article About MediShield Upgrade Comparison - (all-vga-corner)

Ward Selection for MediShield

UPDATE (31 Jan 2014): I have been very busy recently due to work commitment. Surprisingly, this file has more than 7,000 over download. I hope to update this in view of the recent talk about the pioneer package. Stay tuned.... and thanks again for your support.


UPDATE (18 Jul 2011): Thanks for your support. Near to 700 have downloaded and use this excel file to better their health plan. I welcome any constructive suggestions to better this file for future reference.

After posting the excel file (version 11), let's see what MediShield covers.
We shall compare the following scenarios below. You can punch in the data in the excel file to derive the same results.

Scenario	1	2	3	4	5
Room and Board (R&B)	24,200	24,200	24,200	24200	5,200
ICU	1,800	1,800	1,800	1800	0
Day Surgery	728	728	728	728	0
Implant	0	0	0	0	0
Days in R&B	52	52	52	52	5
Days in ICU	2	2	2	2	0
Total Hospital Bill	26728	26728	26728	6300	5200
Ward Chosen	C	B2	B1	A	B2
Age	50	50	50	50	50
Insurance pays	21885.2 or 81.88%	21735.2 or 81.32%	8336 or 31.19%	6914 or 25.87%	600 or 11.54%
You pays	4842.8	4992.8	18392	19814	4600

If you have only MediShield, staying in Ward B2 or C has its merits. This is an ideal case to show CPF MediShield can pays for 80% as intended.
Choosing Ward B1 or A will dramatically blow up your medical expenses as illustrated in scenario 3 and 4 respectively.
But wait a minute, how many of us spend 52 days in hospital?
A more realistic case is Scenario 5 whereby minor accident happens to us. Your feet swells without your permission and you stay only 5 days in hospital and the bill is only S$5,200 with no surgical operations. Now, you will be paying S$4,600 or 89% of the bill under MediShield. If luck is not on your side and you visit a hospital every 5 years, your MediSave savings will be easily depleted before you reach 80. When this happens, many suddenly realized that MediShield is insufficient and need a private plan to fill in the gap. Since private insurance excludes previous medical conditions, you will not be paid for heart related conditions if you have heart problem before you buy the private policy. Therefore it is imperative to buy the insurance before you develop any illnesses since most are guaranteed for renewal without questions. This is especially true because MediShield expects you to die before 86 as you have ZERO coverage when you are 86. Else, it ensures you die poor if you live beyond 86 because you will pay 100% of the medical bills.

An Ideal Private Insurance Plan

From my earlier blog, statistics showed that private insurance companies pay S$22 out of S$100 premium collected while CPF MediShield pays S$53 out of S$100. Claiming insurance may be one of the factors as there are many limitations and constraints especially the micro clauses in the contract dealing with historical medical conditions. But since MediShield has its weaknesses, you would like to maximize your money on a policy that pays the most and covers better than MediShield.
For full coverage (ie. zero payment), the premiums are expensive especially when you grow older. We have to access if we are able to afford the premium because it costs only $42/year when you are young but $7000/year if you are old. Without income after retirement, can you afford to pay the premium at old age? Many jump into buying policies that benefit them in the short term and forget that the premiums are much higher when they are old.
So the criteria for private Insurance are:

1. It should be better than MediShield;
2. It should pay most of the medical bills;
3. In case of hospitalization, the insurance payout should be substantially higher against the premiums paid over the years (remember ROI?); and
4. The policy should be affordable till old age.

Case 1 � Long Stay in hospital

Using the same scenario as above, MediShield (Ward C) shall be the benchmark.

Scenario	CPF MediShield	GE SupremeShield B Plus	GE SupremeShield B Plus
Room and Board (R&B)	24,200	24,200	24,200
ICU	1,800	1,800	1,800
Day Surgery	728	728	728
Implant	0	0	0
Days in R&B	52	52	52
Days in ICU	2	2	2
Total Hospital Bill	26728	26728	26728
Ward Chosen	C	C	B1
Age	50	50	50
Deductible	1000	1000	2000
Co-Insurance	3042.8	2572.8	2472.8
Insurance pays	21885.2 or 81.88%	23155.2 or 86.63%	22255.2 or 83.27%
You pays	4842.8	3572.8	4472.8
Years policy is valid	10	10	10
Claims/Premiums	18.33	9.82	9.44

With Great Eastern Supreme Shield B Plus, it covers more for the same Ward C plan. Even if you upgrade to Ward B1, the medical bill foot by you is still lower than CPF MediShield.
If the policy is enforced for the last 10 years (or you have paid 10 years of premiums), the Claims/Premiums ratio will reveal the value of this policy. With lower premium and less coverage, MediShield has a score of 18.33. It implies that the medical claim covers the insurance premiums for the last 18.33 years. For GE Supreme Shield B Plus, both are near to 10 so it implies GE earns little from you.
We conclude that private insurance has its merits for long term hospital stay as it provides better coverage than MediShield. However, we need to compare the various plans to suit personal needs. You can now do so with the excel file.

Case 2 � Short stay in hospital

As illustrated above, MediShield is weak in pure R&B charges. Let's see how private insurances fare.

Scenario	CPF MediShield	AIA HealthShield Gold Elite	Aviva MyShield Plan 3
Room and Board (R&B)	5,200	5,200	5,200
ICU	0	0	0
Day Surgery	0	0	0
Implant	0	0	0
Days in R&B	5	5	5
Days in ICU	0	0	0
Total Hospital Bill	5200	5200	5200
Ward Chosen	B2	B2	B2
Age	50	50	50
Deductible	1500	1500	1500
Co-Insurance	150	370	370
Insurance pays	600 or 11.54%	3330 or 64.04%	3330 or 64.04%
You pays	4600	1870	1870
Years policy is valid	10	10	10
Claims/Premiums	0.5	0.75	1.53

Both AIA HealthShield Gold Elite and Aviva MyShield Plan 3 offer to pay 64.04% of the bill compared to MediShield's 11.54%. Now, with the Claims/Premium ratio, ceteris paribus, we see that Aviva MyShield Plan 3 is better than AIA HealthShield Gold Elite due to lower premiums.

Case 3 � Typical Surgical mid-term stay

Let's consider a case study of a mid-term stay with coronary artery bypass graft surgery (Example from Prudential website).

Scenario	CPF MediShield	Prudential PRUshield A+	NTUC Enhanced IncomeShield Basic + ASSIST rider
Room and Board (R&B)	5870	5870	5870
ICU	1630	1630	1630
Day Surgery	9000	9000	9000
Implant	2400	2400	2400
Days in R&B	7	7	7
Days in ICU	2	2	2
Total Hospital Bill	18900	18900	18900
Ward Chosen	B2	B2	B2
Age	52	52	52
Deductible	1500	1500	1500
Co-Insurance	369.75	1740	1690
Insurance pays	5726 or 30.3%	15660 or 82.86%	17010 or 90%
You pays	13174	3240	1890
Years policy is valid	10	10	10
Claims/Premiums	10.86	4.56	4.17

Private insurances always place their example to their advantage. In this example, MediShield's weakness is exposed as you have to pay 70% of the medical bill. Though the Claims/Premiums ratio is high, forking out $13,174 may wipe out most of your MediSave account. Comparing with Prudential PRUshield A+ and NTUC Enhanced IncomeShield Basic + Assist Rider, both private plans cover most of the costs with the NTUC paying the most out of the 3 plans. However, its premium is also higher as compared with PRUshield.

Benchmarks

To compare policies, benchmarks are introduced. Below are the descriptions:

1. Percentage of bill paid by insurance measures the amount of medical bill paid by the insurance company over the total medical bills. (Higher is better)
2. Claims/Premium paid measures the insurance payout over the premium you paid over the years. (Higher is better)
3. Future Premiums (to be paid till your death) considers your ability to service your premium till you die. (Lower is better)

These factors are given a certain weight to produce the ranking for your consideration.
I hope the excel file will help you get the best plan for your needs.

article About Should I convert from Post-paid to Pre-paid mobile plan? - (all-vga-corner)

Planning for your ideal mobile plan

Many retirees "inherited" the obsolete mobile phones from their children when they upgrade the phones. Since a mobile plan (with a SIM card) is needed to make the old phone come alive, they leave the decision of their mobile plans to their children. Most of their children chose post-paid plan with limited incoming voice calls with no data plan. However, most old folks are wary of making outgoing voice calls because they are not used to the phone and it is chargeable. For some old plans, they are paying more than S$60+ for 300 min outgoing minutes per month. Due to fierce competition over the years, new plans are more competitive at S$25+ for 100 min outgoing. However, many are ignorance of this option when their contract is due. The same applies for students in schools, polytechnics and universities, except their phones are normally smart phones with data plan.
The demand of pre-paid mobile plan is attractive to short-term tourists and our foreign "talents" (aka workers) who rarely use their phone and cannot get credit. The beauty of pre-paid plan lies in the absence of 2-year contract with the telco. This target segment is not demanding of voice mail, text or data plan since their phones are either low-end or obsolete models. So they are compromised to pay a higher price to use pre-paid services.
Stop, read paragraph 2 again. If you believe every word I wrote, then perhaps you need a paradigm shift. Ten years ago, paragraph 2 is politically correct but it is no longer true now. If 50% of Europe is using pre-paid plans, you are a true believer on the myths of using pre-paid plan. Let me tell you why.

Post-paid vs Pre-paid

If a picture paints a thousand words, I hope this table shed lights on the differences.

	Post-Paid	Pre-Paid
Payment mode	After use	Before use
Monthly Bills	Yes	No
Subscription	Yes	No
Contract binding	2 years	None
Free phone bundle	Yes	None
Registration Charge	S$10.70	None
Free incoming voice calls	Yes	Depending on the plans
Free SMS	Yes	Depending on the plans
Free Caller ID	No	Yes
Free Voice Mail	No	Yes
Fee incoming calls	Yes	Depends

 
Yes. That's all for the differences. How about data plan, IDD calls, international roaming? Don't worry. Pre-paid plans cover them and sometimes offer more.
If you are using post-paid, there is no such thing as free outgoing voice call. It has been factored into your month free minutes. That's why you are paying more for 300 or 700 minutes. It is charged at SS$0.16/min if you exceed your allocated free minutes. Many customer service representatives will tell you to choose the highest minutes plan from your maximum usage. So you are choosing 100min/mth plan (S$16 value) if you are using 80min/mth and 300min/mth plan (S$54 value) when you are in fact using 101 min/mth.
Basically, prepaid plan is not restricted by the number of outgoing voice call minutes and number of SMSs. The catch is pay-as-you-use and in fact, more flexible than standard post-paid services. Therefore, get ready for the surprise if you are the frog still hiding in the well.

Pre-paid plans in the market

Being the largest mobile player in Singapore, SingTel has 4 different pre-paid offerings:

• Hi!card (standard prepaid at 8 cents/min during Happy Hour) with top-up options of (15% bonus, S$28, S$30 and S$55)

• Kababayan Card (calling Philippines at 7 cents/min )
• simPATI kangen Card (calling Indonesia at 16-26 cents/min)
• Sawadee Card (calling Thailand at 6 cents/min)

Since we are targeting at Singaporeans who are interested to convert from Post-paid to Pre-paid, cards and top-up options which are targeting for foreigners who wish to make IDD calls will be omitted in our discussion. Hence, we only consider the Hi!card and its top-up options.
Starhub has 2 basic plans � Green (Happy S$128 and Happy Star S$17) and MaxMobile for voice and data plan respectively. Top-up options are Happy (voice) and Happy Stars (data) prepaid. On and off, they introduce some perks to make their pre-paid cards more attractive. Since we are focusing only on voice plan, we shall take MaxMobile out of the equation.
M1 also has 2 pre-paid plans � M Super S$130 and SuperPac. The former targets standard users while SuperPac targets foreigners who live in a different time zone. We shall consider both plans with its top-up options.

Benchmark using a Post-paid plan

For low usage users, we need a benchmark for comparison so we take a standard 100min/mth plan with no data plan at a comparable value of S$25.68 (100 outgoing minutes and 500 SMSs). Over a period of 24 mths, a post-paid plan will cost a subscriber a total of S$616.32. Note that Post-paid plan can receive unlimited incoming call.

	100min/mth	300min/mth
Free outgoing voice minutes	100	300
Free SMS	500	500
Cost for 1 month (S$)	25.68	48.15
Costs over 24 mths (S$)	616.32	1155.60

 

Case studies

For the Pre-paid plan, let make the following presumption for both groups of consumers:

	Old folk	Night shift worker	Businessman
Duration of incoming calls a month (min)	50	75	150
Duration of outgoing calls a month (min)	50	75	100
Average call duration (min)	1	2	3
Calls made during peak period	80%	10%	60%
Calls made during non-peak period	20%	90%	40%
SMS per month	0	500	600

 
A run through the formula reveals the following:

Best plan	Old folks	Monthly bills (S$)		Night shift worker	Monthly bills (S$)		Businessman	Monthly bills (S$)
1	Singtel Hi!Card (S$55)	9.71		Singtel Hi!Card (S$28)	15.96		Singtel Hi!Card (S$28)	32.63
2	Starhub Green	12.75		Starhub Happy Star card (S$17)	18.46		M Card Super S$130	38.75
3	Singtel Hi!Card (15% bonus)	13.25		Hi!Card (S$55)	19.71		Starhub Happy (S$128)	41.58
Post-paid Plan	Standard 100 min/mth	25.68		Standard 300min/mth	48.15		Standard 300min/mth	48.15

 
The results may be surprising for many because 100min/mth plan can be cheaper than S$10/mth. Yes, it happens. By seizing advantages of the off-period period, you are able to make cheap calls thereby reducing the costs of mobile ownership. Either case, we see most pre-paid plans are cheaper than standard post-paid plans if you ignore the free incoming calls. Bear in mind that pre-paid plans are pay-as-you-use so if you have low usage for that month, you can effectively save more. It is a wonderful way of limiting your phone bill.
An excellent example is a night shift worker. Since there is no 200min/mth plan and outgoing voice at 150min/mth, one need to take up the 300min/mth plan as "adviced" by experts. If he/she takes up a pre-paid plan, savings is sizable and even better than a 100min/mth plan. The saving is nearly half of what he is paying for 300min/mth plan. Can you see the beauty?
Even for a businessman with 300min outgoing voice calls, the bill is much cheaper than a standard 300min/mth plan. Yes, it is possible and you can do your own maths.

The balance of the equation

If pre-paid plans are superior in value, why most of us still signing up post-paid plans? The answers are simple. In the beginning, many have no phone and signing a 2-year contract can get a free or discounted phone. Also, we are haunted by the old Pre-paid plans which are unattractive in value as compared to post-paid plans. It may costs twice as much to call out as compared to post-paid plans.
Now, new pre-paid plans are customized for the new market segments to suit the trend. In Europe and USA, pre-paid plans are bundled with phones and some are having free incoming calls (like M1 SuperPac). These pre-paid plans are very attractive as it offers customers good benefits without a contract to tie them down. If they are near to the end of their contract and the phone is working fine, a new pre-paid plan with free incoming call may offer more values to them.
An interesting find is the M1 SuperPac and Starhub Happy Star. They offer data plan and 24-hours free incoming calls so they are in-between pre-paid and post-paid plans. If you really compare the details, they are catered for travellers and adults who are working 9-6pm who cannot answer mobile during this period (ie. Hotel service staffs).
Last but not least, it is important to consider the validity of the card since its last top up. It will make a difference on what is the frequency of top-up. It is crucial if you seldom use the phone. So, how about getting a pre-paid card now?