The Difference Between Expat And Local Insurance
Can locals benefit? Why would expats need ‘special’ insurance? This article aims to simplify the options available for all.
A HSBC survey conducted on 27,000 expats from 190 countries ranks Singapore as the number one country for expats. A plethora of findings consistently ranks Singapore highly for the myriad benefits available here.
Among the many benefits Singapore offers are its exemplary healthcare facilities. Both expats and the local population know that if it comes to it, some of the world’s most reliable services are available at their doorstep. But not everyone knows how expensive it can be without adequate cover.
The Ministry of Health website provides the indicative rates for various types of surgeries. The following table shows you the amount one can expect to pay for a procedure on an ankle fracture.
|Public hospitals||Private hospitals|
|Subsidised fees||Unsubsidised fees|
|Total operation fees||S$466 – S$816||S$2,358 – S$2,499||S$9,927 – S$15,071|
A review of these figures immediately reveals that:
- If you are eligible to pay subsidised fees, you can reduce your hospital bills significantly.
- Private hospitals are much more expensive than their public counterparts.
Some expats move to Singapore from a country where medical cover is paid for by the government and they may not be aware that it isn’t the case in Singapore. Expats may use both public and private hospitals. However, they are not eligible to get the benefits of Singapore’s subsidised healthcare system, as that it only available to Singapore citizens and permanent residents (PRs).
Given the fact that medical fees are expensive, it is highly advisable that both Singaporeans and expats buy an adequate level of health insurance.
Singaporeans are covered by MediShield Life
Every Singapore citizen and PR is covered by MediShield Life, the country’s basic health insurance plan. It is not necessary to apply for this health insurance coverage since the process is automatic. Insurance premiums are also paid directly from the individual’s CPF Medisave account.
What if the insured person does not have an adequate level of funds in the Medisave account? The government has provided various subsidies to help pay the insurance premium for these individuals. People who are classified as “lower-to-middle-income” and those who live in a residence that has an Annual Value below a certain amount are eligible for these subsidies.
Although, the insurance coverage provided by MediShield Life protects every Singapore citizen and PR, the benefits that it provides are restrictive in certain ways. For example, the insured person is only entitled to a Class B2 or C ward in a public hospital. Individuals who want better facilities can opt for an Integrated Shield Plan (IP).
Here are a list of the different types of IP available.
|Category||Name of Policy|
|Basic plans||MediShield Life|
|Income IncomeShield Plan C*|
|Income Enhanced IncomeShield C|
|Standard Integrated Shield Plan (for Public Hospital Class B1 coverage)||AIA HealthShield Gold Max Standard Plan|
|Aviva MyShield Standard Plan|
|AXA Shield Standard Plan|
|Great Eastern Supreme Health Standard Plan|
|Income IncomeShield Standard Plan|
|Prudential PruShield Standard Plan|
|Class B1 plans||AIA HealthShield Gold Max C*|
|AIA HealthShield Gold Max B Lite|
|Aviva MyShield Plan 3|
|Great Eastern Supreme Health B*|
|Great Eastern Supreme Health B Plus|
|Income Enhanced IncomeShield Basic|
|Income IncomeShield Plan B*|
|Prudential PruShield B*|
|Class A plans||AIA HealthShield Gold Max B|
|Aviva MyShield Plan 2|
|AXA Shield Plan B|
|Great Eastern Supreme Health A*|
|Great Eastern Supreme Health A Plus|
|Income Enhanced IncomeShield Advantage|
|Income IncomeShield Plan A*|
|Prudential PruShield A Plus|
|Prudential PruShield A*|
|Private Hospitals plans||AIA HealthShield Gold Max A|
|Aviva MyShield Plan 1|
|AXA Shield Plan A|
|Great Eastern Supreme Health P Plus|
|Income Enhanced IncomeShield Preferred|
|Income IncomeShield Plan P*|
|Prudential PruShield A Premier|
* These plans are no longer offered to new members. Existing members may continue to renew their policies.
Table 1 Source: MOH
IPs are offered by six approved private insurers. By paying an additional premium, Singaporeans can choose to increase their medical coverage.
At times, selecting an IP can be complicated as there are a host of add-ons that offer various levels of additional benefits. To overcome this issue, it is possible to opt for a Standard Integrated Shield Plan, or a Standard IP.
A Standard IP offers Class B1-level coverage with benefits that are identical across all IP-insurers.
This is what it cost to purchase a Standard IP from the different insurers.
|Age Next Birthday||Standard IP premiums before MediShield Life subsidies (rounded to nearest $)|
|AIA||Aviva||Great Eastern Life||Prudential||Income||AXA|
Table 2 Source: MOH
Expats have different insurance needs
The country’s public hospitals are open to all, though expats would need to note that they are not eligible for the subsidies that are available to locals as they are not required to contribute to the nation’s compulsory health insurance program.
An international insurance policy might be a suitable option, though there are a few points to keep in mind before purchasing one.
- Understand the various types of benefits that the policy provides. Expats who are required to travel frequently out of Singapore, need to ensure that the policy covers the cost for repatriation and any medical expenses that are incurred in the foreign country.
- Ensure the policy covers the medical conditions most needed. Insurers often exclude certain pre-existing conditions within its policy coverage. Expats who may have any existing medical conditions should clarify that their conditions remain within the scope of the policy, and avoid any unpleasant surprises when there is a need for a claim.
- The insurance policy should also be able to cover the other members of the family.
In many instances, employers already provide their employees with a health insurance coverage. However, it may not meet all the needs of each individual employee. If that occurs, it is essential to purchase an additional insurance policy that does.
It is also useful to enquire if the health insurance would remain valid if an expat employee moves back to their home country or gets transferred out of Singapore
For expats who become Singapore Permanent Residents, and subsequently gain coverage from Medishield Life, it would be a good idea to find out how that affects the insurance policy they already have.
Why getting professional advice is essential
Every individual has different health insurance needs, so it is important to understand your specific requirements before finalising a policy.
Frequent travellers require coverage in the countries that they visit, particularly if they travel to the US, as medical costs there are higher.
A health insurance policy is, in essence, a legal document and it is vital that the terms are fully understood. If you are in doubt about a policy that you are planning to purchase, it would be wise to seek the help of a reliable and experienced advisor before finalising your policy.
Disclaimer: The views expressed in this article are those of the author’s. Advice should be sought from a licensed financial adviser regarding the suitability of an investment product before making a commitment to purchase. Past performance is not necessarily indicative of future performance. Any prediction, projection, or forecast on the economy, securities markets or the economic trends of the markets is not necessarily indicative of future performance. Whilst we have taken all reasonable care to ensure that the information contained in this document is not untrue or misleading at the time of publication, we cannot guarantee its accuracy or completeness. The above report may contain data obtained from third parties and as such we cannot guarantee the accuracy of this data.