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CPF protest: questions on transparency and Medishield premium excess

CPF protest July

By Terry Xu

More than a thousand individual turned up at Hong Lim Park to attend the second Central Provident Funds (CPF) protest held this year. This time, the focus of protest was on Medishield Life, a much touted medical healthcare plan by the Singapore government, introduced to improve the existing healthcare scheme, Medishield.

A total of eight speakers took to the stage, speaking not just on CPF issues but also issues pertaining to local governance and the ruling People’s Action Party.

Presidential Election 2011 candidate and former NTUC chief executive officer Mr Tan Kin Lian noted in his speech that Singapore should learn from other countries which have better medical healthcare schemes where the government pays more compared to what their citizens pay. He pointed out that in these countries, the governments pay about 60-70% for medical costs while citizens pay about 30%. In Singapore, the situation is the direct opposite.

Financial adviser Leong Sze Hian said that in the last 5 years, the excess of premiums to claims made against Medishield, was S$2.3 billion. He also asked about the excess of premiums to claims for the prior 19 years since the Medishield scheme started in 1990s.

"Every year the premiums exceed the claims, what about the interest? The money don't sit there. What about the excess of the premiums to the claims? We have no transparency. "

Singapore Democratic Party Treasurer, Ms Chong Wai Fung, noted that for the past 11 years, Medishield has an average medical loss ratio of 63%. For 2013, the medical loss ratio reached a historical low of 43%, which means that for every $100 collected through Medishield, the scheme only paid out $43. The rest is paid out of pocket by citizens.

By comparison, the US, which she said is the most capitalist of countries, private health insurance schemes are not allowed to have a medical loss ratio of less than 80%, meaning the companies offering such schemes cannot have profit of more than 20%.

Ms Chong said, "The Government must stop making profit off the back of Singaporeans when they fall ill. It must assume its responsibility in line with what other First World governments are doing. There is no need to raise taxes to 50%, or raid the reserves, as suggested by the government."

Secretary-General of Reform Party, Mr Kenneth Jeyaretnam spoke about the premiums collected by the government. "The government is not accounting for the investment income that it earns from the premiums. And did you know in the US there is a rule that the private insurers have to hand back (surpluses), when the claims in any year are less than the 85% of the premiums collected? They have to give their customer a rebate. Why don't we have that rule here? "

Blogger Roy Ngerng, who is currently involved in a defamatory lawsuit with Singapore's Prime Minister Lee Hsien Loong, was the last speaker at the protest event. He said it is known that 85% of all Singaporeans are not able to meet the CPF Minimum Sum in cash, and asked what is the CPF Minimum Sum is for.

He gave five points on what he thought the solution for the CPF should be:

  • Wages growth so that CPF will grow.
  • Increase the CPF interest rates so that CPF will grow.
  • Complete honesty with Singaporeans about what the government is doing with the CPF funds in GIC and Temasek Holdings, today and before.
  • Give Singaporeans the choice to decide when they want to take out their CPF.
  • Let an independent board manage the CPF, with transparency and accountability.

An elderly couple at the protest, both in their 60's shared that while they are not affected by the CPF issues, felt it was important to turn up for the event to support Ngerng, as they find what he is doing to be very relevant and constructive. While they only got to know about the event at 3pm via TR Emertius, the wife got the husband to bring her down to Hong Lim Park.

Mr Toh, in his 40's and still contributing to CPF, agrees that more transparency is needed with the CPF scheme. He also said that the Minimum Sum is unreasonable and felt that CPF members should be given a choice to continue investing their money with the CPF board or to simply retrieve the money as a lump sum. Mr Toh said that he found it an insult that the government thinks a 55 year-old cannot take care of his own money.

Another gentlemen in his 40's said that it was unfair for the government to be moving the “goal posts” for the Minimum Sum as well as changing the terms of contract, such as moving the draw-down age from 62 to 65. He also felt that people should be given the option to opt into the new scheme with the changes.

Mr Lim, in his 20's, said that the CPF scheme seems unfair given that there are so many people there at the protest, and this signals that there is an issue with the system. He said that more people are actively participating in such events in Singapore, which makes the country much more democratic.

Two elderly gentlemen in their 50's were seen trying to grasp what the speakers were saying as they did not understand English. They shared with TOC that they heard about the event from their friends and had wanted to hear what people have to say about the CPF. Although there were speeches made partly in Chinese, they said they would like to hear more.

Near the end of the event, a group of elderly pulled event organiser Han Hui Hui to the side of Hong Lim Park and thanked her for speaking up for them. As they do not understand English, they did not understand the earlier part of the speeches. They shared that they never expected anyone to speak up for the elderly and was happy to hear what Ms Han has said in her speech. Some of them cried as they said that many of their friends do not dare to turn up at the protest event as they are fearful of losing their homes if they were seen supporting "opposition events".

Ms Han was unsure about the numbers who attended the event, but felt more could have turned up given the topic of the protest. She has said that the protests on CPF will continue every month at Hong Lim Park and the date for the next protest will be on 23 August, 4pm.