Patrick (not his real name) suffered some discomfort late at night. As the normal clinics were already closed, he went by himself to a private hospital to seek consultation.

While waiting for the test results, Patrick collapsed and went into a coma. His condition worsened and he ended up having multiple organ failure. Four specialists (including one anaesthetist) had to be put on standby to stabilize his condition. Patrick also had to be connected to a life support machine in ICU just to keep him alive.

Even though Patrick was fairly well off, this unexpected incident had lead to a financial disaster for his family due to a number of factors:

1) Patrick only had a private shield plan that covered him only up to A ward in a government hospital, so he can only claim 65% of the private hospital bill from his insurance. The original bill is a whopping $12,000 a day so the uninsured portion works out to be about $4200 a day. There is also an annual limit of $250,000 for his current insurance plan. Transferring him to a government hospital is out of the question due to his condition.

2) As his insurance plan is on a reimbursement basis, his family had to fork out money to pay for the bill first. The hospital requires his family members to make payment whenever the outstanding bill hits $20,000, which is once every two days.

3) Patrick keeps most of his money in single bank accounts and did not give any supplementary credit cards to his wife, so his non-working wife did not have the funds to pay.

4) Patrick is in a coma, so he is unable to sign the Medisave Authorisation Form to allow the CPF Board to pay the hospital bill from his own Medisave Account. This is one of the shortcomings about our current system. However, his family members would be allowed to use their Medisave to pay for the bill. Even so, the Medisave would probably be depleted in no time looking at the size of the bill.

What lessons can we draw from this incident?

1) Ensure your current medical insurance plan fits your needs and make sure your family members know what kind of hospitals and wards you are covered for.

2) Keep some joint bank accounts with emergency cash – with your spouse if you are married and with your parents if you are single. Supplementary credit cards can also be useful.

3) Consider signing the Advance Medical Directive. (AMD) The AMD is a legal document you sign in advance to inform your doctor that you do not want the use of any life-sustaining treatment to be used to prolong your life in the event you become terminally ill and unconscious and where death is imminent.

And in case you were wondering what led to Patrick’s collapse, it was gall bladder infection which resulted in Septicemia.

Read part 2 here:

http://www.lioninvestor.com/case-study-of-an-unplanned-hospitalisation-financial-disaster-part-2/

Are you unsure about what Medisave, Medishield, Medifund or Eldershield is, and what coverage it provides for you? Are you unclear of what to look out for when buying a health insurance policy?

If any of the above applies to you, this seminar might be worth attending.

In conjunction with the Ministry of Health (MOH) and Life Insurance Association (LIA), the Consumers Association of Singapore (CASE) is organising this free seminar to educate you on the various government and private healthcare financing schemes available to you.

Other topics such as the benefits of health insurance and important considerations when purchasing a health insurance policy will also be shared. Finally, CASE will speak on the Consumer Protection (Fair Trading) Act, and how the legislation is applicable to disputes concerning health insurance.

Topics include:

1. Healthcare financing: All about Medisave, Medishield, Medifund, Eldershield, private shield plans and subsidies (Ministry of Health)

2. Making sense of health insurance: Facts you should be aware of before buying a policy (Life Insurance Association)

3. Tips on buying health insurance and the Consumer Protection (Fair Trading) Act (Consumers Association of Singapore)

Details of Seminar:

When: 15 May 2010 (Saturday)
Time: 10am – 1pm (registration starts at 9.30am)
Where: NTUC Centre, training room 701, 1 Marina Boulevard Level 7, Singapore 018989

*Tea break is included for participants, free CASE door gift to be given away! Limited seats left. Email marketing@case.org.sg or call 64611888 to register.

Medisave is a national medical savings scheme introduced in April 1984 whereby part of our income is put into Medisave Accounts for the main purpose of meeting the future hospitalization needs of our own or our immediate family.

Under the scheme, every employee contributes 6.5-9% (depending on age group) of his monthly salary to a personal Medisave account.

A small portion (subject to yearly/monthly cap and/or deductible) can also be used for certain outpatient treatment and/or chronic diseases. This list includes:

• Hepatitis B vaccination
• Hyperbaric Oxygen Therapy
• Desferrioxamine Drug and Blood Transfusion for Thalassaemia
• Intravenous Antibiotic Infusion (at certain hospitals)
• Rental of Devices for Long-Term Oxygen Therapy and Infant Continuous Positive Airway Pressure Therapy
• Immunosuppressant Drugs for Organ Transplant
• MRI, CT and PET scans (for cancer patients only and as prescribed by doctors)
• Pneumococcal vaccination for children
• Diabetes
• Hypertension
• Lipid disorders
• Stroke
• Asthma
• Chronic Obstructive Pulmonary Disease (COPD)
• Schizophrenia and Major depression

Recently, Minister Lim Hwee Hua suggested to our Health Minister Khaw Boon Wan that Medisave be used to help pay for mammograms as our breast cancer screening rate is still low. Encouraging people to go for early screening can help prevent costly medical bills subsequently.

Mr Khaw mentioned that he is sympathetic to the idea, but he also wants to be sure that the solution is sustainable and will not cause future problems.

The main purpose of Medisave is to help pay for costly hospitalisation. That tends to happen at old age. Small outpatient bills should be paid out of pocket in cash otherwise the Medisave account might be depleted prematurely.

Therefore, the proposal will be studied at length before any policies are changed.

On another occasion last week, Mr Khaw also highlighted that the current contribution rate of 6.5% to about 9% does not build up enough reserves to pay for both big medical bills and long-term care.

Medisave was originally meant to pay for major hospital stays only but its use has since been expanded to include some outpatient payments.

Mr Khaw said the current contribution rate is not enough to cover long-term healthcare bills and is likely to have to go up. The increase in contribution rate will depend on what the members of parliament are ready to support.

Health Minister Khaw Boon Wan gave a hint of what is to come when he mentioned that more needs to be done to better serve Singapore’s aging population.

This includes:

• increasing the Medisave contribution rate from the current 6-9.5%
• enhancing payouts for Eldershield to $800/month from the current $400/month (this will also mean increasing the premiums)
• providing more funding for the Medifund-silver scheme
• introducing the 3E framework over the next 15-20 years – Elderfund, Eldersave and Eldershield

With the wide array of schemes available, it is a challenge for anyone to know all the schemes, not to mention keeping track of all the changes.

For starters, just do a permutation on the following terms:

• medi, elder
• save, shield, fund

The government should seriously consider setting up a giant information database wikipedia style. Frills and graphics might be good but when it comes to the crunch, what most people really want is to be able to find the information we need in the shortest possible time.

One example is the current CPF website which is simply hard to navigate. Is it only me or do you also feel the same way?

Read the entire interview with Khaw Boon Wan here:

Medisave Contribution to Rise

Medisave can be used to pay for the outpatient treatment of two more chronic diseases, schizophrenia and major depression, starting from 1st October 2009.

Schizophrenia and Major Depression are chronic mental diseases that can potentially cause significant burden and disability.  Schizophrenia, which affects nearly 1% of the population, is a chronic psychiatric disorder that requires long-term medication and treatment.  Major Depression is a more serious form of depression and may cause significant distress or impairment in the patients’ daily activities, but is highly treatable once diagnosed.

In 2006/2007, the Chronic Disease Management Programme (CDMP) was launched to allow Medisave for the treatment of diabetes, hypertension, lipid disorders (e.g. high cholesterol) and stroke. In April 2008, asthma and chronic obstructive pulmonary disease (COPD) were added.

Medisave withdrawal rules under the CDMP remains unchanged: withdrawals are capped at $300 per Medisave account per year. The existing deductible of $30 and co-payment of 15% will also apply – which means the first $30 and subsequent 15% of the bill would have to be paid using cash.