A health care insurance rider can help take the sting out of large medical bills, allowing policyholders to pay next to nothing or nothing for their treatments. This is because hospitalisation plans typically don’t cover a full medical bill. The insured has to pay a portion of the bill, such as a deductible (the threshold at which the insurance company will start to reimburse the insured for treatments) and a co-payment (the percentage

of the rest of the bill that the insured pays).

For example, if the bill is $10,000, the deductible amount is $3,000, and the co-insurance percentage is 10 per cent, the insured will have to pay the first $3,000, plus 10 per cent of the remaining $7,000 before insurance kicks in. In other words, he pays $3,700 and the insurance company pays $6,300.

Hospital bills for major ailments and critical illnesses can run into the hundreds of thousands, so even with insurance, patients can end up forking out daunting five-figure sums. But having an insurance rider that covers the deductible and co-payment – either partly or totally – he may then pay little or no out-of-pocket expenses.

Having a rider is particularly pertinent amid concerns of mounting health care costs, but some argue it inadvertently drives up health care costs, leading to a vicious circle of overconsumption of treatments and rising premiums.

Riders may encourage the so-called “buffet syndrome” in which the insured goes overboard on medical treatments. Since patients do not feel the pinch of co-sharing the bill, they are more likely to opt for unnecessary or non-essential treatments, or over-consume medical

services. And health care professionals may be tempted to over-treat or overcharge patients.

Indeed, a task force set up by the Life Insurance Association of Singapore, the Ministry of Health, and the Monetary Authority of Singapore found that patients with full coverage racked up bills that were 20-25 per cent higher than that of their co-paying counterparts. This pushes

health care and insurance premiums up for everyone in the longer term.

That said, from a consumer’s perspective, it is advantageous to invest in a rider. A policyholder need not worry if he wants to be attended to by more experienced specialists, to stay in a single room, or be warded at a private hospital. 

Riders don’t cover just deductibles and co-payments. Some are designed for the insured to add on other needs. For instance, some riders pay an allowance for every day that the  insured has to stay in hospital, to help make up for lost income for family breadwinners and the self-employed. Another bonus: choosing to stay in an A, B1, B2 or C ward in a restructured instead of a private hospital may allow the insured to enjoy a daily hospital incentive of between $75 and $300.

Insurance usually offers coverage for standard hospital treatments, and not alternative medicines or treatments. But premium riders such as PruShield Extra (Prudential), AXA General Care, AIA Max Essential, and Aviva’s MyHealthPlus will reimburse the insured for post-hospitalisation care, and even traditional Chinese medicine (TCM ) treatments.

Some other riders, like AXA Home and Great Eastern’s Total Health Plus, even cover home visits by doctors, nurses and physiotherapists, and so are useful for patients with long-term illnesses such as stroke, cancer or dementia.

To encourage speedy recovery, some insurance companies provide get-well incentives. NTUC Income’s Daily Cash Rider includes a get-well benefit upon discharge, Great Eastern’s Total Health includes a lump sum payment of $500 for health supplements or fitness classes,

and AIA offers a discount on its Max Essential premiums for participation in their wellness programme to encourage a culture of holistic wellness and reduce burgeoning health care costs.

Ref: N18