Managing healthcare costs: What to know about insurance riders

Between work, family and daily responsibilities, getting sick or injured can be disruptive to both our personal and professional lives. Healthcare costs are also a common concern and, in many cases, may stop people from getting the treatment they need. A 2025 Economist Impact report commissioned by Prudential found that eight in 10 people in Singapore had delayed seeking medical care in the past year. Some prioritised work, while others did not want to burden their families financially or as caregivers. Around six in 10 respondents also worried if they could afford care, while about half said their medical bills were higher than expected – adding to the stress at a time when the focus should be on recovery. Purchasing private health insurance on top of the national MediShield Life scheme through Integrated Shield Plans (IPs) can help reduce cost anxiety, especially for those seeking treatment in higher-class wards or private hospitals. About 71 per cent of Singapore residents, or 3 million people, have IPs. Of these, 67 per cent have added IP riders to supplement their main plan and further reduce out-of-pocket expenses. However, broader coverage typically comes with higher premiums, and the sizeable take-up rate of IP riders has coincided with overuse of medical services and rising healthcare costs. As Singapore’s population ages and new medical advances emerge, it is crucial to address this issue. Recent changes to IP riders aim to balance protection with long-term affordability, helping to keep private healthcare coverage sustainable and accessible. THE DIFFERENCE AN IP RIDER MAKES While IPs help cover large hospital bills, policyholders are still responsible for part of the cost. There are also annual claim limits, while certain treatments – such as those outside the Ministry of Health (MOH)’s Cancer Drug List – may not be covered. The sum borne by policyholders consists of three components. The first is the deductible, a fixed amount that must be paid before insurance coverage applies. The second is co-insurance, a percentage of the remaining bill after the deductible has been met. The third is any amount not eligible for coverage under IPs, which policyholders must also pay out of pocket. This is where IP riders can help. While coverage differs across insurers, the basic principle is the same. Policyholders with IP riders are required to co-pay at least 5 per cent of the total bill, excluding the deductible. Riders also typically include a stop-loss feature, which caps the amount policyholders must pay in co-insurance, subject to policy terms and conditions. Once that limit is reached, the insurer covers the remainder. The result is lower out-of-pocket costs than under an IP without a rider. For example, Janet* was admitted to a private hospital under Prudential’s list of panel providers after contracting a viral infection and incurred a bill of S$150,000. She has a PruShield Premier IP but no IP rider, so she must pay the deductible and full co-insurance herself. After the deductible of S$3,500 is applied, 10 per cent of the remaining S$146,500 is subject to co-insurance, which works out to S$14,650. That brings her total out-of-pocket expense to S$18,150, while MediShield Life and her IP cover the remaining S$131,850. Now, suppose Janet purchased a PruExtra Premier Care IP rider. How would that change her out-of-pocket costs? MORE SUSTAINABLE HEALTHCARE COVERAGE On Apr 1, insurers in Singapore launched new IP riders in line with the updated MOH requirements. The revised policy structure introduces several key changes, while retaining the minimum 5 per cent co-payment requirement. Under the new rules, IP riders can no longer provide coverage for the minimum IP deductible, and the annual co-payment cap has doubled to S$6,000. That means policyholders may now pay more out of pocket when making a claim. At the same time, rider premiums – payable in cash only – are on average 35 per cent to 40 per cent lower than before. For example, Prudential has launched three new IP riders to replace its previous suite of riders. The three new options are at least 30 per cent cheaper across all age groups and plan types, with some groups seeing a 55 per cent difference. These government-mandated changes, according to MOH, are intended to encourage more prudent use of healthcare services and help curb the rise in healthcare costs and insurance premiums. As patients become more mindful of their healthcare spending and as doctors exercise greater discretion in prescribing tests and treatments, it is believed insurance claims and payouts may moderate, helping to improve the overall sustainability of private health insurance and healthcare costs. Whether to buy an IP rider depends on individual healthcare needs, financial priorities and comfort with out-of-pocket expenses. Those with higher healthcare needs may value the additional protection and some certainty in managing out-of-pocket costs that IP riders provide. Others may be in good health but nonetheless prefer the added reassurance of broader IP rider coverage for greater peace of mind. Now that IP riders are more affordable, budget-conscious individuals who may previously have hesitated can also consider purchasing this extra layer of protection. Speaking to a financial representative can help consumers better understand the options available and choose a plan that suits their respective needs and budget. *Janet is a fictional character used for illustrative purposes, based on an example in Prudential Singapore’s PruShield product brochure. Terms and conditions apply. Information is accurate as of Jul 10, 2026. This advertisement has not been reviewed by the Monetary Authority of Singapore.