Medisave contribution rate to rise and ElderShield payouts to increase - Health Minister
3 Oct 2009 / 93.8 Live
The shape of an elderly financing framework to better serve the healthcare needs of Singapore's ageing population is now clearer.
To ensure people save money for their later years, the Ministry of Health (MOH) will be increasing the Medisave contribution rate.
And payouts for ElderShield - a severe disability insurance scheme for long-term care - at $400 per month for six years, could be increased to around $800 per month over eight years.
In an exclusive interview via email with MediaCorp, Health Minister Khaw Boon Wan gave a picture of what is to come as his ministry prepares to introduce the 3E framework - Eldersave, ElderShield and Elderfund - expected to be fully developed and bedded down over the next 15 to 20 years.
Said Mr Khaw: "A few pieces are already in place: Medifund Silver, ElderShield. But we need to do more."
One in five Singaporeans are expected to be over the age of 65 by 2030. Currently, those 65 and above make up 8.8 per cent of the resident population.
Given the rapidly ageing population, MOH is considering increasing the Medisave contribution rate to enable the national medical savings scheme to cover long-term care.
Currently, Singaporeans and permanent residents contribute 6.5 to 9 per cent of their monthly salary to their Medisave.
However, this "is only adequate for acute hospital care", said Mr Khaw, who earlier this year had flagged the possibility of either increasing the Medisave contribution rate or creating a new scheme altogether.
In Feburary, he said preliminary analysis of other countries' experience, such as the United States and Japan, showed that they spend less than 3 per cent of their gross domestic product on long-term care.
ElderShield will also be enhanced, hopefully satisfying those who have been calling for higher payouts.
"ElderShield today is still very basic ... I would like to increase the payout, to say $800 per month for eight years," revealed Mr Khaw.
"But this would mean having to increase the premiums," added the Health Minister. "If we cannot do it in one step, we may have to phase it in over time."
The changes are "necessary" as most patients will desire a higher level of nursing home or home nursing care, he explained. It could cost $800 to more than $4,000 a month to stay in a private nursing home.
What will not change is ElderShield's "philosophy of insuring only catastrophic needs", he said. "This will ensure low premiums and minimise abuses."
He noted that long-term care insurance in the West and Japan has been "severely abused" and "overwhelmed" because they cover all kinds of disability.
"This we must consciously avoid."
The third safety-net will be Medifund-Silver. The Government will continue to increase the endowment fund "as and when there are budget surpluses".
All said, the pace of these changes will depend on the health of economy. "When the economy has recovered, we will be in a position to do some of these," said Mr Khaw.
There are other systems to learn from, with Mr Khaw citing the well-integrated out-of-hospital care in Hong Kong.
He had spent an afternoon learning about this system when he attended the World Health Organization's Regional Meeting last week. "I will blog about it one day," he added.
3 Oct 2009 / 93.8 Live
The shape of an elderly financing framework to better serve the healthcare needs of Singapore's ageing population is now clearer.
To ensure people save money for their later years, the Ministry of Health (MOH) will be increasing the Medisave contribution rate.
And payouts for ElderShield - a severe disability insurance scheme for long-term care - at $400 per month for six years, could be increased to around $800 per month over eight years.
In an exclusive interview via email with MediaCorp, Health Minister Khaw Boon Wan gave a picture of what is to come as his ministry prepares to introduce the 3E framework - Eldersave, ElderShield and Elderfund - expected to be fully developed and bedded down over the next 15 to 20 years.
Said Mr Khaw: "A few pieces are already in place: Medifund Silver, ElderShield. But we need to do more."
One in five Singaporeans are expected to be over the age of 65 by 2030. Currently, those 65 and above make up 8.8 per cent of the resident population.
Given the rapidly ageing population, MOH is considering increasing the Medisave contribution rate to enable the national medical savings scheme to cover long-term care.
Currently, Singaporeans and permanent residents contribute 6.5 to 9 per cent of their monthly salary to their Medisave.
However, this "is only adequate for acute hospital care", said Mr Khaw, who earlier this year had flagged the possibility of either increasing the Medisave contribution rate or creating a new scheme altogether.
In Feburary, he said preliminary analysis of other countries' experience, such as the United States and Japan, showed that they spend less than 3 per cent of their gross domestic product on long-term care.
ElderShield will also be enhanced, hopefully satisfying those who have been calling for higher payouts.
"ElderShield today is still very basic ... I would like to increase the payout, to say $800 per month for eight years," revealed Mr Khaw.
"But this would mean having to increase the premiums," added the Health Minister. "If we cannot do it in one step, we may have to phase it in over time."
The changes are "necessary" as most patients will desire a higher level of nursing home or home nursing care, he explained. It could cost $800 to more than $4,000 a month to stay in a private nursing home.
What will not change is ElderShield's "philosophy of insuring only catastrophic needs", he said. "This will ensure low premiums and minimise abuses."
He noted that long-term care insurance in the West and Japan has been "severely abused" and "overwhelmed" because they cover all kinds of disability.
"This we must consciously avoid."
The third safety-net will be Medifund-Silver. The Government will continue to increase the endowment fund "as and when there are budget surpluses".
All said, the pace of these changes will depend on the health of economy. "When the economy has recovered, we will be in a position to do some of these," said Mr Khaw.
There are other systems to learn from, with Mr Khaw citing the well-integrated out-of-hospital care in Hong Kong.
He had spent an afternoon learning about this system when he attended the World Health Organization's Regional Meeting last week. "I will blog about it one day," he added.
