One inevitable consequence of Singapore's high healthcare standards is that hospital bills tend to be expensive. A large portion of healthcare costs is absorbed by way of government subsidies, while other mechanisms such as Medisave help ensure the general public's ability to pay their share of healthcare costs.

Despite this, there is a mind-boggling array of health insurance plans available on the market. Are they necessary, and how do such plans factor into your overall healthcare portfolio?

To make sense of it all, it helps to sort healthcare plans into three categories:

• Government-mandated healthcare: Subsidies, Medishield Life, Careshield Life
• Optional additional healthcare coverage: Medishield Integrated Plan (IP), Enhanced Careshield Life
• Private insurer standalone plans: Cancer plans, critical illness plans, disability plans, etc

Government-mandated healthcare

Subsidies

Public healthcare in Singapore (i.e., public hospitals and polyclinics) is heavily subsidised by the Government, and patients need only pay a portion of the final bill.

Subsidies are not applied equally across the board; instead, a targeted approach is used, with the largest subsidies reserved for those on the lowest rungs of the economic ladder.

Besides cheaper hospital bills, other subsidised healthcare schemes include Community Health Assist Scheme (CHAS) which partially offset charges at participating clinics, and Enhanced Screen for Life, which offers subsidised screening for heart conditions and certain cancers.

Medishield Life

Medishield Life is a national healthcare insurance scheme that is designed to help Singaporeans pay for their healthcare costs without undue financial stress. It offers a basic level of healthcare coverage that further reduces the portion of healthcare costs a patient has to pay. Premiums for Medishield Life are paid from your Medisave account.

At this point, you may be wondering what's the difference between Medisave and Medishield. Well, Medisave is one of your three CPF accounts that is used specifically for healthcare needs. A portion of your CPF contributions is a...