We often confuse MediSave and MediShield Life with one another because they sound alike.
Truth is, the 2 schemes greatly differ.
Learn how to distinguish them both as we take you through their differences in this article!
Nature of the Scheme
MediSave
As its name suggests, MediSave is a savings account.
Managed by the Central Provident Fund (CPF) Board, it is 1 out of the 4 savings accounts – alongside the Ordinary Account (OA), Special Account (SA) and Retirement Account (RA) – under Singapore’s national savings scheme.
MediSave is intended to alleviate the cost of medical treatment for you and your dependents, where its monies can be used to waive a portion of your medical bills.
Claims on MediSave for healthcare expenses are subjected to the stipulated withdrawal limits.
Find out all that you need to know about MediSave in our comprehensive guide!
MediShield Life
Like CareShield Life and ElderShield, MediShield Life is a healthcare insurance policy dispensed by the CPF Board.
All Singaporeans and Permanent Residents (PRs) are covered under MediShield Life by default. The insurance plan will be inforce for the policyholder’s entire lifetime.
MediShield Life helps to relieve your healthcare expenses for expensive hospitalisation bills, mainly for admissions under Class B2 and C wards. It also defrays the cost of selected outpatient treatments.
Do note that MediShield Life is unlike its predecessor, MediShield. MediShield Life has replaced MediShield since 1 November 2015.
It provides greater coverage for hospitalisation bills and outpatient cancer treatments and does not have a lifetime claim limit compared to MediShield.
More details about MediShield Life may be found in our definitive guide. To understand how CareShield Life and ElderShield differ, you may read our article.
Usability
MediSave
Besides the withdrawal limits imposed on each approved medical procedure, the extent to which you can tap on your MediSave savings is dependent on its balance.
Making claims on your MediSave reduces the remaining amount you have in your account, thereby decreasing its usability since the amount available to cover your other medical expenses has been reduced.
For working individuals, this is less of a concern as their MediSave account is being topped up periodically through salary contributions.
It is more crucial for retirees who have ceased making contributions to their MediSave to monitor its account balance to maintain usability.
MediShield Life
Like MediSave, there are claim limits tied to each medical procedure category for MediShield Life. Claims are also subject to a maximum claim limit of $150,000 per policy year.
Where MediShield Life differs from MediSave is its lifelong usability. There is no lifetime claim limit for MediShield Life.
This means that your MediShield Life will always remain inforce for your entire lifetime, and can be mobilised for as long as you live.
Dependent Coverage
MediSave
MediSave may be mobilised for the payment of selected medical procedures that you and your dependents have undergone.
Dependents include your parents, grandparents, spouse, children, or siblings.
MediShield Life
Unlike MediSave, MediShield Life claims are only allowed for your personal medical expenses.
Extension of Coverage
MediSave
Since MediSave is a savings scheme, insurance-related riders and Integrated Shield Plans (IPs) cannot be purchased to broaden the range of treatments covered, or raise the claim limits stipulated by the CPF Board.
MediShield Life
As an insurance plan, you may enhance the coverage of your MediShield Life by purchasing an IP.
When you purchase an IP, the coverage and claim limits under MediShield Life are extended, mainly in the following areas:
- Coverage for higher ward classes
- Coverage for costs incurred before and after hospitalisation
- Increase in claim limit to as high as $2.5 million yearly
You may fulfil the premium payments for your IP using your MediSave savings. However, this is subject to the withdrawal limit that corresponds to your age.
Discover more about IPs in our guide here.
Topping Up
MediSave
Your MediSave account is funded by your CPF contributions, which are derived from 2 sources: your monthly salary and your employer.
The proportion of CPF contributions allocated to your MediSave is subject to your age.
You may also make voluntary, self-initiated top-ups to your MediSave account.
MediShield Life
Like all insurance policies, premium payments are to be made for MediShield Life. You may mobilise your MediSave savings to pay for MediShield Life premiums, without any limit.
Should you require further assistance to fulfil your MediShield Life premiums, premium subsidies and Additional Premium Support are available.
You may also utilise the MediSave savings of your family members for your MediShield premium payments.
Making Claims
Claims on your medical treatments are to be made on your MediShield Life first, followed by your MediSave should you decide to mobilise the latter.
Claims are subjected to withdrawal limits. Do note that the withdrawal limits that govern MediShield and MediSave Life claims differ.
Should there still be outstanding fees for your medical bill that cannot be covered by MediSave and MediShield Life, you will need to make payment via cash or mobilise your family member’s MediSave savings.
Claiming under MediSave and MediShield Life: An Example
Here is an illustration of a 3-day hospitalisation bill for an individual less than 80 years old. The patient is warded at a public hospital in a B2 Class Ward and above. No psychiatric treatment or surgery was sought during his stay.
| Hospitalisation Fee | $2,800 |
| Less: MediShield Life | ($720) |
| Less: MediSave | ($1,500) |
| Amount to be paid via Cash | $580 |
You may use CPF Board’s MediSave and MediShield Life Claims Calculator to estimate the maximum amount you may claim via MediSave and MediShield Life for your treatment.
MediSave vs MediShield Life: A Summary
| MediSave | MediShield Life | |
| Nature of the Scheme | CPF savings account alongside the OA, SA and RA. MediSave savings are set aside for the payment of healthcare services. | An insurance policy dispensed by the CPF Board. Alleviates costly inpatient (mostly Class B2 or C) and selected outpatient treatments incurred for a lifetime. |
| Usability | The extent to which you can mobilise depends on your account balance. | No lifetime claim limit. It hence remains inforce throughout your lifetime and can be mobilised for as long as you live. |
| Dependant Coverage | Yes, for selected medical procedures. | No, only for claims under personal medical treatments. |
| Extension of Coverage | Cannot be extended. | Coverage can be enhanced through the purchase of IPs. |
| Topping Up | Via contributions from your own salary and your employer. Voluntary top-ups are allowed. | Premiums are paid through MediSave. |
| Making Claims | To be utilised (optional) after making claims via MediShield Life. | To be mobilised first, followed by MediSave and/or cash. |
I hope that my contrast of the 2 schemes has provided you clarity on the ways in which MediSave and MediShield Life differ from each other.
While we seek to understand the broad differences between the two schemes, walking through the nuances of financial planning with a qualified individual is helpful.
We collaborate with MAS-licensed financial advisors who are capable of guiding you through your choices proficiently and in an unbiased manner.
Contact us here; we are more than glad to help!
References
- https://www.cpf.gov.sg/member/healthcare-financing/medishield-life
- http://graphics.straitstimes.com/STI/STIMEDIA/2015/medishield-faq/faq-index.html
- https://www.moh.gov.sg/home/our-healthcare-system/medishield-life/what-is-medishield-life/how-to-make-a-medishield-life-claim
- https://www.cpf.gov.sg/member/healthcare-financing/medishield-life/medishield-life-premiums-and-subsidies
- https://www.moh.gov.sg/cost-financing/healthcare-schemes-subsidies/medishield-life/medishield-life-premiums-and-subsidies
- https://www.cpf.gov.sg/member/tools-and-services/calculators/medisave-medishield-life-claims
