How to limit your Medical and Hospital Bill?

Medical & hospital expenses cannot be avoided altogether. Even healthy people sometimes end up in hospital as a result of an accident or an unfortunate event like food poisoning, or from a serious infection.

Many people we speak with do not have any idea how to limit their medical and hospitalization expenses through the optimum use of medical & health insurance.

For those who are employed, the company may provide some form of medical benefits but these are usually subject to various limits (to keep premiums within reasonable limits). Company sponsored plans are usually group plans and may be ‘too much – underused’ for some employees, while being grossly inadequate for specific employees with aggravated conditions. These benefits end when the employee leaves the company. This leaves the ex-employee ‘exposed’.

For the self-employed, they are pretty much on their own, and medical insurance planning is even more important. That is why it is compulsory for the self-employed to make contributions to their Medisave account even when they do not contribute to their CPF OA or SA.

A few pointers to help readers limit their medical & hospital bills:

1. Separately consider the ‘small, non-life-threatening, less serious’ situations (e.g. common cough, flu, fever, etc.) that usually don’t require anything more that an outpatient visit to the GP doctor, and a couple of days’ rest – and;
2. The ‘more serious, potentially catastrophic’ situations (e.g. cancer, stroke, heart attack, other major illnesses, fractures, serious injuries, etc.) that are likely to involve admission into a hospital with or without surgery, and perhaps a stay in ICU.
3. PRIORITY is to put in place the insurance plan for the ‘catastrophic’ situations as these can involve big money running tens or hundreds of thousands of dollars, plus loss of income.
4. It is utmost important to limit the BIG BILLS and pay the small bills – NOT THE OTHER WAY AROUND!

When selecting medical, hospitalization & surgical plans, choose those that offer features such as:

Lifetime cover and guaranteed renewable.

• Offer different choice of ‘riders’ to suit your specific preference, e.g. deductibles and/or co-insurance. Usually, it’s more cost-efficient to just take the co-insurance riders and manage the deductibles yourself.
• Offer ‘as charged’ benefits. This will ‘inflation-proof’ your plan and not subject you to itemized limits which can be easily exceeded.
• Offers the choice of Government Restructured Hospitals as well as Private Hospitals.
• Includes pre- and post- hospitalization consultation.

MANY OF THESE PLANS ARE VERY AFFORDABLE AND CAN BE PAID FOR USING MEDISAVE MONEY (subject to $800 per person per year). Do note however that these plans are ‘re-imbursement’ plans, i.e. they pay all or nearly all of the hospital bills but do not provide any income for the person who is ill.

There are separate plans for DISABILITY INCOME, and those that pay a specified amount when one is diagnosed with a DREAD DISEASE.

Consult your financial adviser to determine the appropriate amount for your needs and how to integrate these with the ‘re-imbursement’ plans.  When they are well coordinated, they not only limit medical and hospital bills, but also provide income for the family when the affected person is unable to provide the regular income.

Contributed by Freddie Kang, Senior Financial Advisory Director at SingCapital Pte Ltd, a licensed financial advisory organization. Freddie is an internationally Certified Financial Planner (CFP®), and a Chartered Financial Consultant (ChFC), and holds an MBA in Strategic Planning from Brunel University, West London, UK. Freddie leads a team of 15 license financial advisers serving individuals, families, business owners, professional and corporations. The writer can be contacted at freddiekang@singcapital.com.sg