New Additional Withdrawal Limits to help Integrated Shield Policyholders pay for premiums using Medisave

1.            The Ministry of Health today announced new Additional Withdrawal Limits to help Singaporeans pay for part or all of their Integrated Shield Plan (IP) premiums using Medisave.

How the Additional Withdrawal Limits Work with Integrated Shield Plan Premiums

2.            When MediShield Life replaces MediShield in end-2015, Singaporeans will continue to be able to pay for their MediShield Life premiums fully using Medisave.  The amount of Medisave that can be used will fully cover MediShield Life premiums, inclusive of any Additional Premiums and net of any subsidies.  With the use of Medisave, no cash outlay will be needed for MediShield Life premiums.

3.            The Medisave-approved IPs are made up of two components: (i) MediShield/ MediShield Life, sized for Class B2/C ward stays and administered by CPF Board; and (ii) additional private insurance coverage for Class B1/A wards and private hospital stays, and administered by private insurers (see Annex A for illustration).

4.            There will be Additional Withdrawal Limits (AWLs) to help Singaporeans use Medisave, up to a cap, to pay the additional premiums for the private insurance component of Medisave-approved IPs.  The AWLs apply on top of the amount of Medisave use for MediShield Life premiums (see Diagram 1 below for illustration).


Diagram 1
: How the AWL is Applied to the IP premium

IP

5.             The AWLs will apply to the additional private insurance coverage component of IP premiums, and are set as follows:
                        a.    $300 for those with age next birthday at 40 years and below;
                        b.    $600 for age next birthday at 41 to 70 years; and
                        c.    $900 for age next birthday at 71 years and above.

6.            This is a change from the current approach where Medisave Withdrawal Limits apply to the entire IP premium (i.e. sum of the MediShield premium and the premium for additional private insurance coverage).  A change is necessary because when MediShield Life is launched, IP premiums will differ for policyholders in the same age band, due to:
                        a.    MediShield Life premium subsidies that depend on each policyholder’s unique circumstances; and
                        b.    Additional Premiums payable by a small number of policyholders with serious pre-existing conditions.


7.            This new approach provides certainty and clarity to IP policyholders:
                        a.    Certainty: All IP policyholders know that premiums for the MediShield Life component can be paid fully from Medisave.
                        b.    Clarity: IP policyholders know how much additional Medisave, beyond the amount used for the MediShield Life component, can be used to pay for premiums of the additional private insurance coverage component of their IP premium.

Same or more Medisave can be used for the private insurance component of IP premiums with the new AWLs

8.            Upon the introduction of the AWLs, Singaporeans will be able to use the same amount or more Medisave for the additional private insurance component of their IP premiums.  For older Singaporeans with IPs, the AWLs will enable them or their family members to use more Medisave than before for the additional private insurance component of their IP premiums.

9.            Table 1 below shows on the impact of the AWLs on IP policyholders, and Annex B provides examples of how Singaporeans can benefit from the new AWLs.
 

Table 1: Impact of New AWLs on IP Policyholders

(Based on Premiums in 2015)

Age Next Birthday

AWLs

Impact of AWLs on IP Policyholders

1 – 40

$300

 

IP policyholders can use the same amount of Medisave to pay for their additional private insurance premiums.

41 – 70

$600

IP policyholders can use up to ~$250 more Medisave to pay for their additional private insurance premiums, compared to today.

>=71

$900

IP policyholders can use ~$400-~$700 more Medisave to pay for their additional private insurance premiums, compared to today.

Note: The impact is computed on the basis of no change in plans or age bands of policyholders.


10.         The new AWLs will apply to all IPs being renewed or commencing from the launch date of MediShield Life.

 

ANNEX A - ILLUSTRATION OF IP STRUCTURE

ANNEX B - IMPACT OF NEW AWLS ON IP POLICYHOLDERS

 

MINISTRY OF HEALTH

9 July 2015

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