CARESHIELD LIFE AND LONG-TERM CARE BILL TO SUPPORT COMPREHENSIVE LONG-TERM CARE FINANCING SYSTEM

1    As Singaporeans live longer, more of us will face ageing-related illnesses and disability, and require long-term care. In May 2018, the Ministry of Health (MOH) accepted the ElderShield Review Committee’s recommendations, and the report was debated in Parliament in July 2018. MOH announced that we will be strengthening three long-term care financing pillars to provide Singaporeans with greater assurance on affordable aged care.

    (i)  CareShield Life, a new long-term care insurance scheme. The Government will provide premium support and incentives for Singaporeans to join the scheme;

    (ii)  ElderFund, a new discretionary Government assistance scheme for lower-income Singaporeans; and

   (iii)  Extending the use of MediSave withdrawals in cash to support long-term care needs and expenses.

   (iv)  CareShield Life will be launched in mid-2020 for Singaporeans born in 1980 or later, and progressively extended from mid-2021 to Singaporeans born in 1979 or earlier. MediSave withdrawals for long-term care will begin in mid-2020. To help severely disabled, lower-income Singaporeans who need financial assistance, ElderFund will start in January 2020.

Key provisions of the CareShield Life and Long-Term Care Bill

3    The CareShield Life and Long-Term Care Bill provides the legislative framework for the establishment, governance and administration of CareShield Life, and facilitates the implementation of other long-term care financing measures for the severely disabled.

Establishment of the CareShield Life scheme

4    CareShield Life will provide better protection, through lifetime payouts that last as long as policyholders are severely disabled¹. Starting payouts will be significantly higher than ElderShield at $600 per month, and will increase over time.

5    CareShield Life will provide universal coverage to all Singaporeans born in or after 1980, to ensure basic protection of the long-term care needs for our future generations, including those with pre-existing disability. Those aged 30 to 40 in 2020² will be the first cohorts to join the scheme. Subsequent future cohorts will join the scheme when they reach the age of 30. Transitional Subsidies will be provided for all future cohorts of Singapore Citizens for the first five years of scheme launch, from 2020 to 2024.

6    Existing cohorts of Singaporeans³ are encouraged to join CareShield Life from 2021 if they are not severely disabled, but it will remain optional for them. The Government will provide Participation Incentives of up to $2,500 to all Singapore Citizens from existing cohorts who join CareShield Life in the first two years from 2021. Merdeka and Pioneer Generation Seniors are eligible for Additional Participation Incentives of $1,500.

7    To ensure that premiums are affordable and that no Singaporean loses coverage due to financial difficulties, CareShield Life will have the following features:

   (a)  Use of MediSave for Premiums. Singaporeans can use their MediSave to pay for their CareShield Life premiums and that of their immediate family members.

   (b)  Permanent Means-Tested Subsidies. The Government will provide permanent means-tested subsidies for lower- to middle-income Singapore Resident policyholders. Up to two-thirds of households will be eligible for CareShield Life premium subsidies of up to 30%.

  (c)  Additional Premium Support. Singapore Citizens in financial need who are unable to pay for their premiums even after the premium subsidies can apply for Additional Premium Support.

8    MOH will also make the claim process more convenient for the severely disabled and their caregivers. We aim to double the number of disability assessors to about 300 by the launch of CareShield Life. We are also working with healthcare institutions to progressively expand the types of disability assessments recognised for claims so that policyholders need not undergo additional disability assessments if a similar disability assessment had been completed. We will also modify the disability assessment framework to explicitly consider the impact of cognitive impairments on functional ability.

Administration of CareShield Life

9    The Bill also provides for the setting up of CareShield Life and ElderShield Insurance Fund and the Long-Term Care Support Fund. These Funds will be accounted for and managed separately, and each Fund’s accounts will be made public.

10    The CareShield Life and ElderShield Insurance Fund is the fund that will hold premiums collected under CareShield Life and ElderShield for the schemes’ payouts and expenses. It will be managed in a not-for-profit manner by the Central Provident Fund (CPF) Board, and its moneys can only be used for policyholders’ benefits or scheme administration. The Government or the CPF Board as the Fund administrator cannot remove any Fund moneys for its own use.

11    The Long-Term Care Support Fund, to be managed by MOH, will fund premium subsidies and participation incentives for CareShield Life, and provide financial support for severely disabled persons for prescribed public schemes such as ElderFund. The Government will set aside $5.1 billion into the Long-Term Care Support Fund, of which $100 million will be used to cover a significant portion of the costs of including Singaporeans with pre-existing disabilities who were born in or after 1980.

12    The CPF Board and Agency for Integrated Care (AIC) will be appointed as administrators for CareShield Life. The two agencies will also be the key administrators of ElderShield, when the scheme is transferred to the government in 2021. This will facilitate a smoother upgrading from ElderShield to CareShield Life for those who choose to do so.

Scheme Governance

13    The CareShield Life and Long-Term Care Bill provides for various safeguards to ensure robust scheme governance. An independent CareShield Life Council will be set up to oversee the governance of CareShield Life and ElderShield. The roles of the Council include reviewing CareShield Life premiums and payout increases, and advising on matters related to the investment of the CareShield Life and ElderShield Insurance Fund. The Council will be established by the time the CareShield Life scheme takes effect.

14    The Bill provides for a premium recovery framework for willful premium defaulters similar to that for MediShield Life. This is to be fair to policyholders who dutifully pay premiums. The Bill also makes false declarations and fraudulent disability assessments offences, with penalties to deter such offences.

Other long-term care financing measures for the severely disabled

15  In addition to insurance, personal and family savings is an important source of funding for long-term care needs. From mid-2020, severely disabled Singapore Residents aged 30 and above will be able to tap on their own or their spouse’s MediSave accounts for their long-term care needs.

16    After setting aside a minimum amount to ensure adequacy for other medical expenses, they can withdraw up to $2,400 per year (i.e. $200 per month) in cash to supplement their long-term care needs.

17    From January 2020, ElderFund will assist lower-income Singapore Citizens aged 30 and above, who are severely disabled and need additional financial support for long-term care. Eligible Singapore Citizens can receive up to $250 per month in cash, with no cap on payout duration. ElderFund will especially benefit those who unable to join CareShield Life, or have low MediSave balances and personal savings to meet long-term care needs.

MINISTRY OF HEALTH
2 SEPTEMBER 2019

¹ Severe disability is defined as being unable to perform three or more Activities of Daily Living (ADLs).

² Singapore Residents born between 1980 and 1990

³ Singapore Residents born in 1979 or earlier