Is CPF really that bad? (Part 3 – Healthcare)

What does Medisave do?

“Medisave is a national savings scheme which helps CPF members save for future medical expenses, especially after retirement.” – CPF.GOV.SG

What can you do with your Medisave account?

Use it at all public healthcare institutions, and approved private hospital and medical institution – Click here if you want to know which specific one

Benefits of Medisave?

  1. Use it for yourselves (of course) and for you family members
  2. For all medical issues
    • “The Medisave Withdrawal Limits are generally enough to pay for the charges incurred by a patient staying in a Class B2/C ward in a restructured hospital. If you decide to stay in a higher class ward or a private hospital, you may have to pay part of the bill in cash. It is therefore important to choose a ward or medical institution that you can afford. For a rough estimate on the medical charges, you can check the hospital bill sizes by medical condition / procedure at the Ministry of Health (MOH) website. If you know your estimated medical charges, you may use our Medisave/MediShield Life Calculator to estimate how much you can claim.” –

Cons about Medisave?

  1. There are limits on medical issues
    • For example; outpatient scan of $600 per year for cancer treatment
    • How to go about it?
      • use your family’s member
  2. There’s a cap amount of $52,000 called basic healthcare sum (BHS)

Still think Medisave is not enough for your future healthcare needs?

Medishield Life was created in 2015 to replace Medishield. ” It is a basic health insurance plan, administered by the Central Provident Fund (CPF) Board, which helps to pay for large hospital bills and selected costly outpatient treatments, such as dialysis and chemotherapy for cancer. ” – CPF

Do you have to apply for it?

No! it is a replacement of the old Medishield plan that everyone has.

Why should you max out your MA account?

Similar to your SA, it gives the same interest rate and any amount above the BHS will go into you your other CPF A/C. Additionally, the amount for BHS rose by 4.4% within a year, which means you require a higher amount of $$ in your MA when you’re older. Remember compounding now and at a larger number beats “most of the future” compounding.


All in all, the money in your medisave account acts like a full basic healthcare insurance plan which can be used mainly everywhere in Singapore. If you need better care, an insurance plan is needed to cater to that need. 

The question to you is whether it is suffice? How knowing this can plan your insurance needs?




6 thoughts on “Is CPF really that bad? (Part 3 – Healthcare)

  1. By itself, medisave is NOT adequate for *proper* healthcare in elderly years. Many retirees use up their medisave in their 70s and if no willing family support, govt forced to come in with Medifund, sponsoring both penniless retirees and hospitals. This has increased drastically over the last 20 years. Hence govt forced to come out with *compulsory* Medishield Life that covers pre-existing and also congenital problems. Risk pooling and force everyone to contribute in order to manage healthcare costs for govt. This is why govt was so ADAMANT that S’poreans living overseas even for past 30-40 years STILL must pay premiums. System of risk pooling breaks down when there are loopholes for people to opt out.

    Now combined Medisave & Medishield Life — it’s adequate for a very basic healthcare service.

    However if govt is unable to rein in medical costs, premiums for Shield plans will just keep shooting up in line with healthcare inflation. Increase in Shield premiums easily 8%-10% per annum for past 10 years.

    Currently for public healthcare, govt is very good at controlling manpower costs. But it’s not very good at controlling newer drugs costs as well as newer medical devices costs. More & more high-tech medical are in the hands of oligarchy medical companies, while Singapore is too small a market for even govt to negotiate from position of strength. Singapore will need to join other nearby developed nations such as OZ, NZ, South Korea, Japan, etc to form a consortium for stronger bargaining power.

    Another big problem is over consumption in private hospital sector. Everybody knows to simply charge all costs / experimental drugs & procedures to “As-Charged” Shield plans. This will simply lead to moral hazard among doctors & patients, and result in profiteering mindset for healthcare professionals as well as medical companies & hospitals.


    • Sinkie! You’re right on everything… damn!

      The drug cost is probably the hardest to control especially when there are more and more subsidies for mnc (who manufacture them).

      You can never stop capitalism/free market…. then again… how would you solve this? With big “moral” society clubs (e.g. National cancer society/ national diabetes) being sponsored by big carcinogenic manufacturers.


      • No easy answers.

        Even forming a consortium with other countries not simple …. different emphasis, different demographics, politics etc. For example while SG may be more concern with diabetes & cancers, another country may be more interested in cardio vascular problems like heart attacks & strokes.

        Even for cancers, maybe SG more interested in colorectal while other country like Oz will be more interested in skin cancers and maybe lung.

        And then you have the oligarchy medical MNCs. Who’s to stop them from forming their own consortium and refusing to deal with purchasing consortium, unless on individual country basis? Divide & conquer. Each country / region will pay more for the drugs / equipment that affect their own populations more.

        It’s going to take political leadership similar to the Old Guards, or America’s Founding Fathers, or UK’s in the early-19th century. Unfortunately I don’t see it for the next 2-3 generations.

        As individuals, if we can’t beat them …. Join them!!!

        If not already vested, then earmark a portion of your war chest for healthcare ETFs/funds/REITs. During the next market downturn, start to allocate some of that war chest. I normally recommend wait until the next big -30% or -40% stock market drop. Better to just keep saving cash & have huge war chest.

        If bought at market lows, certain themes can simply buy & hold for decades, with dividends per share growing over the years.

        E.g. I have baskets of ETFs & UTs that invest in the 3 areas of consumer staples, healthcare, and warfare (more nicely called aerospace & defense). They all cater to human base instincts — both good & bad.


  2. To much to read..understood a little. How does it effect senior citizen/retiree or unemployed with no cash..Why is it that only in patient ? Or is it a “bigger collection “for in patient for CPF??? Why seek Social worker when theres enough medisave to cover patient cost including registration and medications…Why rules r such..why is it too rigid..,?


    • Hey hanafiah! Thanks for the feedback! Will improve on simplifying the information!

      It’s okay if you do not have cashed, the underlying intention of CPF is to provide for each and every individual when they retire.

      Back to your first question : how does it affect those unemployed/SC/retired?

      Assuming at you’re in your 50/60’s you would have a decent amount in your medisave. It’s similar to your SA (or RA) can’t be touched unless u have been visiting the hospital really a lot.

      Question 2 : bigger collection for in patient for CPF?

      From what I understand, in patient is for people who stays in the ward. Depending on the severity of your issue you might need to pay more for the better “service”.

      Qn 3 : why seek social worker when there’s enough?

      It varies among individuals, some might tend to spend a lot more in their early years and cannot compensate for “it” with their salary. The second scenario would be individuals who have never been working since young, hence very little money in their medisave account. Third scenario, individual might have a longer live expectancy. The last scenario would be bad financial planning on what is required to “live a free life”.

      Qn 4: why rules r such?
      I guess we can always put the blame on the game maker or we can put our focus on winning the game.

      What do you mean by rigid?


  3. Pingback: CPF – Aged 54 & below |

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