When comparing between MediSave and MediShield Life, it is easy to get confused between the two healthcare schemes.
According to the Ministry of Health (MOH), MediSave is a national medical savings scheme that helps individuals set aside part of their income to pay for their personal or dependents’ medical expenses.
On the other hand, MediShield Life is a basic health insurance scheme that provides Singapore Citizens and Permanent Residents with universal and lifelong protection against large healthcare bills, regardless of age or health condition.
In this article we highlight the underlying differences between the two medical schemes and how they may be used to cover your medical bills.
Funding & Contributions
As mentioned earlier, MediShield Life is a low-cost insurance medical insurance designed to protect Singaporeans against large hospitalisation bills.
In order to fund healthcare costs and fulfill claims made by beneficiaries, the premiums for MediShield Life are paid using funds from your MediSave account. In this regard, MediSave is similar to a savings account dedicated specifically for medical uses.
So how do you make contributions to your MediSave account? As part of your monthly CPF deductions, a portion of your CPF contributions will automatically be deposited into your MediSave account for future use.
As you become older, a larger proportion of your CPF contributions will be deposited into your MediSave account.
For employees aged below 35 years old, MediSave contributions are capped at 8% of monthly salaries and rises to 10.5% for employees aged 50 and older. Self-employed individuals have to make their own MediSave contributions according to their age, trade income and other factors.
Coverage & Benefits
MediShield Life offers individuals lifelong coverage, regardless of your age or health condition with a maximum claim limit of $150,000 per year. This means that you will be able to claim medical expenses of up to $150,000 annually for the rest of your life.
On the contrary, MediSave does not guarantee you lifelong coverage as you have to ensure that you have enough money in your MediSave account to pay for your medical expenses. As you use your MediSave savings to pay for medical expenses and MediShield Life premiums, the balance in your MediSave account may deplete over time.
This is especially true for retirees who no longer contribute to their CPF accounts. Therefore, it is important for you consider your financial means when deciding on a treatment plan.
Additionally, Medishield Life can only be used to cover an individual’s own medical expenses and cannot be transferred to family member or dependent.
On the other hand, MediSave savings may be used to cover your own medical expenses and that of approved dependents such as your spouse, children, parents, grandparents and siblings. Furthermore, these individuals can be of any nationality, except for your grandparents and siblings, who have to be Singaporeans or PRs.
You may also use your MediSave savings to pay for the premiums for MediShield Life on behalf of your dependents.
Claim Limits
As mentioned earlier, MediShield Life can be used to reduce medical expenses, including costs of hospitalisation or day surgeries, outpatient treatment and long-term care.
Therefore, Medishield Life may be used to offset your initial medical with the remaining amount payable using MediSave (up to certain limits) and/or cash. You may refer to the table below for an example on how your medical bills may be calculated:
| Item | Cost/claims limit |
| Hospital stay (normal ward) | $1,500 per day |
| MediShield Life | $800 per day |
| MediSave | $550 per day |
| Balance payable in cash | $150 |
Let’s say you suffered from a medical condition which caused you to be hospitalised for a day in a normal ward. MediShield Life currently provides benefits of $800 per day for inpatient expenses in a normal hospital ward.
You may use your MediSave savings to cover up to $550 per day for the first two days of hospital admission. Assuming that you have sufficient savings in your MediSave account, you will only need to pay $150 in cash for your hospital bills after deducting the benefits received from MediShield Life and MediSave.
MediShield Life vs Integrated Shield Plans (ISP)
While MediShield Life offers you basic healthcare protection, it does not cover certain medical expenses such as ambulance fees, cosmetic surgery and dental work (except due to accidental injuries).
Therefore, if you wish to supplement your basic healthcare plan, you can apply for an Integrated Shield Plan (ISP) which combines MediShield Life with an additional insurance coverage component provided by a private insurer.
An ISP can help to reduce your out-of-pocket medical costs and provide supplementary coverage on Class A1 and B1 wards in public or private hospitals. Just like MediShield Life, you may use your MediSave savings to pay for your ISP premiums.
Conclusion
In this article, we have highlighted the difference between MediSave and MediShield Life and how they offer you protection against large medical treatment costs.
When paying hospital bills, you can first make claims using Medishield Life and top-up the remaining amount using MediSave savings or cash.
In addition, you may use your MediSave to pay for your MediShield Life premiums or upgrade to a more comprehensive IP plan. When considering between different medical treatment plans, you should always consider your financial condition and the types of healthcare policies you have in place.
