Majority of middle income earners will still enjoy full subsidy

11 Mar 2008, My Paper

Question

Middle-income earners badly hit

My Paper (7 Mar) carried a letter from Yak Chin Hua, who questioned the basis for deciding on the cut-off points of $3,200 and $5,200, and opined that a pay adjustment of 3 per cent either way at these two bands will mean a change in subsidy of only 1 to 2 per cent of the total bill, which is tiny when compared to the rise in medical costs, which was 7.4 per cent last year. Mr Yak used a $10,000 medical bill to illustrate how a 7.4 per cent hike in medical costs will still translate into extra costs of between $684 and $740 for the patient, regardless of whether the patient gets a pay rise (and gets less subsidy) or pay cut (and gets more subsidy). Mr Yak opined that what is more important is how much of the jump in medical costs the government will subsidise for all those earning up to $5,200 a month.

Reply

Reply from MOH 

Mr Yak Chin Hua feared that the "Middle-income earners (will be) badly hit" (My Paper, March 7) with means-testing in hospitals.  His fear is unfounded.  As noted by many, the income cut-offs we have adopted will ensure that the full subsidy received by low-income patients will similarly be enjoyed by a majority of middle-income earners.

Mr Yak gave an example of a hospitalization bill of $10,000 to illustrate his fear.  But such bills are not illustrative.  The fact is that most Class C hospitalizations cost less than $2,000, not $10,000 which is uncommon.  For a high- and middle-income earner, the bill with subsidy of 65% for Class C will still be affordable.  The average Medisave balance for this income group exceeds $20,000 per account.

In any case, the solution to large but uncommon hospital bills is through MediShield.  All Singaporeans should subscribe to MediShield, and all middle- and high-income earners should top up with MediShield Riders.  That is the way to eliminate any fear of high medical cost.