This article was originally published on Rice Media.

For every Singaporean young adult, the most exciting coming-of-age moment is your first pay cheque.

However, entering adulthood brings forth another ritual: the slow, painful realisation of how much goes into everything else before you can spend it on yourself.

After the CPF deduction, student loan payments, a portion for your parents, and maybe, maybe, a small treat in the form of a fancy meal, there’s not much left. Forget about disposable income: trying to save money is difficult enough.

Which is probably why we have a visceral reaction when, say, insurance agents come sliding into our DMs. They may have our best interests in mind, but the idea of parting with even more money feels illogical, almost cruel.

Young adults, especially fresh graduates stepping out into the working world, largely lean into two camps: the ones without any health insurance, and the ones who make a beeline for it.

I thought pitting both parties together might result in a clash of the titans, just to illustrate this disparity in a friendly conversation. But the little tete-a-tete I arranged between Cheryl and Joan–one with, and one without, health insurance, respectively–revealed there’s only a very fine line separating the two parties.

Is Health Insurance Too Expensive?

To start, I pose this question: Health insurance is just way too expensive to afford, especially for a fresh graduate. Agree or disagree?

Joan disagrees, to my surprise. The 23-year-old doesn’t have health insurance–she’s hesitant about spending large sums of money. Yet, she and Cheryl share the same stance: health insurance can be affordable.

Just looking at the numbers alone, they agree that the amount isn't a lot, even on a fresh graduate's pay. Cheryl also shares the importance of finding a reliable insurance agent who’d take into account an individual’s budget and offer a health insurance plan that works for them, with no need for extra bells and whistles.

“An annual premium costs between $2,000 to $3,000, and when you divide it by 12 months that's like $250 a month max." Cheryl shares, "That's an amount I can afford if I don't spend on indulging in things like going out for drinks.”

Image: Stephanie Lee / RICE file photo

The caveat here is that an individual doesn't have any other large ticket sums to pay for. Cheryl cringes a bit before recounting her fresh grad days – back when a third of her take-home pay was spent servicing her student loans, and another portion was given to her parents. Now, 27, she's glad she has one less financial burden to worry about.

Joan isn't as lucky. She calls her take-home salary modest at best. With essential medical expenses to finance every month, she finds that it's a choice between paying for food or insurance. The answer is obvious.

“I'd like to have health insurance, but it's not something I can fit into my current budget.”

As it is, she's meticulous and frugal with her spending habits. She packs food from home, opts to meet her friends for socials only after they've had their meals, and engages in hobbies that don't require additional costs. Whatever she's able to cut back on, she's already done so.

It’s a tricky line to balance – health insurance is, in true definitions of the word, affordable. Whether an individual has the means to afford it, it’s wholly dependent on their personal circumstances.

What If You... Just Don’t Fall Sick?

It’s easier and cheaper to just not fall sick. Agree or disagree?

I’ll admit, I deserve the look of incredulity both Joan and Cheryl direct at me.

“Can you even control that?” Cheryl laughs.

Joan’s predicament – not being able to afford insurance – is partly due to the fact that she requires spending on medical expenses for long-standing mental health issues. Joan doesn’t consider herself a “sick” person, but paying for medication goes a long way for her health.

Joan and Cheryl believe in staying healthy, just like their parents. For Cheryl, it’s a tough standard set by her folks: every day, they wake up at 6am to exercise in the gym, all before preparing their meals for the day. After work, it’s back to the gym for another hour-long workout. “I don’t do that,” Cheryl says, sheepishly. “They believe, by doing that, you won’t fall sick. But that’s not true!”

Image: Zachary Tang / RICE file photo

Both admit to being careful with their diets. Cheryl exercises when she can, while Joan’s physical abilities have been limited since junior college. Back in those days, she spent most of her time in a wheelchair while dealing with an unexpected case of early-onset arthritis. Despite living the, quote-unquote, “healthy lifestyle”, both have been accident- and injury-prone. After all, you can’t count on incidents like these never happening.

Cheryl recounts the sting of regret that struck her family when her brother got into an accident. The amount that MediShield Life covered his total bill was so low, that they thought they had filed their claims wrongly, she remembers.

It doesn’t help that the cost of seeking medical treatment is skyrocketing, as with most things in general (thank you, inflation). Medical treatment is already expensive now, let alone in the future, as recent surveys show medical inflation is expected to hit 10% in 2024. According to the Singapore Cancer Registry 50th Anniversary Monograph, cancer treatments are now estimated to be between $8,000 to $17,000 per month. Employees might be lucky enough to be able to claim from their company, but should they be in-between jobs or decide to freelance, they’re on their own.

That realization morphed into a recurrent, gnawing fear for Cheryl. The very thought of her requiring medical treatment would instantly put her family in a dire financial spot, especially while they were also paying for her brother’s university tuition. Not only would a single incident set her back in terms of medical bills, but she’d also lose income from forced time away from work.

I relate to that fear, and I suspect most of you would too.

Image: Stephanie Lee / RICE file photo

Joan does. Being able to have health insurance would do wonders to help alleviate her anxiety. Cheryl also mentions having health insurance is a safety net, and that she knows of people who compromise on their health because they couldn’t afford it.

In a way, then, getting health insurance can be a form of taking care of our health too..

Whenever, Wherever?

I can always buy health insurance when I’m older. Agree or disagree?

To that, Joan winces. Despite her young age, it’s already “too late” for her to get the kind of starter pack health insurance most people her age would have. Cheryl listens intently.

Joan’s arthritis, along with her current mental health evaluation, are both conditions that play a part whenever she decides to buy insurance: exclusionary clauses and extra premiums will be unavoidable. She found out when an insurance agent, a friend of her parents, sat down with her to discuss possible plans. “She said it all really nicely,” Joan says, recalling the inevitable disappointment she felt during that meeting.

The unfortunate truth is this: if she had health insurance before both happened to her, she would be covered. Pre-existing conditions are a constant hurdle in insurance – the risk of exclusions also increases as one gets older and more susceptible to illnesses and accidents.

Cheryl’s husband, who had a job in nightlife, faced liver issues – part of the hazards that come with being surrounded by alcohol on a daily basis. “He had to drink a lot,” she emphasizes. Thankfully, her husband had already an insurance plan in place, with his treatment fully covered by it.

That being said, both Cheryl and Joan know the value of being intentional – the fact that everyone has their own time and pace. Cheryl knows the fear Joan carries by being uninsured. With Joan’s mental health diagnosis, stress is a recurring symptom. Cheryl notes the irony: “But part of your stress already comes from medical bills!”

Image: Stephanie Lee / RICE file photo

Joan laughs, mainly in relief that someone else understands. “My bank account being zero is quite normal for me,” she states. Even with a full-time job, her medical expenses cover a significant portion of her take-home pay.

They both acknowledge that wanting to spend only when they feel financially stable is perfectly valid. It’s also emotionally healthier this way. For Joan, she’s conscious about saving any money she can, but she feels that shouldn’t come at the expense of depriving herself of joy.

Finding emotional fulfilment in our lives will always be a key component of our mental health. In her life, it isn’t expensive – she spends time with community cats, devouring books from the library, and has a circle of friends who don’t insist on pricey gatherings. She notes: “I’m just lucky that I can find joy in cheap things.”

Joan laughs, mainly in relief that someone else understands. “My bank account being zero is quite normal for me,” she states. Even with a full-time job, her medical expenses cover a significant portion of her take-home pay.

Joan laughs, mainly in relief that someone else understands. “My bank account being zero is quite normal for me,” she states. Even with a full-time job, her medical expenses cover a significant portion of her take-home pay.

Health Insurance: An Eventuality?

Decisions revolving around personal finances are never easy.

It’s especially true when it’s our first brush with money – which we finally and rightfully consider our money to spend. The only thing we can do is arm ourselves with knowledge and make the decisions we believe feel best for us.

There are many different options from different insurance companies available, and the good news is that there’s truly a tailored plan for everyone. McDonald's toys might be limited in stock, but health insurance never will be. With the everlasting tug and war between needs and wants within us all, you get the chance to change its inertia.

But I’ll leave Cheryl to end things off more eloquently: “I do think that there will always be a lot of persons that are greater or lesser than yourself. So take it at your own pace, though.”

“There’s no need to compare what works for your life. You just need to know what's important to you.”

Complement your MediShield Life with PRUShield (for Singaporeans and Permanent Residents) for better insurance coverage and healthcare experience, with affordable plans tailored for different budgets.

Have an existing health insurance plan that doesn’t fit your needs? Make the switch to PRUShield today with PRUShield EasySwitch, where you can enjoy simplified sign-up and continued coverage for a seamless and worry-free transition. Terms and conditions apply.

The information in this article does not necessarily reflect the views of Prudential. Prudential does not represent that such information is accurate or complete and should not be relied upon as such.

This article is for your information only and does not consider your specific investment objectives, financial situation or needs. We recommend that you seek advice from a Prudential Financial Consultant before making a commitment to purchase a policy.

This policy is protected under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC). Coverage for your policy is automatic and no further action is required from you.

For more information on the types of benefits that are covered under the scheme as well as the limits of coverage, where applicable, please contact your insurer or visit the GIA/LIA or SDIC web-sites (www.gia.org.sg or www.lia.org.sg or www.sdic.org.sg).

Information is correct as of 10 January 2024.