ST: Buy private insurance to supplement mandatory CareShield Life if payouts not enough

Concerned with the backlash the govt is getting with regard to the recently announced CareShield Life disability insurance scheme, which would be made compulsory for all Singaporeans turned 30, Straits Times quickly published a sub-editorial on its second page to support CareShield Life (‘Paying now for care in future’, 30 May).

ST Senior Health Correspondent Salma Khalik reminded Singaporeans that many people will be disabled for “some years” when they grow old. “Singapore’s population is living longer and while our healthy years have gone up, there will be some years of disability for many people,” she wrote.

She quoted Ministry of Heath’s figures stressing that “half the people who are healthy at the age of 65 will find themselves severely disabled in the future.” In contrast, statistics in Canada and US have shown that only about 33% Canadians and 35% Americans are disabled aged 65 and above. MOH has not replied TOC with regards to the question of the data source that it based its statement on.

“The Government is trying to put in place sufficient support so that should we be unlucky half who get to that state, we would have the care we need,” she assured Singaporeans.

ST tells Singaporeans to buy private insurance to supplement the compulsory CareShield Life

To justify the miserable promised monthly payouts of $600 or more provided by CareShield Life for the disabled, Ms Khalik said that CareShield Life would provide enough for “basic care” but acknowledged that it does not provide all that a disabled person would need.

“Those who want that can buy private insurance supplements for higher payouts,” she suggested.

Then, to counter the criticism that other governments of first world countries are providing the necessary supports to their disabled without any mandatory insurance schemes, she said that the people in those countries are paying high taxes.

Backlash against CareShield Life

From postings, it can be seen that many netizens are not happy with the idea of paying compulsory premiums for CareShield Life. Even former NTUC Income CEO Tan Kim Lian is against it.

“I am against the concept of a compulsory scheme. I do not think that people should be forced to join the CareShield (Life), especially when the operation of the scheme is not transparent and there is the suspicion that some parties might be creaming off the profit,” Mr Tan commented.

“I would prefer that CareShield Life be a voluntary scheme, even on an opt-out basis. It should be made attractive through government subsidy so that most people will join the scheme voluntarily.”

“Let me express it with this slogan ‘Do not make it compulsory – make it attractive instead’,” he proposed.

Optional ElderShield garners $3.3 billion but pays only $133 million

Meanwhile, it has been revealed that the optional ElderShield, the disability insurance scheme which CareShield Life would gradually replace, already had some 1.3 million policyholders at the end of last year, with some $3.3 billion contributed into ElderShield.

But only $133 million has been paid out in claims so far, leaving about $3.2 billion with interests in the fund. It’s not known what the government is doing with the $3.2 billion plus interests sitting around.

A ST Forum reader, Lee Zhe Xu, wrote, “The Government has yet to specifically justify the need for this huge disparity (between collections and payouts) in more concrete terms, much less explain the need for the additional premiums levied under the new CareShield Life scheme.”

“Based on the provided data, it seems that the collected amount is more than sufficient to cover payouts, even if the cumulative value of these required payouts increases by a whopping 15 to 20 times over the next 15 years,” Mr Lee calculated. “In addition, these substantial surpluses could potentially be invested to yield further returns, thereby reducing the need to regularly raise premiums.”

MediShield Life collected almost 3 times it paid out

Mr Lee also noted that in the compulsory national medical insurance scheme MediShield Life, it has collected almost three times as much as what was paid out between Nov 2015 and Sep 2016.

“Assuming that MediShield Life – a more comprehensive and complex scheme – is sustainable on a 33 per cent collections-payout ratio, the Government needs to justify the need for premium increases for CareShield Life when the collections-payout ratio for ElderShield is currently at less than 4 per cent,” he reiterated.

“For instance, is the cost of the new CareShield Life expected to be more than eight times the cost of ElderShield? Is there a way to integrate the benefits of CareShield Life within the framework of MediShield Life, given that both are now compulsory?”

“The Government should answer these questions, for it otherwise risks giving the impression that it is conflating fiscal prudence with parsimony,” he said.

Walking ATMs

Meanwhile, Lim Tean, an opposition politician and lawyer, has criticised the PAP government for treating Singaporeans like “walking ATMs”.

“This so called CareShield Life compulsory scheme is the latest instalment by this PAP government of treating Singaporeans as walking ATMs,” he wrote on his Facebook page. “There was absolutely no consultation with Singaporeans to seek their views on whether they wanted such a scheme.”

“It is wrong in every aspect. It offers Singaporeans no choice in the matter. And the actuarial statistics from ElderShield are shocking to say the least,” he added.

“These schemes are just giant Money sucking machines at the end of the day! And now even our youths, who are already finding it tough starting out in life are going to be made to suffer even more. Whether you are the young, the millennials or the older generation, you should ask yourselves whether you will be better off with a non-PAP Government in 2020/2021.”