Channel NewsAsia

No out-of-pocket cash needed for MediShield Life premiums

The MediShield Life Review Committee has noted that with improved benefits and life-long, universal coverage under the new compulsory health insurance scheme, premiums will have to be increased to support additional payouts.

SINGAPORE: The MediShield Life Review Committee has noted that with improved benefits and life-long, universal coverage under the new compulsory health insurance scheme, premiums will have to be increased to support additional payouts.

Despite these increases, the additional one per cent contribution by employers to national health savings scheme Medisave, which kicks in next year, will be sufficient to cover the higher premiums for most people.

This means that household premiums will remain within Medisave contributions, with no additional cash outlay required. This is based on typical household types.

Singaporeans will experience enhanced benefits when MediShield Life begins in 2015 -- that is one of the reasons behind the higher premiums expected.

Premiums will also go up because Singaporeans will bear a small part of the cost incurred when MediShield Life protection is extended to those with pre-existing conditions.

However, the bulk of the cost, or more than half, will be borne by the government.

Bobby Chin, chairman of the MediShield Life Review Committee, said: "It's a community approach. There's an element of inclusiveness and we want to base it on the element of shared responsibility. But always remembering to balance this with premium affordability."

Another reason for higher premiums -- Singaporeans will pay more during their working years to cushion premium increases that will come as they age.

Premiums typically increase as one gets older, causing worry over such costs in retirement years. But with MediShield Life, paying for such premiums ahead of time during one's working years will mean that premium increases are less steep during retirement.

The committee said this addresses feedback it received that called for premiums to be kept affordable as people age.

Final details of MediShield Life premiums will be released at a later date as the committee said some fine-tuning still needs to be done. However, the government has already said that there will be help for Singaporeans -- especially for the lower and middle income, as well as the elderly.

The support measures encompass premium subsidies for the Pioneer Generation. These will also apply to low and middle-income households, which account for up to two-thirds of the population -- including those with per capita household income of up to S$2,600.

Transitional subsidies will also be provided for four years to ease the shift to MediShield Life.

Lifetime Medisave top-ups will also be part of the Pioneer Generation Package, and those between 55 and 64 years of age will receive top-ups for five years.

The committee said that regardless of the quantum of increase in premiums, it is the affordability that counts.

Mr Chin added: "Whether it's double, whether it's triple or quadruple, no doesn't matter. Whether it's one and a half times or not, the key thing is that it is affordable. From top-ups from the government, from subsidies given from the government."

The ministry will finalise the government subsidies and provide details at a later date. 

Tweet Photos, Videos and Update on this Story to  #cna