Healthcare costs in Singapore can add up quickly, but the government provides structured financial assistance to ease the burden. One such initiative is MediSave, a national savings scheme that helps Singaporeans cover medical expenses. 

While MediSave is useful, it doesn’t replace the need for health insurance. In this article, we’ll break down how MediSave and health insurance work together, who benefits the most, and what to consider when using both.

Learn more: Health Insurance In Singapore >>

Understanding MediSave

MediSave is a mandatory savings scheme under the Central Provident Fund (CPF). A portion of every working Singaporean’s salary is allocated to their MediSave account, which can be used to pay for certain medical expenses, including hospitalization, outpatient treatments, and some insurance premiums. 

Key MediSave Features:

1. • Contribution rates vary based on age and income, with higher rates for older individuals.
   • Can be used for approved medical expenses, including inpatient stays and selected outpatient treatments.
   • Covers premiums for for Integrated Shield Plans (ISPs) and ElderShield/CareShield Life.

The Role of Health Insurance

While MediSave provides a foundation for healthcare financing, it has limitations. That’s where health insurance comes in. Health insurance policies, including MediShield Life and Integrated Shield Plans, provide additional financial protection against high medical bills.

Why Health Insurance is Important?

• • MediSave covers only up to a capped amount for medical treatments, and the remaining balance must be paid out of pocket or through insurance.
  • Private insurance plans offer more extensive coverage, including higher claim limits and access to private hospitals.
  • Some treatments and specialized care are not covered under MediSave, making insurance a critical safety net.

Using MediSave to Pay for Insurance

One of the biggest advantages of MediSave is that it can be used to pay for certain health insurance premiums. This reduces the out-of-pocket costs for policyholders while ensuring they maintain adequate coverage.

Examples of Eligible Plans:

• • MediShield Life: A basic national health insurance plan covering large hospital bills and outpatient treatments for serious conditions.
  • Integrated Shield Plans (ISPs): Private insurance plans that offer better hospital coverage and can be partially paid using MediSave.
  • CareShield Life: A long-term care insurance scheme providing payouts for severe disability.

Limitations of MediSave for Insurance 

While MediSave is a useful tool, there are restrictions on how much can be used annually to pay for insurance premiums. The Additional Withdrawal Limits (AWLs) cap the amount that can be used for ISPs, meaning policyholders may need to pay the remaining balance in cash.

Things to consider:

• The AWL varies depending on age, so younger individuals have lower limits.
• Premiums for private hospital coverage may exceed MediSave withdrawal limits.
• Supplementary plans require full cash payment and cannot be funded by MediSave.