By Leong Sze Hian
In reference to the latest Government-initiated package for the Pioneer Generation, a local news report had stated that “the premiums for MediShield Life will be lower than that of MediShield for the pioneer generation, and the sums are being worked out”.
On Sunday, Prime Minister Lee Hsien Loong announced the Pioneer Generation Package which is said to provide the seniors with more subsidies at polyclinics, GP and Specialist Outpatient clinics, additional Medisave top ups and help with premiums for the new national insurance scheme, MediShield Life.
The package will benefit about 450,000 people, who are 65 years old or older by the end of this year, and who became citizens before 1987.
Before we celebrate the launch of the package, there is a fundamental question as to who pays for the lower premiums. One of the main issues regarding the Medishield Life Scheme is that it will be entirely funded by the premiums collected from the policyholders. With this being unchanged, the issue continues to be apparent as the role of the younger generation (aged 65 and under) remains unclear – will they be footing the bill for the lower premiums that those aged 65 and above will pay in the future?
It was also stated (in the same article) that “for outpatient treatment, they will enjoy extra subsidies at polyclinics, specialist outpatient clinics and general practitioners (GPs) under the Community Health Assist Scheme”.
There is no clear indication for the Government to contribute funds to the healthcare sector in terms of a cashflow perspective. In this case, total Medisave contributions and annual interest in a year may continue to be more than the total outflows in the healthcare sector. These outflows include government healthcare operating and development expenditure, Medisave top-ups, Medisave withdrawals for direct medical expenses, withdrawals to pay MediShield Life premiums, Medifund annual grants to needy patients, etc.
There is no mention of using the $60 billion in the Medisave accounts despite the funds being available for use.
Additionally, it is said that there will be “annual top-ups to their Medisave accounts, which can help pay for MediShield Life premiums”. With the recent rise in medical costs, there might be an issue where the top-ups simply cannot help cover the increase in cost. Therefore, this might leave insufficient or no funds in the medisave account to pay for the MediShield premiums persist. This is unless the Medisave top-ups are specifically designated to be used to pay for MediShield Life premiums only.
There is also a question as to the Medisave contribution rates – will it continue to increase (like it has been hinted repeatedly) or will it stay the same?
450,000 or 349,000 will benefit from pioneer generation package?
Someone asked if there was any way to check how the numerical value of 450,000 people eligible for the package was derived.
According to the Department of Statistics (DOS) – the number of residents (Singaporeans and PRs) aged 65 and over was 404,400 in 2013. However, since the package only affects Singaporeans, the real value should logically be less than 404,400. My personal guess is that since the latest population statistics are based on mid-year estimates, perhaps the 450,000 is based on the latest “unpublished” statistics as of say December 2013.
In this regard, assuming that there was an increase of 3.4% from mid 2013 to end 2013, the year-on-year growth rate was 6.8% for this group.
What we can derive from this conclusion is only 418,150 residents or an estimated 360,445 Singaporeans. It can be said that even if every single resident in this group are Singaporeans and none of them became citizens after 1986, the number may still be quite far off from “450,000″.
(Image from Straits Times)