Hospitalization and Surgical (Shield Plan) Insurance

As a continuation to my earlier "As-charged" article, I went on to develop a spreadsheet that is capable of calculating the possible costs of financing a Shield Plan (example of calculation here is for Private Hospital Ward A) that would be needed by someone age 65 now and presumably live til age 85.

The estimated cost (CPF Medisave) would be about $16,800 for most Shield plans (this is so as MOH has capped the annual withdrawal limit at $800). The net present value @4% would be about $11,672.

On the cash portion, the estimated average cost would be $87,629 (cost of shield plan rider and the excess portion which is non-CPF-Medisave-payable). The net present value @4% would be $50,344.

So there appears to be an imbalance in the above equation. In the example above, CPF Medisave can only finance about 16% of the total Shield plan cost. I am wondering if the Ministry of Health can look into easing the $800 cap limit to a level that not only achieves a balance between the CPF Medisave and out-of-pocket cash, but also in the process, help Singaporeans to utilize the CPF-Medisave for the Shield plan that will divert risk of possibly higher medical costs (in the future) to insurance companies.

My next article will be targeted at ways to prepare funding for Shield Plan (65 to 85 years old).
Stay tuned.