Unforeseen Risk in My Medical Insurance

Insurance should always be the first "investment" in any investment plan, because any major medical expenses could easily wipe out years of hard-earned savings and investment gains. However, insurance is usually not discussed as much as investments because it is a boring and taboo subject. A common thinking among investors is to try to grow one's wealth through investment quickly enough so that one does not need insurance. However, how many of us could ensure that we could grow wealthy before we grow old? A well thought through insurance plan would go towards ensuring that we are well covered during the period when we're still growing our wealth and are most vulnerable to any major expenses. However, sometimes, even the best laid plans can go awry when one is not in the best of health.

I have a private "as-charged" Medishield plan (Plan B) that covers me for hospitalisation in a Class B ward. When I was healthier and bought the insurance, I thought I would stay in a Class B2 ward if I were to be hospitalised. I did not buy any rider to cover the deductible and co-insurance portions of the medical bill, as I believe that medical insurance should be to cover large medical expenses. Hence, the coverage of a Medishield Plan B was adequate -- stay in B2 ward, covered up till B1 ward. I could not imagine myself staying in a Class A or even a private hospital ward. The money saved from not staying in these more expensive wards could be spent on a nice little holiday later. In fact, I have occasionally thought about staying in a Class C ward to save more on the deductible and co-insurance portions.

Unfortunately, Man proposes, Heaven disposes. I have not been in the best of health in the last few years. This has exposed gaps in my thinking and a major risk in my medical insurance coverage. I have seen specialists as a subsidised patient in a public hospital, private patient in a public hospital and private patient in a private hospital. Needlessly to say, seeing the specialist as a subsidised patient is the cheapest, but it can take 1-2 months to make an appointment. Seeing as a private patient costs more than as a subsidised patient, but the cost differential between a public and private hospital is not major. The lead time for an appointment as a private patient in a public hospital can range from 1/2 week to 3 weeks, while a private patient in a private hospital can see the specialist on the same day. Hence, in my haste to seek medical attention, I have seen a private specialist in a private hospital on a few occasions. This then exposes me to the risk of being hospitalised in a private hospital ward. The Medishield Plan B that I have only covers 50% of the insurable expenses in a private hospital ward, which is as good as not having any insurance.

Is it a case of being penny-wise and pound-foolish in not buying the most expensive Medishield plan? I don't think so, because if that is the case, I would not have upgraded to an "as-charged" Medishield plan. It is a case of not being able to foresee how I would act when I am not well. 

What will I do now? One option is to upgrade to a Medishield Plan P that covers private hospital wards, provided I am still insurable. But frankly speaking, the annual premiums of Plan P are not cheap. If this option is chosen, at some point in time, I might downgrade to Plans A or B to manage the premiums. Anyway, there are going to be changes to the plans with the introduction of Medishield Life. I will wait and see the benefits and premiums of each Medishield plan before deciding.

If I am no longer insurable, I could only continue on Plan B, and if the specialist in the private hospital diagnoses that I need to be hospitalised, I would go to the Accident & Emergency Department of a public hospital to seek hospitalisation. That probably seems the best way to manage this risk. 

The moral of the story is, always plan for the unexpected.


See related blog posts:

• Buying the Most Expensive IP When Young and Downgrading When Old
• Doing Your Own Insurance Planning
• How Much Does One's Financial Independence Depend on One's Health?