Total Cost for Public Health Insurance Singapore

All in all, the insurance premium for public health insurance coverage in Singapore is fairly affordable. In fact, if you are comfortable to opt for treatments at public hospitals, then there are a few types of integrated shield plan that you may consider. For instance, one may opt for plans that target Class B1 wards in public hospitals. Similarly, if you prefer to stay in a single room, then you may opt for plans that target Class A1 wards in public hospitals. That being said, it is my duty to ensure that you are able to afford to keep your health insurance policy in the long run. With this in mind, let’s conduct an in-depth calculation to find out the total cost for public health insurance coverage at each life stage.

One Minute Summary:

To point out, the health insurance premium rate is not guaranteed. Consequently, the insurer may revise the insurance premium rate from time to time.
If you are buying a health insurance policy for your child, then you will spend a total of $5.6k on average for each child.
Generally, you will spend around $16.7k for your public health insurance scheme as an adult (during your working years).
Thereafter when you retire, the cost for public health insurance doubles to almost $188k!
All things considered, given that escalating cost for public health insurance, it is imperative to conduct comprehensive financial planning and to start planning for your future today.

Part 1: Assumptions

In order to boost clarity in this post, there are six assumptions that we need to make.

Part 1.1: Integrated Shield Plan and its Rider

Firstly, let’s do a short recap on an integrated shield plan. Basically, an integrated shield plan is a private health insurance scheme that provides reimbursement for hospital bills and selected outpatient treatments. As can be seen, the word “private” is used to suggest that the health insurance scheme is run by an insurance company. This is opposed to being a public health insurance scheme that is run by the Government. At the present time, there are seven insurers that offer an integrated shield plan, namely,

AIA Singapore: HealthShield Gold Max
Great Eastern Singapore: GREAT SupremeHealth
HSBC Life: HSBC Life Shield
Income Insurance: Enhanced IncomeShield
Prudential Singapore: PRUShield
Raffles Health Insurance: Raffles Shield
Singlife: MyShield

As I have noted in my post on What is an Integrated Shield Plan, an integrated shield plan contains two elements – the main integrated shield plan (“Main IP”), and the integrated shield plan rider (“IP Rider”). In the case of the Main IP, it does not cover the deductible and co-insurance component of the medical bill. Given that situation, you will need to pay for both of these cost on your own.

In order to reduce your out of pocket expenses, you may choose to enhance your Main IP with the IP Rider. Under those circumstances, the IP Rider will cover both the deductible and the co-insurance component of the medical bill. To this end, you will pay a smaller portion of the medical bill; that is, the co-payment component.

Part 1.2: The use of the word “Private” and “Public”

As I have mentioned in Part 1.1, an integrated shield plan is a private health insurance scheme. In this case, we use the word “private” to suggest that this health insurance scheme is run by an insurance company (and not by the Government). Meanwhile, in this post, we will be calculating the insurance premium for IPs that provide health insurance coverage for public hospitals in Singapore. In this case, we use the word “public” to suggest that these hospitals are owned or run by the Government.

Part 1.3: Singapore Citizens and Permanent Residents

To point out, depending on your residency status, an insurer may charge a different set of insurance premium for your integrated shield plan. Generally, Singapore Citizens and Permanent Residents will pay the same insurance premium rate. Furthermore, they are also allowed to utilise some of the monies in their CPF MediSave to pay for the Main IP. On the other hand, foreigners may pay a different rate of insurance premium. With this in mind, in order to keep our calculations simple, I will be using the figures that are meant for Singaporeans and Permanent Residents.

Part 1.4: Additional Withdrawal Limit

Next, under the Private Medical Insurance Scheme, if you are a Singaporean or a Permanent Resident, then you are allowed to use CPF MediSave to pay for the Main IP. In order to do this, you will need to abide by the Additional Withdrawal Limit that is set by Ministry of Health, Singapore; that is,

$300 if you are 40 years old or younger on your next birthday;
$600 if you are 41 to 70 years old on your next birthday;
$900 if you are 71 years old or older on your next birthday.

Thereafter, for any amount that is above the Additional Withdrawal Limit, you will need to pay the insurance premium in cash. With this information in mind, you will see the breakdown under “Payment via Cash (Main Plan only)”.

Part 1.5: Choice of Integrated Shield Plans used for our Calculation

At this time, the respective insurers are allowed to design the benefit and cost for their integrated shield plans. As a result, each IP may have a benefit and cost that is different from the other IPs. In order to conduct a fairer comparison, this is how I select the respective insurers’ integrated shield plans for our comparison:

Firstly, for the Main IP, I will select the plan that covers up to Class A1 wards in public hospitals.
Secondly, for the IP Rider, I will select the plan that covers the largest portion of the deductible and co-insurance component of the medical bill.

Based on the above mentioned criteria, this is the list of IPs and IP Riders that I will be using in our calculation:

AIA Singapore: AIA HealthShield Gold Max Plan B, AIA Max VitalHealth B
Great Eastern Singapore: GREAT SupremeHealth A Plus, GREAT TotalCare A
HSBC Life: HSBC Life Shield Plan B, HSBC Life Enhanced Care Plan B
Income Insurance: Enhanced IncomeShield Advantage, Deluxe Care Rider Advantage
Prudential: PRUShield Plus, PRUExtra Plus CoPay
Raffles Health: Raffles Shield A, Raffles Key Rider for Raffles Shield A
Singlife: Singlife Shield Plan 2, Singlife Health Plus Public Prime

Part 1.6: Average Cost of Premium

It is important to realise that the respective insurers may adjust its health insurance premium from time to time. As a result, the figures that I have used in this post may not be entirely accurate (it depends on when you read this post). In any case, the intention of this post is not to rank the insurer according to the insurance premium rate that they charge. Instead, my intention is to raise awareness on the potential cost of health insurance premium over time. With this intention in mind, I will be sharing the data based on the average insurance premium across the seven insurers.

Part 2: Terminology

Next, I will use the following terms to define the breakdown for each of the cost component in Part 3 to Part 7.

Payment via CPF MediSave (Main Plan): Generally, as a Singaporean or a Permanent Resident, you may use CPF MediSave to pay for the main integrated shield plan. In order to differentiate between an integrated shield plan and its rider, we will refer to the main integrated shield plan as the “Main IP”. Accordingly, the insurance premium in this section refers to the amount that you can pay via CPF MediSave.
Payment via Cash (Main Plan): As I have noted earlier (Part 1.4), the use of CPF MediSave for the Main IP is bounded by the Additional Withdrawal Limit. If there is any cost that is above the Additional Withdrawal Limit, then you will need to pay it in cash.
Payment via Cash (IP Rider): All things considered, you will need to pay for the IP Rider in cash.
Total Cash Payment (Main Plan + Rider): By and large, this accounts for the total amount that you need to pay for both the main integrated shield plan and the rider in cash.
Total Capital Outlay (CPF + Cash): Summing up, this is the aggregated amount that you will pay for both the main integrated shield plan and the rider. In detail, it accounts for both the amount that you pay via CPF MediSave and in cash.
Annual Average Capital Outlay (CPF + Cash): To explain, this refers to the average amount that you need to pay for both the main integrated shield plan and the rider each year. It is important to realise that the insurers charge an insurance premium based on the age band. Hence, this figure is merely an average amount that is based on the presented age group in each section.

Now that we have defined all the assumptions and its terminology, let’s go through the cost for public health insurance in Singapore

Part 3: From 0 to 20 Years Old

To begin with, let’s look into the cost for public health insurance from birth till adulthood. Generally, the younger you are, the cheaper the health insurance premium rate. Hence, it is no surprise that the average capital outlay is merely $270.09 a year for the first twenty years.

Payment via CPF MediSave (Main Plan): $1,525.93
Payment via Cash (Main Plan only): $0
Payment via Cash (Rider only): $4,091.09
Total Cash Payment (Main Plan + Rider): $4,091.09
Total Capital Outlay (CPF + Cash): $5,617.02
Annual Average Capital Outlay (CPF + Cash): $280.85

As can be seen, under the Main IP, the cost of insurance is relatively affordable (for this age group). Consequently, you may pay for the entire cost of the Main IP using CPF MediSave.

Part 4: From 21 to 55 Years Old

In general, the premium rates are adjusted based on your age band. Consequently, you may expect an increase in the average premium during your adulthood. In detail, you will pay an average premium rate of $474.69 a year as an adult.

Payment via CPF MediSave (Main Plan): $6,725.96
Payment via Cash (Main Plan only): $0
Payment via Cash (Rider only): $9,986.84
Total Cash Payment (Main Plan + Rider): $9,986.84
Total Capital Outlay (CPF + Cash): $16,712.80
Annual Average Capital Outlay (CPF + Cash): $491.55

Similar to the case as a child (i.e. from 0 to 20 years old), the cost of insurance for the Main IP is still affordable at this stage. Despite that increase in the insurance premium (due to the difference in the age band), the amount still falls within the CPF MediSave Additional Withdrawal Limit.

Part 5: From 56 to 80 Years Old

In time to come, this is the period when you retire. By and large, most of us will continue to keep our health insurance plan. Under those circumstances, you must be prepared to pay a much higher rate of insurance premium. In detail, the average annual premium is $2,477.45 during your old age.

Payment via CPF MediSave (Main Plan): $17,004.46
Payment via Cash (Main Plan only): $13,702.67
Payment via Cash (Rider only): $30,571.48
Total Cash Payment (Main Plan + Rider): $44,274.14
Total Capital Outlay (CPF + Cash): $61,278.61
Annual Average Capital Outlay (CPF + Cash): $2,553.28

At this stage, because of the Additional Withdrawal Limit, you are unable to use CPF MediSave to pay for the entire cost of the Main IP. As a result, you will need to pay the balance (of $13,702.67) in cash.

Part 6: From 81 to 100 Years Old

It is important to realise that all the IPs are guaranteed to be renewable for a lifetime. In other words, if you live beyond 100 years old, then you may continue to renew your integrated shield plan and enjoy its coverage. For the sake of our calculation, I’m going to stop the calculation at age 100. In this case, the average cost for the public health insurance will be $6,471.48 a year.

Payment via CPF MediSave (Main Plan): $18,000
Payment via Cash (Main Plan only): $56,858.20
Payment via Cash (Rider only): $52,221.16
Total Cash Payment (Basic Plan + Rider): $109,079.36
Total Capital Outlay (CPF + Cash): $127,079.36
Annual Average Capital Outlay (CPF + Cash): $6,688.39

Similar to the earlier age group, CPF MediSave’s Additional Withdrawal Limit (AWL) put a cap on the amount of CPF MediSave that you can use to pay your Main IP. As can be seen, the AWL caps the MediSave usage at $18,000. Thereafter, you will need to pay balance (of $56,858.20) in cash.

Part 7: Total Cost for Public Health Insurance

Summing up all the figures above, you may expect to pay an average sum of $210,687 from life till death. In other words, the average capital outlay will be $2,106 a year throughout your life. This is after taking into account the adjustment in the health insurance premium rate at each age band.

Public Health Insurance: Lifetime Cost across the Insurers

Part 8: Non-Guaranteed Insurance Premium Rates

Now that you know these figures, how ready are you for retirement? Before you think that it is achievable to save $188k by the time you reach 55 years old, think again. Above all, the premium rates are non-guaranteed and are expected to be adjusted from time to time. In detail, this will depend on the insurer’s claim experience, medical inflation, as well as the general cost of treatments, supplies or medical services in Singapore. In other words, there exists a possibility that the premiums may increase (or decrease) in the future.

Finally, if you are debating on whether to choose between private or public health insurance coverage, here are seven factors to consider between the two types of health insurance coverage.

Are you on my free mailing list? I will be sharing more about the premium increment and its impact to you. If such content resonates with you, then be sure to join us so that you won’t miss out any of these subscriber-exclusive content.

First Published: 13 April 2022
Last Updated : 30 October 2024

PZL Blog | Singapore

Table of Contents: