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Cover complicated, costly pregnancies
MY WIFE who was 25 weeks pregnant with our second child suddenly lost a lot of blood and almost lost consciousness recently.

A shock awaited us when she was registered at KK Women’s and Children’s Hospital, and I had to select the class of ward for her stay.

The staff told me that if my wife had to undergo premature delivery, the cost could range from $60,000 for a C-class ward to $180,000 for an A-class ward. This is a massive burden, especially for low-income families.

I checked my company insurance and our MediShield coverage. Neither included premature delivery or complicated deliveries. Resorting to our Medisave accounts may potentially wipe out all savings there.

The Government can do more to alleviate the potentially massive financial risk couples face in complicated pregnancies.

Perhaps a co-insurance scheme like MediShield for pregnant women should be introduced, of which the basic tier of coverage must be mandatory.

Mothers can choose to upgrade the policies if they prefer and Medisave can be used to pay for the premiums to minimise the financial impact.

To ensure that the scheme is not abused, claims should be made only for complicated pregnancies with the usual co-payment and deductible caveats in place.

I read with horror about the possible costs for a complicated pregnancy. It would indeed cripple any family for many years before they can finish paying off the bills, not to mention paying off interests generated on the loan taken just to pay the hospital. $180,000 for a class A ward? That can bring 3 people through an NUS MBA course, 6-7 people through a normal degree course in NUS!

But thankfully, such costs could have been prevented earlier. While basic Medishield is insufficient (totally useless in my opinion), private insurers have for long introduced private shield plans that cover all hospitalization and surgery expenses, including complications arising from pregnancy. Such plans are fully payable by Medisave.

Let’s take a look at how much we can deflate the bill by:

Class A Bill: $180,000
De-ductible (To be paid by self): $3000
What is left: $177,000
Co-insurance (10% of what’s left): $17,700

Total to be paid by self: $20,700
Total covered by Insurance: $180,000 – $20,700 = $159,300

Of course, this is a general method of calculation. Deductible and co-insurance amounts depends on the class of ward that you stay in. If you would like to cover even the co-insurance and deductible, then purchase an extra rider plan. However this plan is payable monthly in cash, while the basic private shield plan is payable yearly using Medisave CPF.

Let’s look at the afford-ability of the plans:

Assuming that your wife gives birth below 36 years old, 7% of your wife’s wages go into Medisave. Information obtained from CPF Website. Please read the site for greater detail. 🙂

Let’s just shallowly look at one insurer, Great Eastern from this site here.

If you are 31-40, you pay $164.46 a year for class A ward, $128.09 for class B ward and $217.44 for private hospitals. This is for the first year, and there is a 5% discount whenever you renew the policy every year. This works out to $206.56 for private hospitals, $156.23 for Class A wards and $121.68 for Class B wards.

Since we are talking about whether we can afford such a plan, let us look at the cheapest, $121.68 for Class B wards. 7% of your wages going into Medisave for someone who earns $1500 a month would yield $105 into Medisave. (For people earning less than $1500, the figures would change). Hence in a year you would have contributed $1260 into Medisave. This is more than enough to pay for a basic shield plan, and the savings you have could be stored to pay for premiums when they rise. According to the GE website, the premiums for age 61-65 is 696.08. Hence even if wages remain the same, you can still pay for the premiums.

This is some basic financial planning that everyone should consider getting. If my wife has complications, the last thing I want to worry about is the bill. Since you cannot withdraw Medisave money until you die, you might as well use it to pay for better insurance coverage. At least your bill would drop by a significant portion. This is assuming that you do not have spare cash for the rider. If one earns enough, the rider is a good option too.

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