Monday 23 July 2012

Medical insurance crucial for parents

Their hospital bills may otherwise become a big burden to families
By Goh Eng Yeow, The Straits Times, 22 Jul 2012

In Singapore, the average person can expect to live to 85 or longer, given medical advances and improvements in our quality of life in the past few decades.

But while this may be a blessing, people's medical expenses can become a huge burden to their families if they are ill for a prolonged period of time.

As one character in the recent Korean drama Twinkle Twinkle, shown on cable TV, noted, the best gift parents can bestow on their children is to stay healthy in old age and not burden them with hefty hospitalisation bills.

Some may consider her hard-nosed observation callous, considering that the character's on-screen mother was going blind from glaucoma and needed medical attention urgently.

But in Asian societies where looking after the elderly is often the duty of the family, caring for them when they are gravely ill can be both a big emotional and financial drain.

Thus, I found a recent article by my colleague Magdalen Ng, about children helping their parents plan for retirement, particularly apt. At least try to ensure that the financial aspects of looking after your parents when they are old and infirm are taken care of. That is sound advice which many of us in our 40s and 50s, with aged parents, will attest to. Let me cite my own experience.

I started working 26 years ago when my parents were in their late 50s. Then, the Government had just started MediShield, a medical insurance scheme covering hospital stays for chronic illnesses whose premiums can be paid out of the Central Provident Fund (CPF) account.

I signed up my parents for the scheme. It turned out to be one of the shrewdest moves I had made for their golden years.

What is good about MediShield is that because of the large number of people insured under the scheme, the premiums are well within the reach of most Singaporeans. Altogether, I pay less than $1,000 a year to have both my parents insured under MediShield.

About 10 years ago, my mum had a stroke and was hospitalised for three months. While shuttling between home, office and hospital was physically exhausting for me, at least I did not have to worry about the hospital bills, as a large portion was paid by MediShield.

Two years ago, my mum had another stroke, and was again hospitalised for three months. MediShield took care of more than half of her hospital bills.

I am of the generation where our parents are not well-educated and have to rely on their children to do the retirement planning for them. It is thus sad to find many in my age group falling into a financial bind because they failed to adopt a similarly proactive approach in getting medical coverage like MediShield for their parents.

The point was driven home when I watched in horror the huge hospital bills chalked up by the 86-year-old father of a friend when he was recently hospitalised in a private hospital.

At first, the ailment was fairly minor - a mild stroke - which would require him to be hospitalised for a few days. But he then developed other medical complications which ended up with him staying at the hospital's intensive care unit for a few weeks.

By then, the bills had run to a few hundred thousand dollars, and I reeled in disbelief when I learnt that he was not medically insured. My friend had worked in the financial sector for 30 years, yet she did not get him medically insured. It turned out to be a very costly oversight.

The cruellest cut is that she is entering her own twilight years and needs every cent she can get for her retirement needs, but she is being saddled with her father's hefty hospital bills which have to be paid for in hard cash.

While the parents of those entering the workforce now are likely to be better educated and more financially savvy, it is unwise to assume they would have made all the necessary medical contingency plans for their golden years.

Thus it pays to be vigilant. Otherwise, when disaster strikes, you may find yourself financially crippled by the hefty hospital bills incurred by your parent.

My parents are now in their 80s, and I am relieved to know they will stay medically insured, after the Government announced in February it would extend MediShield coverage from age 85 to 90.

But it would have been even better if the Government had scrapped the age ceiling on MediShield coverage altogether.

Even with medical advances, it is a big achievement to live well beyond 90. It is great cause for celebration for those who achieve such milestones. But they should not have to live in worry that they may cause their loved ones considerable financial hardship because they no longer get MediShield coverage.

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