Have you ever received a hospital bill, confident that your Integrated Shield Plan or MediShield Life would cover everything, only to realize you still have to pay a portion out of your own pocket?
If this sounds familiar, you’ve likely encountered two of the most common yet frequently misunderstood health insurance terms: deductible and co-insurance.
1) What Is A Deductible
Think of a deductible as the “entry ticket” you have to buy before your insurance benefits kick in.
A deductible is a fixed, initial amount you must pay out-of-pocket for your medical expenses each policy year before your insurer starts paying.
How it works: If your Integrated Shield Plan (IP) has a deductible of $3,500, you have to pay the first $3,500 of your hospital bills in that policy year. Once you hit that amount, the insurance starts covering the subsequent eligible costs for the rest of the year.
The silver lining: You only need to pay this once per policy year. If you have multiple hospital admissions in the same year, you won’t have to pay the deductible again once it’s met!
In Singapore, deductibles generally range from $500 to $4,500, depending on your age and the ward class you choose (e.g., Ward C vs. a Private Hospital).
Source: CPF
2) What Is Co-insurance
Even after you’ve paid your “entry ticket” (the deductible), you aren’t completely off the hook. This is where co-insurance comes in.
Co-insurance is essentially splitting the remaining bill with your insurer. It is a fixed percentage of the claimable amount that you must co-pay after the deductible has been met.
How it works: For most Integrated Shield Plans in Singapore, the co-insurance is usually set at 10%. This means you pay 10% of the remaining bill, and your insurer covers the other 90%.
Under standard MediShield Life, the co-insurance rate actually drops (from 10% down to 3%) as the bill gets larger.
Source: CPF
3) How Deductible & Co-Insurance Are Calculated
Let’s walk through a quick example. Imagine you have an Integrated Shield Plan and you undergo a surgery at a private hospital.
Your total bill comes to $30,000. Your plan has a $3,500 deductible and a 10% co-insurance.
Here is how your bill is split:
The Deductible:
- You pay the first $3,500.
- Remaining bill: $30,000 – $3,500 = $26,500.
The Co-insurance: You pay 10% of the remaining $26,500.
- You pay: $2,650.
- Your insurer’s pay: 90% of $26,500 = $23,850.
Overall Payment
- In total, you pay: $6,150 ($3,500 deductible + $2,650 co-insurance)
- Your insurer pays: $23,850
4) Can I Lower The Costs Of Deductibles And Co-insurance?
Paying thousands of dollars out-of-pocket can still be a heavy burden. Fortunately, Singapore has systems in place to help you manage this:
a) MediSave
You don’t necessarily have to pay your deductible and co-insurance in cash. You can tap into your CPF MediSave account to pay for these out-of-pocket expenses, up to the prevailing withdrawal limits.
b) Riders
If you hold an Integrated Shield Plan (IP) with a rider, keep in mind that the landscape has shifted as of 1 April 2026 with new regulations from the Ministry Of Health (MOH).
- Riders can no longer cover the full deductible as insurers are no longer permitted to sell riders that cover the minimum IP deductibles set by MOH.
- Riders still protect you from paying massive, uncapped co-insurance amounts. With riders, there is a cap on how much co-payment you need to pay.
However, the maximum amount you’ll need to pay out of pocket hasincreased from $3,000 to $6,000 per policy year.
Quick Tip: Because you are now responsible for the mandatory deductible and up to $6,000 in annual co-payments, it is a smart financial strategy to keep an “emergency health fund” in a high-yield savings account or a liquid money market fund.
Treating your maximum potential out-of-pocket (the sum of your deductible and the $6,000 cap) as a dedicated sinking fund can provide immense peace of mind.
c) Company Insurance
d) Health Insurance Plans With No Deductibles
While there is no standard local health insurance with no deductible, there are zero-deductible options available that you can consider. Read our guide on insurance plans with zero deductible to learn more.
5) A Final Note
The Silver Lining: Because policyholders are now taking on a larger share of the initial bill, insurers have adjusted premiums, and many riders are now more affordably priced.
On average, the premiums for the new 2026 riders are roughly 30% cheaper than the older, maximum-coverage riders. It’s a great time to review your current plan with your insurer to ensure you are getting the right balance of coverage and premium costs.
