Health insurance
Content
Intro
Should a Christian buy insurance?
Healthcare in Singapore
Medisave and Eldershield
Discussing Eldershield with a patient
A PowerPoint presentation
Reference
Intro
I have been asked about health insurance by patients and friends. Managing money was never part of my formal education in Singapore. Likewise during my medical undergraduate days, health insurance and the various social assist schemes were never taught. That was more than 20 years ago. I don’t think much has changed since.
Health insurance products can be difficult to understand. It is hard for a poorly informed person to measure his own risk and decide on the correct product, made worse because such information is not readily available. Most people choose insurance products based on their gut feelings or fear; and the sales pitch by the insurance agent. A doctor who understands the workings of the health care system can better advise his patient on his health insurance needs. This is after taking into account patient medical condition and financial background. A good doctor is a neutral and informed patient advocate.
As a Christian doctor to whom the topic of insurance is posed, I believe this is a fantastic opportunity to find out more about the ideas, concerns and expectations of the individual. When relating to Christian patients, I would like recollect God’s providence and then bring in the concept of planning financially for our health needs. (Genesis 9:3, Job 38:41, Matthew 6:31-32, Matthew 7:11, Luke 12:24, Philippians 4:19)
The discussion below starts with the spiritual arguments on insurance. Then I will do an overview of the Singapore healthcare system with a focus on insurance and followed by a real case study. If you are practicing in another country, it is good to have a good grasp of the your healthcare system. Understanding the spiritual and financial aspect of insurance will help you to help your patients.
Should a Christian buy insurance?
Christians often struggle with the question of whether to buy insurance and if doing so demonstrates a lack of faith. This is a healthy struggle, and believers need to examine the Scriptures and come up with an answer they can defend biblically. Insurance can be seen as a lack of faith, love of money, prudent planning, or possibly wise stewardship of funds. Each person’s conditions and convictions will be different.
The concept of insurance is not specifically mentioned in the Bible. Different believers may come to different personal convictions. Romans 14 provided a good platform for making such decisions. Romans 14:1-4 says that such situations call for respect of others’ convictions. Romans 14:5 say believers have a responsibility to make up our own minds. Romans 14:22-23 states that whatever we decide must be an act of faith.
Here are some of the biblical principles to guide us. We are to obey the authorities over us. Thus, when we are required by law to have insurance, such as car insurance and HDB home protection scheme, we must comply. For me as a doctor in a public health institution, my organization needs me to be covered by a medical practice insurance. I am now under Medical Protection Society MPS, and had been since I was a houseman.
We are to take care of our families. Thus, we should plan ahead for the future benefit of our families. This could also include preparing for the undesired and unforeseeable early demise of a parent. God certainly advocates planning ahead. Genesis 41 tells the story of Joseph wise planning not only saved the nation of Egypt but also the people of Israel. Luke 14:25-33 advised pre-believers to count the cost of being a disciple of Jesus. The same concept can be applied to buying insurance.
For me and my family, we are covered by Medishield which is Singapore national health insurance scheme. It is very affordable. And I have a car insurance and a house fire insurance. I do buy travel insurance. My wife and I do not have life insurance. We cancelled our life insurance after 2008 financial crisis. I researched and came to my own conclusion that all forms of insurance are an expense and cannot be confused with savings scheme or investments. The insurance industry has done a good job in convincing people to buy life insurance as a form of investment. When insurance agents talks to me about my financial planning, they will always come the same conclusion that I am underinsured and need to upgrade my insurance plan. . I believe most people are overpaying for their life insurance. The 2008 crisis taught me that these financial institutions themselves may have a poor financial foundation and their projected payouts are often exaggerated.
Well, this is just my own opinion.
Singapore health care system
Singapore had been rated 6th in worldwide survey by World Health Organization in 2000. Subsequently WHO did not redo the survey because of the complexities of such a survey. In 2012 Bloomberg rated Singapore as the world’s healthiest country, followed closely by Italy, Australia and Switzerland. The definition of a healthy country meant having a healthy living culture, a strong healthcare foundation resulting in longer life expectancy and lower death rates.
For the average Singapore, the government takes the following approach to make healthcare affordable
· Government subsidies in public hospitals and outpatient clinics. This is the main reason of the lower health care cost in Singapore
· Medisave – A compulsory national savings scheme incorporated in Central Provident Fund CPF
· Medishield and Eldershield. Both are national medical insurance.
· Medifund – A government endowment fund to help poor Singaporeans who have no savings or health insurance
Healthcare costs has been rising faster than inflation. I think most of the increase is due to new technology that promise much, high wages, defensive medicine and ligitation. Nevertheless in Singapore, I believe we have a better than average returns to cost. And the government has promised to help the needy. Working in a public health institution, I vouch this is true.
Medisave and Eldershield
Medishield and Eldershield are Singapore national health insurance. They operate as an opt out scheme. As a pure insurance scheme, both act by pooling the risk of the population. They are not subsidies or a savings program. Therefore there is no surrender value. To understand how insurance work as a financial product is the simple equation below
Revenue in = Revenue out for the insurance company
or
Total premiums collected = Total payouts + operating expense of the insurance company
Most people will spend on more premiums than on receiving payouts in their lifetime. Therefore all insurance products must be understood as an expense and not an investment.
Singapore Ministry of Health describes Medishield as follows
“MediShield is a low cost basic medical insurance scheme. Introduced in 1990, the government designed MediShield to help members meet large Class B2/C hospitalisation bills, which could not be sufficiently covered by their Medisave balances. To avoid problems associated with first-dollar, comprehensive insurance leading to unnecessary over-consumption of healthcare services, MediShield operates with co-payment features such as co-insurance and deductible where patients share part of the responsibility for his medical expenses. The co-insurance and deductible can be paid using Medisave or cash”
The Central Provident Fund CPF website describes Eldershield as follows
“ElderShield is a severe disability insurance scheme introduced by the Government to provide insurance coverage to elderly Singaporeans and permanent residents who require long-term care. ElderShield would provide them with the basic financial protection and help defray out-of-pocket expenses in the event of severe disabilities.”
Insurance websites marketing Eldershield like NTUC income state that up to 1 in 12 elderly persons suffer from disabilities that make them incapable of doing simple everyday activities. Eldershield premiums are paid yearly from age 40 year to 65 years old. The premiums are fixed at age 40 years with no increase after that. The insurance covers the person for life and provides a cash payout every month of $400 up to a maximum of 72 months for those who are severely disabled and are unable to do 3 or more of the following activities of daily living
· Washing
· Dressing
· Feeding
· Toileting
· Mobility
· Transferring
Discussing Eldershield with a patient
Mrs D was a 39 years and my regular patient. The term “patient” is a misnomer because Mrs D had no chronic illness. She would normally see me for acute illness and opportunistic health screening.. Her parents had diabetes and hypertension but no heart disease, stroke or cancer. Mrs D did not smoke and had no chronic illness. Her blood pressure, lipds panel and fasting glucose were all in the normal range. Hence her calculated 10 year cardiovascular risk was low.
One day Mrs D received a letter from Great Eastern Life Insurance informing her she was eligible for Eldershield because she would be turning 40 years old. Mrs D was then insured under Medishield. She asked me if she should take up Eldershield. I discussed with her the pros and cons of applying for Eldershield
Pros for applying for Eldershield
· Mrs D was healthy and was qualified to buy Eldershield
· The insurance quotes that 1 in 12 elderly would suffer from significant disabilities. This statistic was used to show the benefit of being covered by Eldershield insurance
· Yearly premiums are fixed and not affected by inflation. She would have to pay $217 yearly for the next 25 years making a total of $5425.
Cons for applying for Eldershield
· Mrs D was healthy. Her risk of severe disability was less than population risk; that is less than 1 in 12 in being disabled.
· The payouts of $400 per month were very low in relative to the total premiums paid over the years. That is the financial cost-returns ratio is very poor. The maximum total possible payout over 72 months would be $28800 against $5425 in premiums. Assuming 1 in 12 elderly would eventually make claims. Then for every 12 people who sign up, the insurance company profit would be
$5425 x 12- $28800 = $36300
Furthermore the pay out is not in a lump sum. If she were to die before 72 months, the payout would stop; her family would not receive any payout. And if she qualified for claims 30 years later, the inflation adjusted claim amount (assuming yearly 3% inflation) would be 0.9730 X $400 = $160 per month in today valuation.
· One of the conditions of claims was that the payouts would only begin after a successful claim was made. There would be no backdating of payouts. I told Mrs D that most patients who are severely disabled would likely to be cognitively impaired as well. She would have to prepare her husband or children to make the claims on her behalf. Severely disabled patients would also have a shortened life span. It would also be unlikely they would receive the full 72 months of payouts.
My reflections on Eldershield
Eldershield is designed for a very select population. There are not many conditions that would result in the inability to perform activities of daily living. Such conditions are usually neurological in nature. Examples are severe stroke, severe Parkinsonism, moderate to severe dementia. Patients’ with mild stroke or early stages of Parkinsonism and dementia are still usually independent. Other serious conditions like cancer and ischemic heart disease usually do not result in severe disability to qualify for claims under Eldershield. There is no evidence that Parkinsonism is hereditary. My general advice would be to find a balance between the health condition and financial needs of the individual. I would only recommend patients with risk factors for stroke and family history of Alzheimer to sign up with Eldershield.
For the record, I am on the Medisave scheme but not Eldershield.
A PowerPoint presentation
In March 2014 I made a presentation of Singapore national health insurance scheme to my fellow doctors and nurses in my clinic. Here I have attached my powerpoint and the narrated version on youtube. You may download my powerpoint and youtube for use.
Content
Intro
Should a Christian buy insurance?
Healthcare in Singapore
Medisave and Eldershield
Discussing Eldershield with a patient
A PowerPoint presentation
Reference
Intro
I have been asked about health insurance by patients and friends. Managing money was never part of my formal education in Singapore. Likewise during my medical undergraduate days, health insurance and the various social assist schemes were never taught. That was more than 20 years ago. I don’t think much has changed since.
Health insurance products can be difficult to understand. It is hard for a poorly informed person to measure his own risk and decide on the correct product, made worse because such information is not readily available. Most people choose insurance products based on their gut feelings or fear; and the sales pitch by the insurance agent. A doctor who understands the workings of the health care system can better advise his patient on his health insurance needs. This is after taking into account patient medical condition and financial background. A good doctor is a neutral and informed patient advocate.
As a Christian doctor to whom the topic of insurance is posed, I believe this is a fantastic opportunity to find out more about the ideas, concerns and expectations of the individual. When relating to Christian patients, I would like recollect God’s providence and then bring in the concept of planning financially for our health needs. (Genesis 9:3, Job 38:41, Matthew 6:31-32, Matthew 7:11, Luke 12:24, Philippians 4:19)
The discussion below starts with the spiritual arguments on insurance. Then I will do an overview of the Singapore healthcare system with a focus on insurance and followed by a real case study. If you are practicing in another country, it is good to have a good grasp of the your healthcare system. Understanding the spiritual and financial aspect of insurance will help you to help your patients.
Should a Christian buy insurance?
Christians often struggle with the question of whether to buy insurance and if doing so demonstrates a lack of faith. This is a healthy struggle, and believers need to examine the Scriptures and come up with an answer they can defend biblically. Insurance can be seen as a lack of faith, love of money, prudent planning, or possibly wise stewardship of funds. Each person’s conditions and convictions will be different.
The concept of insurance is not specifically mentioned in the Bible. Different believers may come to different personal convictions. Romans 14 provided a good platform for making such decisions. Romans 14:1-4 says that such situations call for respect of others’ convictions. Romans 14:5 say believers have a responsibility to make up our own minds. Romans 14:22-23 states that whatever we decide must be an act of faith.
Here are some of the biblical principles to guide us. We are to obey the authorities over us. Thus, when we are required by law to have insurance, such as car insurance and HDB home protection scheme, we must comply. For me as a doctor in a public health institution, my organization needs me to be covered by a medical practice insurance. I am now under Medical Protection Society MPS, and had been since I was a houseman.
We are to take care of our families. Thus, we should plan ahead for the future benefit of our families. This could also include preparing for the undesired and unforeseeable early demise of a parent. God certainly advocates planning ahead. Genesis 41 tells the story of Joseph wise planning not only saved the nation of Egypt but also the people of Israel. Luke 14:25-33 advised pre-believers to count the cost of being a disciple of Jesus. The same concept can be applied to buying insurance.
For me and my family, we are covered by Medishield which is Singapore national health insurance scheme. It is very affordable. And I have a car insurance and a house fire insurance. I do buy travel insurance. My wife and I do not have life insurance. We cancelled our life insurance after 2008 financial crisis. I researched and came to my own conclusion that all forms of insurance are an expense and cannot be confused with savings scheme or investments. The insurance industry has done a good job in convincing people to buy life insurance as a form of investment. When insurance agents talks to me about my financial planning, they will always come the same conclusion that I am underinsured and need to upgrade my insurance plan. . I believe most people are overpaying for their life insurance. The 2008 crisis taught me that these financial institutions themselves may have a poor financial foundation and their projected payouts are often exaggerated.
Well, this is just my own opinion.
Singapore health care system
Singapore had been rated 6th in worldwide survey by World Health Organization in 2000. Subsequently WHO did not redo the survey because of the complexities of such a survey. In 2012 Bloomberg rated Singapore as the world’s healthiest country, followed closely by Italy, Australia and Switzerland. The definition of a healthy country meant having a healthy living culture, a strong healthcare foundation resulting in longer life expectancy and lower death rates.
For the average Singapore, the government takes the following approach to make healthcare affordable
· Government subsidies in public hospitals and outpatient clinics. This is the main reason of the lower health care cost in Singapore
· Medisave – A compulsory national savings scheme incorporated in Central Provident Fund CPF
· Medishield and Eldershield. Both are national medical insurance.
· Medifund – A government endowment fund to help poor Singaporeans who have no savings or health insurance
Healthcare costs has been rising faster than inflation. I think most of the increase is due to new technology that promise much, high wages, defensive medicine and ligitation. Nevertheless in Singapore, I believe we have a better than average returns to cost. And the government has promised to help the needy. Working in a public health institution, I vouch this is true.
Medisave and Eldershield
Medishield and Eldershield are Singapore national health insurance. They operate as an opt out scheme. As a pure insurance scheme, both act by pooling the risk of the population. They are not subsidies or a savings program. Therefore there is no surrender value. To understand how insurance work as a financial product is the simple equation below
Revenue in = Revenue out for the insurance company
or
Total premiums collected = Total payouts + operating expense of the insurance company
Most people will spend on more premiums than on receiving payouts in their lifetime. Therefore all insurance products must be understood as an expense and not an investment.
Singapore Ministry of Health describes Medishield as follows
“MediShield is a low cost basic medical insurance scheme. Introduced in 1990, the government designed MediShield to help members meet large Class B2/C hospitalisation bills, which could not be sufficiently covered by their Medisave balances. To avoid problems associated with first-dollar, comprehensive insurance leading to unnecessary over-consumption of healthcare services, MediShield operates with co-payment features such as co-insurance and deductible where patients share part of the responsibility for his medical expenses. The co-insurance and deductible can be paid using Medisave or cash”
The Central Provident Fund CPF website describes Eldershield as follows
“ElderShield is a severe disability insurance scheme introduced by the Government to provide insurance coverage to elderly Singaporeans and permanent residents who require long-term care. ElderShield would provide them with the basic financial protection and help defray out-of-pocket expenses in the event of severe disabilities.”
Insurance websites marketing Eldershield like NTUC income state that up to 1 in 12 elderly persons suffer from disabilities that make them incapable of doing simple everyday activities. Eldershield premiums are paid yearly from age 40 year to 65 years old. The premiums are fixed at age 40 years with no increase after that. The insurance covers the person for life and provides a cash payout every month of $400 up to a maximum of 72 months for those who are severely disabled and are unable to do 3 or more of the following activities of daily living
· Washing
· Dressing
· Feeding
· Toileting
· Mobility
· Transferring
Discussing Eldershield with a patient
Mrs D was a 39 years and my regular patient. The term “patient” is a misnomer because Mrs D had no chronic illness. She would normally see me for acute illness and opportunistic health screening.. Her parents had diabetes and hypertension but no heart disease, stroke or cancer. Mrs D did not smoke and had no chronic illness. Her blood pressure, lipds panel and fasting glucose were all in the normal range. Hence her calculated 10 year cardiovascular risk was low.
One day Mrs D received a letter from Great Eastern Life Insurance informing her she was eligible for Eldershield because she would be turning 40 years old. Mrs D was then insured under Medishield. She asked me if she should take up Eldershield. I discussed with her the pros and cons of applying for Eldershield
Pros for applying for Eldershield
· Mrs D was healthy and was qualified to buy Eldershield
· The insurance quotes that 1 in 12 elderly would suffer from significant disabilities. This statistic was used to show the benefit of being covered by Eldershield insurance
· Yearly premiums are fixed and not affected by inflation. She would have to pay $217 yearly for the next 25 years making a total of $5425.
Cons for applying for Eldershield
· Mrs D was healthy. Her risk of severe disability was less than population risk; that is less than 1 in 12 in being disabled.
· The payouts of $400 per month were very low in relative to the total premiums paid over the years. That is the financial cost-returns ratio is very poor. The maximum total possible payout over 72 months would be $28800 against $5425 in premiums. Assuming 1 in 12 elderly would eventually make claims. Then for every 12 people who sign up, the insurance company profit would be
$5425 x 12- $28800 = $36300
Furthermore the pay out is not in a lump sum. If she were to die before 72 months, the payout would stop; her family would not receive any payout. And if she qualified for claims 30 years later, the inflation adjusted claim amount (assuming yearly 3% inflation) would be 0.9730 X $400 = $160 per month in today valuation.
· One of the conditions of claims was that the payouts would only begin after a successful claim was made. There would be no backdating of payouts. I told Mrs D that most patients who are severely disabled would likely to be cognitively impaired as well. She would have to prepare her husband or children to make the claims on her behalf. Severely disabled patients would also have a shortened life span. It would also be unlikely they would receive the full 72 months of payouts.
My reflections on Eldershield
Eldershield is designed for a very select population. There are not many conditions that would result in the inability to perform activities of daily living. Such conditions are usually neurological in nature. Examples are severe stroke, severe Parkinsonism, moderate to severe dementia. Patients’ with mild stroke or early stages of Parkinsonism and dementia are still usually independent. Other serious conditions like cancer and ischemic heart disease usually do not result in severe disability to qualify for claims under Eldershield. There is no evidence that Parkinsonism is hereditary. My general advice would be to find a balance between the health condition and financial needs of the individual. I would only recommend patients with risk factors for stroke and family history of Alzheimer to sign up with Eldershield.
For the record, I am on the Medisave scheme but not Eldershield.
A PowerPoint presentation
In March 2014 I made a presentation of Singapore national health insurance scheme to my fellow doctors and nurses in my clinic. Here I have attached my powerpoint and the narrated version on youtube. You may download my powerpoint and youtube for use.
| national_health_insurance.pptx |
Reference
1. CPF information on Eldershield
http://mycpf.cpf.gov.sg/CPF/my-cpf/Healthcare/PvdHC9.htm
2. NTUC Eldershield information
https://www.income.com.sg/insurance/ElderShield/index.asp
3. Healthcare in Singapore
http://en.wikipedia.org/wiki/Healthcare_in_Singapore
4. Bloomberg healthiest city in the world
http://www.bloomberg.com/slideshow/2012-08-13/world-s-healthiest-countries.html#slide21
5. Material from Should Christian buy insurance is taken from
http://www.gotquestions.org/Christian-insurance.html
Article 1st pubished on 28 Jul 2014
by Benjamin Cheah
1. CPF information on Eldershield
http://mycpf.cpf.gov.sg/CPF/my-cpf/Healthcare/PvdHC9.htm
2. NTUC Eldershield information
https://www.income.com.sg/insurance/ElderShield/index.asp
3. Healthcare in Singapore
http://en.wikipedia.org/wiki/Healthcare_in_Singapore
4. Bloomberg healthiest city in the world
http://www.bloomberg.com/slideshow/2012-08-13/world-s-healthiest-countries.html#slide21
5. Material from Should Christian buy insurance is taken from
http://www.gotquestions.org/Christian-insurance.html
Article 1st pubished on 28 Jul 2014
by Benjamin Cheah