Wednesday, February 2, 2011

NUH makes mistake, construction worker pays through nose

After reading the following article, I was wondering why is it that when others make mistakes, we have to pay for them? Please read on..

Letter by Tan Guan Seng to Strait Times Forum:
I HAD an accident at work last June. Initially, the interim hospital bill from the National University Hospital indicated a subsidy. But when the final bill was given to me, I was shocked. The bill for my stay at a C-class ward amounted to an unsubsidised total of $147,000.
I was discharged on Aug 13 last year and the reason for the difference between what was stated in the interim bill and the final one was not explained at all.
Only after I asked was I told that the Ministry of Health had withdrawn the subsidy as the accident was work- related.
About a month after my discharge, I applied for a waiver of the outstanding amount of about $122,000 through my MP. This was after my company had paid $25,000.
As far as I am aware, the hospital did not reply to the appeal.
Three months later, after more deductions from my MediShield ($41,000) and Medisave accounts ($31,000), I was informed that the hospital was in the process of scheduling an instalment payment plan for the remaining $50,000.
Response by NUH:
MR TAN Guan Seng spent most of his hospitalisation at the high-dependency and intensive-care units during his two-month stay at the National University Hospital.
His hospitalisation charges were originally pegged at the subsidised rate as our admission office staff had overlooked that it was a work-related injury. We apologised to him for this.
When Mr Tan's wife made a request to upgrade him to a private ward, the hospital's staff informed her that the estimated bill would exceed the quantum to be borne by Mr Tan's employer under the Work Injury Compensation Act.
Under the Act, Mr Tan's employer is liable to pay medical expenses for up to one year from the date of the accident, subject to a cap of $25,000.
However, hospitals are given the discretion to downgrade patients admitted for work-related injuries and who have financial difficulties to subsidised status, if they meet the criteria after a financial assessment.
We empathise with Mr Tan's situation. In our bid to assist him, we advised him to undergo a financial assessment to confirm if he could qualify for higher subsidies for his medical expenses. Mr Tan did not take up the offer. 
So from what I gather from the letter and the response, there was a mistake made by a staff of NUH who overlooked the subsidy requirements, causing the bill to be not subsidized in the end. This mistake was not revealed when the patient was discharged following 2 whole months of hospital stay. It was only revealed after the patient inquired about the pricey bill. This is tragic misrepresentation. Tragic because the patient was given the impression that his bills would be subsidized if he were to stay in a class C ward. Since NUH is willing to acknowledge their mistake, NUH should go a step further and provide the subsidy. After all, an apology without appropriate action is not much of an apology.

I wonder why there has to be a "financial assessment to confirm if he could qualify for higher subsidies" (which presumes that he qualified for a subsidy in the first place) when he was not eligible for any subsidy. I also wonder if the patient was in a good state of mind to make decisions on financial assessment. It is very sad that patients often have to make difficult financial decisions when they are at their weakest states. Perhaps, there should be some guidelines to make financial assessment without requiring the patient's input. This would allow the financial assessment to be more robust, and less susceptible to human error (staff or patient). This would reduce the number of cases where people can't pay for their medical fees. It does not make sense to charge a construction worker a 6-digit sum when he probably does not even have a 5-digit savings in his combined bank accounts. Perhaps there should be a system set up to automatically screen through every patient's financial ability before deciding where best to ward them. This would prevent low-income families from being bogged down by heavy bills just because the hospital allows them to be upgraded to a private ward. This should not even be allowed, unless the patient can provide substantial evidence of financial strength to justify upgrading to a private ward.

Things to learn from this incident: Everybody is responsible for their own financial situation, even if you are injured and not in the best state of mind to make decisions. Medishield does not cover all your H&S as it is not "as charged". Medisave is your money too, so don't waste it unnecessarily. Get financial assessment in the presence of a trusted friend/loved one so they can provide good counsel.

The letter by Tan Guan Seng can be found here.
The response by NUH can be found here.

Singaporeans will work as long as possible (till 85?)

I read the following news "CPF savings insufficient for retirement: survey" with a tinge of sadness:


Quote:
According to the survey, seven in 10 believe their CPF savings will provide only some or little of their retirement income.

In response to that, Singaporeans are turning to alternative means to take them through their silver years.

Citibank said that the alternatives could include proceeds from investment and insurance products.

Out of these products, the survey found that the most popular is whole life insurance.

Some 86 per cent of respondents currently hold or intend to purchase whole life insurance.

It added that the next most popular products are endowment plans.

Overall, 52 per cent of respondents said they would continue to work for as long as possible.

Whole life insurance is not meant to be a retirement income supplement. It's primary intention is to provide income for the beneficiaries upon the insured person's demise (or TPD/medically certified terminal illness). Trying to convert whole life into a retirement income supplement would not be financially prudent.

Retirement income supplement should consist of regular payouts over a long period of time. Good examples would be annuities or the CPF Life schemes. Dividend payouts from equities are passive income but should be considered as a bonus due to the high risk of fluctuations.

Endowment plans would probably give higher returns than the local savings account, but do take note that these plans are not meant for protection. Generally, term plans provide maximal protection and zero (-100%) savings, whole life provides some protection and slightly negative savings (after factoring in inflation), endowment plans provide minimal protection and slightly positive savings (after factoring in inflation).

Considering that most of the respondents considers whole life insurance and endowment plans as an alternative for retirement income supplementation, it would not be surprising that most of them will have to work for as long as possible. For whole life insurance that requires one to pay till age 85, I wonder if they can really work that long...

Everybody has a different financial situation so it would be prudent to go through your needs before deciding what to get. If you are not convinced that you need a product, please do not buy it. Personally, I have an insurance portfolio to cover me in a wholesome manner. I am still looking to see how I can better cover myself in the light of change in family size, hence the wife selling insurance.

The news article can be found here.

IFA forces immediate family members to buy insurance from him

Forced insurance?

Quoted:

Fourth, one of my close family member was diagnosed with colon cancer a week ago. The surgical and hospital bill was a big shocker. Despite it is a B1 government ward, it would not have been affordable for many average Singaporeans. I checked the MOH website for statistics on colon cancer and I cannot find the average bill size of it. Now I know why. Fortunately when I entered the industry years ago, I force all my immediate family members to buy insurance from me. Yes, I “forced them” as I did not give them any choice since I will become the default insurer if they become seriously ill without coverage. I am very proud of what I did. The hefty medical bill is going to be mostly reimbursed from the insurer. The existence of insurance coverage was the ONLY determining factor whether should the colon cancer be treated or not. In other words, without the policy, the bill will be too high to afford it.

I am of the inclination that the ends (no matter how commendable) does not justify the means. I feel that the consumer (regardless of family ties) should be educated before making informed decisions. One thing to learn from this example is that your immediate family member's coverage will immediately affect you. I shall nudge my wife to educate our immediate family members during this festive season.

The link to the article is found here.

Tuesday, February 1, 2011

Second case study

Case #2: Young salesman
Annual salary: 18k
Current coverage: H&S, 95k L/TPD + 50k CI

Insights: The person who sold him the 20-yr limited payment life plan should not have done so. The premium for this policy alone was more than 10% of his annual income and the coverage is minimal.

Recommendation: Get additional L/TPD and CI coverage. In this situation, only way to achieve this would be via term plan as the existing annual premium is already more than 10% of his annual income. Client has to be advised that his annual premium is at a rather high percentage of his annual income.

After-thought:
This reminds me of this case, where a young man who passed away with only a 30k L/TPD plan and a 50k PA plan and is only eligible to claim 85k (and another 50k if the appeal for PA claim is successful).

If he had bought a term plan instead, the claim would be more able to sustain the family of this young man.

It is very sad that some insurance agents sell to clients what the clients want instead of what they need. I will keep reminding my wife to sell what is needed.

First case study

Obviously this should have been me... but it's not.

Some terminologies explained:
Young: <40 yrs old
Middle-aged: 40-60 yrs old
Aged: >60 yrs old
L/TPD : Life/Total Permanent Disability
CI : Critical Illness (a.k.a. Dreaded Disease or DD)
PA: Personal Accident

Case #1: Young engineer
Annual income: 45k
Current coverage: 220k L/TPD + 80k CI

Insights: No H&S is a big no-no. CI coverage seems too little to be of much help in today's context of ever-rising medical bills.

Recommendation: Get H&S and additional CI coverage. In this situation, best way to achieve this would be via term plan as the existing annual premium is almost 10% of his annual income.

How it all began

Being well-informed (imho) of the financial aspects in life, I have 3 independent financial advisors (IFA) from Finexis, Philips, PIAS and 1 tied advisor from Great Eastern. I don't need more (possibly biased) advice, I need unbiased guidance.

My wife needs to take care of our child (and future children) full time so the idea of letting her manage our family's financial health came about! She shall sell insurance!

Besides looking after our family's financial health, she can also provide assistance to our family and friends, to provide unbiased guidance. This can be achieved because her income stream from this is not a priority in our family.

So she went on to figure out the tests (M5, M9, HI) that she needs to take in order to begin. That took about 2 weeks to complete studying and ace the tests

Now she is an IFA and the journey begins...