ElderShield not the only tool to finance intermediate and long-term care

5 May 2012, Straits Times Online

ElderShield payout inadequate

ELDERSHIELD now provides a monthly payout of $400 for up to 72 months to an insured person who has been medically assessed to be unable to perform at least three out of six specified activities of daily living.

The monthly payout of $400 is clearly inadequate to meet the cost of employing a caregiver at home or to put the insured person in a nursing home.

Health Minister Gan Kim Yong has reportedly warned that the Government needs to 'calibrate very carefully' any review of the ElderShield scheme.

The Government should continue to play an active part in setting the framework to ensure the fair treatment of consumers and for the fair assessment of eligibility for payouts. The claim payout rate, compared with the actuarial estimate, should be published.

The Government should also carry out regular audits to ensure that insurers are pricing the insurance product fairly and are not making excessive profits by overcharging consumers, or are reckless in under-pricing their product, leading to the prospect of insolvency.

The Government should consider giving a fiscal incentive to encourage the public to increase the amount of coverage on a voluntary basis. This can take the form of a 30 per cent subsidy on the cost of the long-term care insurance.

If consumers need to pay only 70 per cent of the actual cost, more people are likely to come forward to buy the supplementary insurance, and this would encourage insurance companies to compete for this attractive market.

In many countries, the governments have found that some form of tax or fiscal incentives is helpful in developing the insurance market and overcoming the resistance of consumers to set aside money for their future needs.

Singapore should follow the experience of these countries, in order to get our citizens to plan for their future needs.

Tan Kin Lian

Reply from MOH

12 May 2012, Straits Times Online

ElderShield not the only tool to finance intermediate and long-term care

WHILE ElderShield is an integral part of the funding system for long-term care of the elderly, it is not the sole means of paying for such care ('ElderShield payout inadequate' by Mr Tan Kin Lian; last Saturday).

Elderly Singaporeans can rely on a mix of government subsidies, community help, personal savings and family support. For the more vulnerable groups, additional state funding is provided to further reduce the cost to their families.

With the subsidy increases announced in Budget 2012 and ElderShield payouts, those who require home, centre-based or nursing home services will be able to better afford long-term care - up to 90 per cent of the intermediate and long-term care incurred by lower-income families will be covered.

Those who do not qualify for ElderShield can seek assistance under the Interim Disability Assistance Programme for the Elderly, which has also been recently enhanced to benefit more Singaporeans.

The Ministry of Health regularly monitors the ElderShield experience to ensure that policyholders' interests are looked after and that the scheme is sustainable in the long run.

We agree with Mr Tan's call to those requiring higher coverage to take the step in doing so. This group can purchase ElderShield Supplements using their Medisave, withdrawing up to $600 per year for the premiums.

We thank Mr Tan for his feedback and welcome public suggestions as we move on to review ElderShield next year.

Bey Mui Leng, Ms

Director, Corporate Communications

Ministry of Health