This week, a small bunch of people have started receiving letters about paying extra premiums for MediShield Life to cover their serious pre-existing conditions. And perhaps it is a good time to talk about MediShield Life.

What is MediShield Life?

MediShield Life is really a nationwide health insurance scheme that replaces the old MediShield. Previously, MediShield was meant to help cover for large hospital bills and outpatient treatments as well as for subsidised treatment at Class B2/C wards in public hospitals. Those that would like to stay in B1 or A class wards had to purchase additional private insurance or pay more of their bill through Medisave or cash.

Now, with MediShield Life, it’s a lot of the same but different. There will be higher claim limits and lower co-insurance rates so that hopefully people need to pay less in cash or through Medisave. The caps for many types of claims were significantly increased, ranging from 33-70% increases. But naturally, these things come with a cost. Similar to many leftist policies worldwide, the national health insurance scheme will cost extra for everyone.

But most importantly, everyone will be covered under MediShield Life. This even includes those who are currently uninsured and have serious pre-existing medical conditions or are insured with exclusions under MediShield.

So who pays more?

Most news reports have not actually mentioned this clearly but everyone will have to pay around 3 per cent more in MediShield Life premiums this year but the government has actually noticed the need to provide financial assistance to everyone in the early stages. Over the next four years, the government is providing some transitional subsidies for all Singapore citizens, no matter the person’s personal income level, household income or residence. These will apply for all Singaporeans whose net premiums increase even after taking into account the Pioneer Generation and Premium subsidies.

1st year 2nd year 3rd year 4th year
Transitional Subsidies on net increase in premiums 90% 70% 40% 20%

There are also subsidies for the lower-income and middle-income Singaporean households depending on the annual value of their housing and income level. Most important of all, these subsidies will continue to apply even after the first 4 years.

1427311798069

Source: MOH

Hence, for example, a HDB dwelling couple with a household income of about $6,000 would actually be looking at paying the following in premiums over the next few years.

2015/16 2016/17 2017/18 2018/19 2019/20
MediShield Life Premiums $195 $195 $195 $310 $310
Premium Subsidies -$0 -$0 -$0 -$0 -$0
Transitional Subsidies -$116 -$90 -$52 -$41 -$0
Annual premium payable $79 $105 $143 $269 $310

For those that have serious pre-existing conditions, about 25,000 people will need to pay 30% Additional Premiums for 10 years to reflect the higher health risks associated with their conditions.

Now, the all-important question is… Do you have to fork out money for this?

For most of us, the answer is probably no. Medisave can be used to pay the MediShield Life premiums in its entirety. Hence, many Singaporeans should not need to take out money from their wallets to pay for the increased medical coverage.

Additionally, family members can also use their Medisave to pay for another immediate family member’s MediShield Life premiums. But those who cannot afford to pay the premiums will still be covered under the scheme, with additional subsidies being handed out to those in need.

And so, the biggest point (tl;dr) of this policy is that everyone will be covered with health insurance. Everyone will share the burden of having these healthcare benefits by paying 3% more, the 1% with serious pre-existing healthcare conditions will pay 30% more and the government will cover the rest.