The Advantages & Use Of MediSave That You Might Not Know About

Understanding CPF

The Advantages & Use Of MediSave

That You Might Not Know About

Let us clarify all the “Medi’s”

Well, you might have heard of Medishield, Medishield Life, Medifund, and Medisave. People often use these terms wrongly and it does cause some confusion between them. Hence let’s clarify them.

Medisave:

Well, that is basically a bank account for your healthcare needs. You can’t literally pay all of your hospital bills with your Medisave, as there are limitations for the use of your Medisave.

Medishield/ Medishield Life:

            Health insurance, to simply put that is what they are. Medishield Life was created to replace Medishield. Yes, there are enhancements made towards the benefits of the Medishield Life compared to Medishield, but there are still limitations towards your coverage.

            Medishield Life benefits are pegged to ward C and B2 of a public hospital. Nevertheless, you can still go to ward A or B1 of a public hospital or even a private hospital but you have to pay more of the bill with cash or Medisave.

Medifund:

         This is like a treasure chest where money is being kept to help patients who face financial difficulties with their remaining bills after receiving Government subsidies and drawing on other means of payment including MediShield Life, MediSave and cash.

            Well not everyone can get his or her hands into this treasure chest. Only those who have been deemed eligible by the government can get the assistance from the Medifund.

Difference between Medishield Life and your Private Medical Insurance

People do get confused with what these two are. They both are health insurance but different in terms of the amount of coverage they offer. The CPF Board administers Medishield Life (MSL) and Private Medical Insurance (PMI) is from any respective insurer that offers an Integrated Shield Plan.

MSL only covers you for ward C and B2 of a public hospital whereas PMI may cover you ward A, B1 of a public hospital or even a ward in a private hospital, all depends on what kind of plan it covers.

They are not mutually exclusive which means they can co-exist together. By getting a PMI does not mean that you have dual coverage but it actually complements your MSL that you already have. To put in illustration:

          To sum it up, they actually work together. Bills that you accumulate will be divided between them. Fortunately, you don’t really have to do any calculation for who will get what, its all been settled them. All you need to do is to keep on paying your premiums on time.

The transition from Eldershield 400 to Careshield Life

Well, this has been in the news lately and I’m sure you perhaps have heard of all this talk of Eldershield or Careshield Life.

The same scenario as Medishield and Medishield Life, Careshield Life has been created to replace Eldershield 400.

ELDERSHIELD 400

Eldershield 400 is a long-term care insurance plan that provides monthly payouts when you are severely disabled. The definition of severely disabled is not being able to perform three out of the six activities of daily living (ADLs). The ADLs are:

1. Washing
2. Dressing
3. Feeding
4. Toileting
5. Walking or Moving Around
6. Transferring

You automatically have Eldershield once you reach 40. Eldershield 400 pays you $400 per month for 72 months instead.

CARESHIELD LIFE

Well, Careshield Life is the same as Eldershield 400 but there are enhancements in terms of the benefits offered. They are:

• The payouts are for a lifetime. Yes, it is not limited to 72 months only.
• Monthly payout will increase yearly at a rate of 2% per annum.
• It is affordable as there will be government subsidies. The number of subsidies will depend on your Monthly Per Capita Household Income and the year you are born in.
• Fully payable via Medisave

Well with the enhancements, there is surely a price that we have to pay. Premiums are collected at an earlier age. With subsidies, that means that the premiums itself will definitely be higher. To translate the previous two sentences, it will be expensive and costly.

Nevertheless, there is a need to increase the monthly payout as years pass by due to the effect of inflation. Long-term care is designed for the elder generation but millennial must their part in this issue as well. Yes, it is known when you grow older but it could also reduce the stress when you become part of the sandwich generation.

Make sure your parents have some kind of health insurance and long-term care plans under them so it won’t be a big amount in the list of expenses when they fall ill or become disabled.

Coming back to the transition from Eldershield 400 to Careshield Life, the changes will only kick in when it is 2020, hence there still some time for the government give us more information about the change. Questions like, How much will the premiums be, will there be a Careshield Life supplement has yet to be answered.

Well now it’s just a waiting game and we just have to be prepared for the upcoming changes.

That comes to the end of 3 Facts About CPFMA. Hope that this is beneficial for you and do share it with your family friends. Till next time.

Disclaimer:

I am a financial adviser but I am not your financial adviser. Therefore, what is posted on this website, are my opinions and NOT to be taken as financial advice. Information provided might be relevant at this period of time but may be irrelevant due to alterations to rules, regulations or policies. The information provided is true to the best of my knowledge, but there maybe omissions, errors or mistakes.