the Deductible (pun intended) from your medical bill, you would still be required to co-pay a percentage of the remaining bill. Usually this is 10%, but it may differ for different plans. Note that unlike Deductible, this is a variable amount. 10% of a large bill can be a lot of money!


Assume your medical bill is $10,000 and you stay in a Private Hospital.

$10,000 - $3,000 Deductible - $700 Co-insurance (10% x $7,000) = $6,300 claimable from insurance company.
You would have to pay $3,000 + $700 = $3,700 yourself.

By adding on a cash rider, you can effectively have the plan covering your Deductible and Co-insurance, thus avoiding the situation that you have to fork out money for these costs.

Many cash riders on the market also provides for other miscellaneous coverage such as daily cash benefit, outpatient medical treatment, TCM treatment, etc, which makes it really good value for your money.


There is no Step Three! Just wait for your cover to be activated (this takes about a month as this application has to go through CPF approval) and remember to pay your premiums on time.

There you go, your medical bills have been effectively reduced to just a couple of hundred dollars a year (i.e. your premiums).

P/S: Terms, exceptions and exclusions do apply. Read your policy documents carefully to understand what they are. The above is meant to be a sharing of knowledge for general use and it is not intended to be a substitute for professional advice. Always consult a qualified insurance advisor regarding your policies.

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