By S Y Lee and Leong Sze Hian / Image of the Medishield review committee by Channel News Asia
We refer to the article “MediShield Life review: Premium increase much lower than feared” (Straits Times, Jun 27).
Increase in premiums mostly absorbed by subsidies and top-ups?
The ST article writes that based on the report released by the MediShield Life Review Committee, the increase in premiums which people will have to pay for the better benefits under MediShield Life will not be more than $355 a year, with most of it absorbed by various government subsidies and top-ups.
However it is alarming to note that the increase in premiums from 2019 compared to the current premiums, after the declining transitional subsidies, range from 111% (from $9 to $19 monthly for the lower-income with household per capita income less than $1,100) to 189% (from $9 to $26 for the high income) for age 31 – 40.
For example, if you are aged 51 – 60, the increase range that you will see in your premium will be from 28% to 83% depending on your income level - $29 to $37 for the lower-income and $29 to $53 for the high income.
So, how can an increase of up to 111% for the lower-income, and up to 189% for the higher income, be arguably called a “premium increase much lower than feared”?
Premiums start to increase from end-2016?
In respect of the announcement that citizens will receive a subsidy of 80% of the premium in the first year of MediShield Life in end-2015, followed by subsidies of 60, 40 and 20 per cent in each subsequent year, does it mean that the gradual increase in premiums will actually start from the second year (end-2016) – which may be even worse than what the tables indicate for the increased premiums from 2019 only?
1.65m inactive CPF members have enough Medisave to pay?
The committee added that all premiums are expected to remain within Medisave contributions and inflows and there will be no additional cash outlay required.
Though the committee said that no additional cash outlay is required by those insured under the new MediShield Life scheme but since there are 1.65 million inactive CPF members out of the total 3.53 million CPF members – how many may not have sufficient money in their Medisave accounts to pay for their MediShield Life premiums? And how many Singaporeans will have to pay cash because they do not have sufficient Medisave funds in their account?
With regards to the Government providing almost S$4 billion in subsidies and financial support over the next five years – does it mean that the average subsidy per year is about $800 million?
Govt still not spending any money on healthcare?
As written in TOC's healthcare focus early this year. For Medisave, in 2012, there was a total balance of $60 billion but the amount withdrawn for direct medical expenses was only $768 million – this effectively makes up only 1.3% of the total balance.
For MediShield, Parliament had also revealed that the MediShield surplus is $850 million for the last 10 years. In 2011, only $282 million MediShield claims were made. This means that only 24.9% of the known MediShield reserves had been claimed.
Finally, for Medifund, in 2012, the capital sum is $3 billion. Of this, only $98.2 million was disbursed in 2012. This represents only 3.3% of the capital.
If so, does it mean that from a cashflow perspective – the Government may still not be spending any money on healthcare, as the total annual contributions to Medisave and the annual interest on the total Medisave balances, may continue to exceed Government healthcare expenditure and all withdrawals from Medisave by way of direct medical expenses, MediShield, Private Integrated Plans and ElderShield premiums, etc? (read more)
MediShield Life projections and surpluses?
Finally, can the actuarial study on MediShield Life be made public, so that we can see whether future projections of premiums to claims will continue to give yearly surpluses since the MediShield scheme started, to the tune of an estimated more than $1 billion to-date?
Without the actuarial study on the MediShield Life , we cannot tell whether or not the new scheme will continue to work on the basis that total premiums collected by the government exceeds the total claims by the insured annually as in the past. From what has been gathered so far, does it imply that fundamentally nothing has changed for our national medical healthcare scheme?