Eldershield Reform - Launch of Public Consultation and Eldershield Tender

03 Apr 2007

Launched in 2002, ElderShield is a severe disability insurance scheme to help Singaporeans pay for their long-term step-down care if they become severely disabled. Risk pooling through insurance can help in step-down care financing for those with severe disabilities, because not everyone will experience disability during one's lifetime, and even fewer persons will experience a severe disability requiring extensive help.

The insurers appointed by Ministry of Health (MOH) in 2002 to operate ElderShield for an initial period of 5 years are Great Eastern Life and NTUC Income. The contract will be due for renewal in Sep 2007.

OBJECTIVES OF ELDERSHIELD REFORM

Taking into account the ElderShield experience to date and public feedback, MOH is using the opportunity of the contract renewal to reform the ElderShield scheme to make it work better so as to meet the needs of Singaporeans. The objectives of the ElderShield reform are to:

Preserve an opt-out basic ElderShield that all Singaporeans, including the low income group, can afford;

Promote diversity in product offerings to meet different needs of the population;

Protect the national risk pool for the basic ElderShield product, i.e. avoiding cherry picking; and

Encourage wider participation by more insurers.

Specifically, MOH will reform the ElderShield structure to:

Retain a "basic ElderShield" for all Singaporeans that will help pay for basic no-frills long-term step-down care. We expect additional insurers to offer the basic ElderShield product; and

Allow insurers to offer "ElderShield Supplements" with additional benefits on top of the basic ElderShield plan, at different premium prices, with premiums payable from Medisave up to a specified withdrawal limit. Insurers will be selected through an open tender.

The proposed timeline for the ElderShield Reform is shown in the table

Table 1: Timeline for Eldershield Reform

LAUNCH OF PUBLIC CONSULTATION

MOH is launching a public consultation exercise to gather feedback on how ElderShield can be improved to meet the above objectives. The feedback and views gathered will be used to determine the final benefit design for ElderShield. Please refer to the Public Consultation paper on ElderShield Reform for more details.

All feedback on ElderShield should reach the Ministry by 30 Apr 2007. The public can provide feedback at online via the eConsultation page. 

ELDERSHIELD TENDER

In parallel, MOH is conducting an open tender to appoint insurers for the Provision of a Severe Disability Insurance Scheme (ElderShield) for a new 5-year period (30 Sep 2007- 30 Sep 2012). Insurers are invited to bid for:

The right to offer the basic ElderShield as an opt-out scheme for eligible CPF members from 30 Sep 2007; and

The right to offer ElderShield Supplement plans, with additional benefits and higher premiums on top of the Basic ElderShield plan, with premiums payable from Medisave up to a specified withdrawal limit. ElderShield Supplements will be marketed as an opt-in scheme.

Insurers are invited to submit quotations of their proposed premiums for the scheme. The selection of insurers will take into account several factors such as the proposed premiums, the effectiveness of proposed business plans for Eldershield, expertise and experience in relation to severe disability or long-term care plans, level of investment in resources for ElderShield.

The ElderShield tender document is published in GeBiz on 2 Apr 2007, and contains all technical details of the ElderShield scheme, and other necessary information for the purpose of submitting a tender bid.

Interested insurers must submit their quotations and business plans to MOH through GeBiz no later than 1600 hrs on 30 Apr 2007.

ELDERSHIELD EXPERIENCE 2002-2007

MOH has prepared an information paper on the ElderShield experience ("ElderShield Experience 2002-2007") since the scheme's inception. The key points are:

ElderShield membership has grown over time, with opt-out rates stabilising at levels significantly lower than those experienced in the earlier years of the scheme.

The number of claims to date appears low, but this is due to: (i) the relatively young age profile of ElderShield policyholders; and (ii) the fact that those aged 70 and above or with pre-existing disabilities were deliberately excluded from ElderShield coverage, and separately assisted under the Interim Disability Assistance Programme for the Elderly (IDAPE).

Claims acceptance rates have increased over time, and will likely increase further as policyholders age. Overseas experience has shown that the likelihood of making a claim increases sharply after age 70.