Martin Lee @ Sg
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Medical Insurance Co-Payment

Adrian Khiat wrote in to the ST Forum on the moral hazards of having an insurance plan that covers 100% of the hospitalization bill.

I agree with most of his view points.

Anyone who has been to a buffet will know what I mean. The eating behavior is very different when you are paying for a buffet compared to paying for an ala carte meal.

If you do not have to pay a single cent for your entire hospitalization, you will have a greater tendency to go for the best option where wards and treatment are concerned.

Single bed or 6-bedded? Of course you will go for the single bed.

Higher claims will ultimately lead to higher premiums.

The higher premiums that you pay over a lifetime might actually be more than the co-payment that you would have to pay from time to time if you had opted for an insurance plan that requires a little bit of co-payment on your part.

So, before you take up a plan that covers 100% of your hospitalization bills, take a look at the premiums carefully and ask yourself whether you will be able to afford the premiums when you are 60+ or 70+ years old.

Leave a Comment:

Daniel says 9 years ago


I agree to most of his view too. But come to think of it, if given a choice of 100% coverage, why would you choose to get something that does not.

I think most important is individual affordability of premium. If everyone will agree that over time Medical and hospitalization bills will definitely go up and one can afford the premium, why not opt for 100% rather than co-pay.

As comparing to car insurance and hospitalization insurance, car insurance nowadays does not come cheap either but still there are many people buying car (in Singapore).

    lioninvestor says 9 years ago

    The problem is that when everyone is on 100% coverage, the rate of premiums increase will likely be at a faster rate. It is a vicious cycle.

      Daniel says 9 years ago

      I understand that NTUC’s plan does capped the co-insurance at $3000. Will it really help?

      My point is that medical insurance have different packages for different group of customers. Not everyone can afford a Benz or BMW, other alternatives are available for one who really want to have one.


        lioninvestor says 9 years ago

        Hi Daniel,

        Whether it will help, we will know in the long run. NTUC previously had a plus rider which covers 100% of the bill.

        They withdrew it after a couple of years. 😀

Jasmin says 9 years ago

Another alarming part is the escalating medical cost. A simple surgery or ops can easily costs x k. Insurers are not charitable orgs and will add enough buffer to cope with this uncertainty.

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