Government Responds to MediShield Life Review Committee’s Preliminary Observations (4 Feb 2014)

1. The Ministry of Health (MOH) welcomes the preliminary observations of the MediShield Life Review Committee (MLRC). The Ministry will study these observations carefully and take them into account in designing MediShield Life, in particular, the need to keep premiums affordable even as benefits are enhanced for better assurance, and the Committee's call to help vulnerable groups with their premiums. As an interim measure while the review is on-going, the Ministry will extend the current MediShield maximum coverage age of 90 years from March 2014. This will ensure that current insured elderly can continue to enjoy MediShield protection, prior to the implementation of MediShield Life.

Response to Preliminary Observations by the MLRC

2. The Ministry thanks the MLRC members and the 500 Singaporeans who have contributed their suggestions and ideas in 14 feedback sessions between November 2013 and January 2014.

3. MOH notes the MLRC’s observations that Singaporeans have expressed support for the better and lifelong protection offered by MediShield Life. However, there have been concerns about premium affordability, especially for the elderly and low-income. Questions have also been raised about the implications of bringing in the uninsured and the approach towards increasing pre-funding.

4. The Ministry agrees with the MLRC’s focus on enhancing the benefits under MediShield Life to reduce the co-payment borne by patients. This will ensure greater peace of mind for Singaporeans against the risk of incurring large hospital bills. MOH also agrees with the Committee's view that in exploring enhancements to the scheme, a balance will need to be struck between enhanced benefits and higher premiums, to ensure that the scheme remains sustainable and affordable for Singaporeans, and to guard against inadvertent over-consumption or over-provision of healthcare services.

5. To provide universal coverage for all Singaporeans under MediShield Life, including those who are currently uninsured and may have some pre-existing conditions, all of us can shoulder a small part as a society to support and include this group. The Government is also prepared to take on a share of the cost of including them.

6. The Ministry also notes the MLRC’s findings that there is a lack of understanding on the objective of pre-funding, and how it works. The Ministry will work with the MLRC to help the public understand better the concept of pre-funding for MediShield Life, which aims to ensure a better spread of premium payments across individuals’ lifetimes, so as to improve premium affordability in old age. It is important that we avoid inter-generational cross-subsidy as it is not sustainable. The pre-funded amounts paid by each age cohort should be set aside for their own use in future, and not used to subsidise premiums for the current elderly.

7. The MLRC has also suggested for the Government to step in and help the elderly and low-income with their premiums when MediShield Life is implemented. The Government is committed to help vulnerable groups with their premiums, with the details of subsidies to be worked out following the Committee’s recommendations on the MediShield Life parameters and the premiums payable. One key consideration is to keep premiums payable by the lower income to be within their Medisave contribution levels, through various Government subsidies and support measures, so that they need not fork out cash for their MediShield Life premiums. This will give them the assurance that Medishield Life will be affordable. For older generation Singaporeans, the Government will step in to help with the Pioneer Generation package, with details to be announced in due course.

8. The Ministry notes the Committee's suggestion to improve public education on healthcare financing and will step up our efforts in this area, in partnership with community organisations.

9. The Ministry looks forward to MLRC’s next phase of work, focusing on details regarding improvement to benefits; the cost-sharing framework for bringing in the uninsured; and the approach towards pre-funding.

Extension of MediShield Maximum Coverage Age

10. As an interim measure while the MediShield Life review is on-going, the Ministry will be extending MediShield coverage for those who have reached the age of 90. This will ensure that elderly MediShield policyholders do not drop out of the scheme due to them reaching the maximum coverage age before the implementation of MediShield Life.

11. The interim extension will take effect from 1 March 2014 and will benefit an estimated 150 policyholders who will be turning 91 soon. The annual MediShield premiums for insured members aged above 90 will be maintained at the same amount as that of those aged 90, at $1,190.

MINISTRY OF HEALTH
4 February 2014