The Online Citizen

MediShield Life: Premium increase to range between 111% to 189% for the “young”

MediShield Life: Premium increase to range between 111% to 189% for the “young”
June 28
10:28 2014

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.


medishield life premiums
(Image from Channel News Asia)

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?

P.S. Come to the Return Our CPF – MediShield Life protest on 12 July, 4 to 6 pm at Speakers’ Corner

  • GUSSIE91

    oh my…………..I will pass 90 next year, retire, no more income, no one wants to employ me, how to pay the premium?

    • liangjwc1

      No govt officer approach you to ask if you have any asset yet?

      • GUSSIE91

        No need for govt officer to approach me, because my only asset is Singaporeans land those have been taken over by HDB/URA w/o any compensation………… and they are selling to us under 99 years leased hold.

        • liangjwc1

          I just realised I have to pay double in premiums for Medishield Life and for the lower ward classes compared to now.
          Although they claim more subsidies to be given out, but for how long?
          Besides, you never know how they marked up bills before subsidy.
          After that good luck to you.

          • GUSSIE91

            yup……………..the govt will give you $1 and taken back later $10.
            The ordinary average Singaporeans are always the loser, the govt is the winner.

  • PikuChoo

    Having “subsidy” sounds good. Having “someone else” pay for you certainly sounds good. But just WHO is that “someone”? If it is the taxpayer, then it is still YOU.

    Just who is collecting all these premiums? Private insurance companies who get to pocket the balance net of claims as profit? And since premiums are not guaranteed, ie: fixed, they get to raise premiums anytime their profit margin (actuarially determined) comes under pressure from rising cost?

    Why not we all instead pay our premiums into a sinking type fund where the balance net of claims are still ours (instead of someone else’s profit) and can be used to offset the next year’s premiums?

    • liangjwc1

      Collecting premiums is very similar to motor insurance scheme. Not enough profits or too high claims/costs just need to increase premiums.

      • PikuChoo

        And just like motorists, we will be similarly screwed!

  • Alan

    I have this hunch that the government is trying to skim us with all this pretentious sugar coated policies to make us poorer and drive us away from our beloved country.

    Let look for greener pasture before they skin us bare!

    Holland, Norway, Sweden or even Batam or Thailand as per suggested by Nelson in other post.

    You all will definitely be better off than under the Pap government, whom you always deem that they aim to fatten their coffer than caring for the citizen.

    • liangjwc1

      Why hunch? You never read the MediShield Life proposal? Every policy is tok kong and you worship it?

  • liangjwc1

    What is not disclosed is the estimated total premiums to be collected under MediShield Life and the expected pay out in percentage term.
    Not available or they expect to keep the review for this as secret?

    • PikuChoo

      I guess that is the “actuarial study” mentioned in the article. More importantly, we need to have the same info released on the current Medishield scheme.

      This will provide the baseline figures from which to compare the profit being creamed off when Medishield Life goes into force. Without this transparency, the “itch” to profit off Singaporean’s healthcare needs will prove very tempting for the companies involved.

      More importantly, Health minister Mr Gan Kim Yong need to tell us WHY such information has NOT being made public yet.

      • liangjwc1

        Because most Singaporeans are daft so they think no need to release the “actuarial study” or whatever.
        Besides, Gan already inform that the inflation and cost increases for the next five years are factored into the premiums now, so everyone just pay.
        And we have the sh*t time saying the increase in premium is lower than feared?
        What was their original premium figure they feared?
        Isn’t this empty talk?

  • The_Pariah

    Given that Medishield LIFE incorporates
    (A) front-loading for those below Age 40 and (B) risk-loading for those with pre-existing illnesses, “daft” little me seriously cannot reconcile why those of Age 50-64 (ie, outside of Pioneer Gen Package) who were whacked with 30-50% hike in 2013 under Medishield Integrated Plan of NTUC Income Class B1 Plan
    now face another whack in 2015 of 60-80% for Medishield
    LIFE portion PLUS a yet-to-be-announced xx% change for IP portion (some
    measure of cold comfort from IP Sub-Committee on the latter).

    Even if we assess just the Medishield bottom layer (ie, without the IP top layer) …. Those of Age 50-64 were
    already hit with 60-70% premium hike in 2013 and they face another
    70-80% jump in 2015 (without subsidies).

    One should NOT be enamoured by
    permanent/transitional subsidies – Put it to my public mistrust (remember how HDB Lift Upgrading
    Program was pegged to GE votes for PAP) if the PAP could dangle the possibility that permanent subsidies could be withdrawn by non-PAP Govt. In any case, such subsidies ultimately trace back to taxpayers’ money (GST in future – 10%, 15%?).

    Maybe Medishield LIFE is a flawed structure. When a mere Ward Class B2/C LIFE is already costing an arm and a leg, it may make more sense (economically or cow-wise) to have a Medishield 2ND – ie, equivalent to Critical Illness Rider (exempt for those who can produce evidence of existing riders).


    could replace the current Deductibles/Co-insurance rider which is a
    political faux pas because requiring Rider premiums to be paid by cash
    merely translates into exempting the well-to-do (the likes of ex-Health Minister Khaw Boon Wan who bought this Rider) from policy deterrents
    of paying
    Deductibles/Co-insurance to preempt the Buffet Syndrome, esp if they are
    already Ugly Singaporeans. This is the elephant in the room.

  • vanguy79

    Premiums for the “young” should be expected to go up. The age group is technically less riskier and they need to pay for the older age groups or the groups with medical illnesses.. in order for the system to be working. What i object is that the Minister of Health saying this is Universal Health Care. That is simply not true. This revised MediShield Life health care system still requires us to pay out of pocket for some treatments. We also have yet to hear if this MediShield life really covers people even with Cancer or with HIV. In almost all news article i read, I have not come across that detail.