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Free medical insurance in our old age?

Thursday, June 5, 2014

On 14 December 2013, I blogged about how we could possibly get free medical insurance in Singapore. 

I shared my own experience and how things have worked for me. 

The beauty about the method I shared is that it is risk free and, therefore, stress free.

You don't know what I am talking about? 

Then, you might want to read this first:
How to get free medical insurance in Singapore?

Of course, there is some concern with how the annual premium which we pay for our H&S (hospitalisation and surgical) insurance will increase as we grow older. 

This means that the cost of coverage will become more expensive over the years with annual cost exceeding $2,000 as we age into our 60s in some cases.

This is one reason why I am quite happy to have the government increase the limit for the Medisave Account (CPF-MA) which pays 4% per annum, risk free. 

Having more money in my CPF-MA means receiving more in interest payment.

Last year, I received $1,760.35 in interest payment for money in my CPF-MA. 

The year before that, I received $1,654.48. 

That is an increase of more than $100. 

However, withdrawal to pay for my H&S insurance remained at $665.00. 

So, I have some surplus.

If the MA ceiling is raised year after year, I should have more surplus in my MA year after year too. 

This means that funds in my MA earn more interest to pay for the higher insurance premium that is bound to come as I enter the next age bracket and the next and so on.

So, the argument that even this method will not ensure that we get "free" medical insurance in our golden years is weakened. 

In my 60s, I would probably have to pay more than $2,000 annually for my H&S insurance. 

Last year, I already received $1,760.35 in interest payment. 

With the MA's ceiling raised annually, could I see more than $2,000 in interest payment eventually? 

I cannot say for sure but, everything else remaining equal, I think so.

Of course, by having the maximum allowed in my MA now while I am younger, I will enjoy plenty of surplus as I receive the maximum in interest payment while paying relatively lesser for my H&S insurance. 

The surplus amounts to a few hundred dollars each year, in fact. 

It is like receiving more money now to pay for the higher cost of insurance in our old age.

If you worry about the high cost of health care in Singapore, you should get yourself covered with a good H&S insurance policy. 

If you worry about the cost of insurance escalating as you age, you might want to max out your MA, letting time and the government help you accumulate the funds to give you free medical insurance that so many say we do not have in Singapore.

Related post:
Enhanced Incomeshield (H&S) for my mom.


AK71 said...

The LIA says insurers will continue to monitor and manage the impact of medical inflation to ensure that their Integrated Shield Plans remain competitively priced and affordable.

The association - which represents the five IP insurers in Singapore (AIA Singapore, Aviva, Great Eastern Life, NTUC Income Insurance and Prudential) - said the life insurance industry is encouraged by the review committee's efforts to provide greater protection for Singapore residents with MediShield Life.


AK71 said...

"The Government accepts the committee's recommendation and will bear most of the cost of bringing in those with pre-existing conditions. In this way, the Government will help all Singaporeans, including those with pre-existing conditions and those who are currently excluded, achieve MediShield Life cover, while ensuring that premiums are kept affordable for policyholders," the Ministry of Health said in a press statement.

Said Committee chairman Bobby Chin: "We have listened to what Singaporeans valued most in MediShield Life. Our recommendations will provide better protection against large hospital bills for all Singaporeans, for life."

He added that the committee will finalise its recommendations in a month, with the scheme slated to be implemented by the end of 2015.

MediShield Life was first announced by Prime Minister Lee Hsien Loong during the 2013 National Day Rally with the aim of extending "coverage for life, coverage for all", by providing better lifetime coverage for all Singaporeans for large subsidised bills.


AK71 said...

Today, not everyone can buy medical insurance -- not if you have an existing condition such as kidney disease. However, under new recommendations announced on Thursday (June 5) to enhance the MediShield Life scheme, everyone will be covered, including those with pre-existing conditions.

This universal coverage will come at a higher cost which will be shared among the government, policy holders, and those with pre-existing conditions. The MediShield Life Review Committee says the Government is expected to fund more than half of the cost, while the premium increase for policy holders should be no more than 3 per cent from current premiums.

The committee said those with pre-existing conditions will have to pay higher premiums reflective of their higher risks, at an additional 30 per cent for 10 years. And thereafter, they will pay the normal premiums relevant to their age group.


Ian said...


I'm new to your blogspot and find it refreshing to hear new perspective and after reading through the "Dirty CPF-HDB scheme to trick Singaporeans", I reckon you are a person who is logical and self-reliant hence, makes sense with some of the points that you have drafted out.

I have friends who are reluctant to commit to insurance coverage as it is an addition cost to their cost of living and insurance is a kinda product that the Chinese proverb says "不怕一万,只怕万一", which further stems their belief that getting insurance is not necessary as the probability of utilizing is very low hence, no point in getting.

I'm currently in my late 20's and am fully covered with H&S from my insurance coverage (overriding included), which fully pays for everything incurred if need arises.

I'm not an insurance agent but still, its kinda discouraging to see friends around you not getting the protection required, either on short or long term protection.

I understands the concept of having 'Free' medical coverage from my MA, given the risk free returns of 4% albeit, in the long run will you see the effects of this plan, using interest to pay for your medical expenses.

It's a double protection (if you are already having insurance coverage)from what you are having and would be cool if this sum can be utilize for our outpatient fee as well.

Anonymous said...

The question is, "Will the IPs now also have to cover those with pre-existing conditions?"

The report was not very clear on that. If so, premiums should rise significantly?

AK71 said...

Hi Ian,

Welcome to my blog. :)

You are not alone in feeling disappointed that some people you care about do not know enough to care for themselves. I know people like that too.

I have a friend who would always tell his friends how important it is to have adequate insurance coverage and also to invest for a better future. He is not an insurance agent either but most of his advice fell on deaf ears.

You know what we say about the TSR in the SAF? TSR is written in blood. A tragedy must happen before people realise that something was wrong and must be fixed.

Similarly, human beings have a tendency to feel invincible until something goes seriously wrong in their lives. :(

AK71 said...

Hi Kelvin,

Apparently, those with pre-existing conditions could be covered under Medishield Life but they must pay 30% more in the first 10 years of coverage.

So, it could be that private insurers might follow suit although I don't see it mentioned in the reports either.

OT83 said...

Hi ak

So actually it more worthwhile to cancel private shield plan and just take medishield life?

AK71 said...

Hi OT,

We will have to wait for the details of Medishield Life to be finalised before arriving at a conclusion. We want to compare what Medishield Life does against our existing private shield plans, if any.

For people with existing medical conditions not covered by their private shield plans, a switch to Medishield Life could be worth considering but they must remember that they will probably have to pay 30% more in cost in the first 10 years after the switch.

For people without existing conditions which are not covered by their current shield plans, I don't see a big advantage in switching to Medishield Life, all else remaining equal.

steady said...

Recently govt announced that no need to keep minimum amount in MA after turn 55. Why that decision?? I thought its good to have a reasonable minimum amount in MA so that it can be use for medical/surgery expenses and medishield insurance.

AK71 said...

Hi Steady,

I have a feeling that it is a nod towards more populist ideas. I hope I am wrong. -.-"

blazingruby60 said...

Hello AK
Has Medishield Life become compulsory and covers pre existing? Would you know or maybe readers of your blog (which has huge followings may know...) My husband is a civil servant and so I enjoyed subsidized healthcare. He is now close to retirement and suddenly both of us realised, we dont have private insurance like hospitlisation and surgical insurance. I have pre existing conditions and of course private insurers like ntuc income reject me. Not long ago, I read in Business Times dd July 16 2018..Raffles Hospital CEO, Dr Loo announced that Raffles will cover 3 pre existing conditions and I was happy cos I have this one insurer who actually cared enough to be inclusive.. I applied and got rejected and I wrote in and ask for an explanation... still waiting..
Suppose I have no PI, what is my next plan for medical coverage?

AK71 said...

Hi Ruby,

I believe Medishield Life has both you and your husband covered.

It is compulsory for all CPF members and covers for life.

I am pretty sure it covers pre-existing illnesses too.

However, it is only good for classes C and B2 wards.

If you want more than that, you will need private H&S plans.

AK71 said...

Is my insurance agent friend scaring me?

AK71 said...

Raymond Ng says...

Still can apply for PI but has to declare exclusion of pre-existing medical condition.

blazingruby60 said...

I didnt say what pre existing conditions did I..the moment you declare you have high cholesterol, high blood pressure and the last (which I dont have YET) high diabetes ... no insurers will underwrite you.

AK71 said...

Hi Ruby,

Medishield LIFE is there for you. :)

Ben said...

Dear AK,

This is a very misleading statement.

You do not get a free insurance from Medisave. You are just using the profits from Medisave to pay for your insurance premiums.

This profit can be used for other purposes like paying your healthcare bills, rolling over to your SA and OA as well as to pass on to our children.

While I highly respect your opinion on CPF and generally agree with them, I hope you can retract your posts regarding "free insurance" and refrain from such misleading statement in the future.

AK71 said...

Hi Ben,

I did not say anything misleading at all.

This strategy is about getting the government to pay for our H&S insurance by maxing out our CPF-MA instead of leaving our money in a savings account.

You are entitled to your opinion, of course, and if it bothers you, just don't read these blogs. ;)

WTK said...

Hi AK,

It's hard to satisfy all parties in the discussion. Just be yourself and I think that it will be fair that everyone respects the views of one another. Each point has its own merits and cons as per individual's perspective.


AK71 said...


I believe there is always room for a diversity of opinions.

If I don't agree with someone, I might tell him so.

However, I would not tell him to retract his statement nor would I tell him to refrain from saying the same thing in the future.

It is his right to say whatever he wants and he will have to bear the consequences, if any.

These days, I avoid getting into arguments, if possible.

If people don't agree with me, I just tell them to ignore me. ;p

WTK said...

Hi AK,

Peace of mind is the way to go. Be happy always. No point getting into arguments. It's totally not worthwhile.


AK71 said...


In most instances, arguments are never worthwhile.

Even if we win an argument, we would most likely lose something in the process.

I have to remind myself of this from time to time.

Peace of mind is absolutely priceless. :)

WTK said...

Hi AK,

It's true. This is very common for the argument. I recall the time in which I was in full-time employment in which the argument on the stand is very common. This was evident during the meetings which I opine to be the waste of time.

Having the option of living the life peacefully is priceless in particularly for the life is very fragile. See the below link


Ben said...

Dear AK,

Thank you for your reply.

Please don't misunderstand my intentions. I am not here to cause trouble to you in anyway.

However, I feel I have to speak out and get you to correct such a ridiculous statement that the government is giving out "free insurance" as it is wrong no matter how you interpret it and will do the online community a big disservice as you're a reputable financial blogger with huge influence.

If something is free, you don't have to pay for it!

You're paying for your premiums using the profits from your Medisave account.

If the insurance is truly "free", that means we can both have the insurance and the profit from Medisave at the same time, which we obviously can't!

As you mentioned in your previous comments, everyone is entitled to their opinions. But, I have to point out to you that it is a fact that there is no free insurance provided by the government, and everyone have to respect and acknowledge this fact.

That is why I have to rely to such forceful method as to request that you retract this statement.

I hope you won't view my comments as hostility and disrespect towards you, which I can assure you are not my intentions, and to consider my suggestion as a responsible financial blogger should.

AK71 said...


Unless it is a life and death matter, better to live and let live. ;p

"It could all end at any moment."

Indeed, it could. :(

Thank you for sharing the link to the sad but sobering story.

AK71 said...

Hi Ben,

I have also said before that I have investments which are free and I even say that my current home is free.

They are paid for by Mr. Market while my H&S insurance is paid for by the government.

Must I remove all those blogs as well because you have a different take on the matter and that you disagree?

This is my blog and there is such a thing as poetic license.

Like I said earlier, you are entitled to your opinion, of course, and if it bothers you, ignore the blogs.

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