- POSTED: 27 May 2014 23:08
- UPDATED: 27 May 2014 23:23
MP Dr Janil Puthucheary and NCMP Gerald Giam had a verbal sparring match over the issue of MediShield in Parliament.
SINGAPORE: Member of Parliament Dr Janil Puthucheary and Non-Constituency Member of Parliament Gerald Giam had a verbal sparring match over the issue of MediShield in Parliament today (May 27).
Dr Puthucheary took issue with Mr Giam’s comments that MediShield “is collecting a lot more in premiums than it is paying out in claims", despite being a risk-sharing scheme that is “supposed to be a form of social health insurance”.
Dr Putucheary argued that premiums were higher than payouts because Singapore’s population is ageing. “There are uncertain risks in the future, there are likely to be rising costs,” he said, and there are risks that come with ensuring payouts equal to premiums that would not be good for the long-term health of the nation.
Mr Giam cited the example of the United States’ Affordable Care Act – popularly known as Obamacare – which he says mandates a minimum loss ratio of 80 to 85 per cent. “Insurers that do not spend 80 per cent to 85 per cent of premiums on healthcare costs must now issue rebates to consumers, and these are all commerical insurers, not social health insurance,” he said, adding that MediShield’s loss ratio averaged 63 per cent over the last 11 years.
The comparison with Obamacare drew criticism from Dr Puthucheary, who did not believe it was valid to compare a public social insurance scheme like MediShield with the private, for-profit insurance environment in the US. “Even the policy-makers and office-holders in the US readily admit that a short-term electoral outlook significantly constrains their ability to take a long-term strategic vision for healthcare system of their nation.”
In his view, the worst-case scenario for a system where the payouts are far less than the premiums collected is that “we save a little bit too much”, whereas the worst-case scenario for increasing payouts is an insolvent public healthcare financing system that is unable to support the healthcare needs of the population.
“The intellectually honest thing to do is to compare risks versus risks, benefits versus benefits, worst-case scenario against worst-case scenario; not to cherry-pick the benefits of your proposal against the potential risks of the proposal in front of you,” he said.
Mr Giam maintained that a not-for-profit social insurance scheme like MediShield should have a much higher loss ratio than a commercial insurance scheme, adding that it is now relatively easy to project likely payouts based on the way medical expenses are trending.
If an unusual event such as SARS occurred in a certain year, for example, “then we have a situation where the Government would have to step in and subsidise a bit more of the cost”, said Mr Giam. “Then the premiums can rise behind the increase in cost, not before you know that the cost is going to increase, then you raise the premiums.”
Dr Puthucheary disagreed strongly with this, asserting that there is a lot of uncertainty about how medical costs will increase. “SARS is a great example. It is precisely because of the prudent, conservative, risk-averse approach we take on a day-to-day basis that when someting like SARS comes along, the government is able to step in and do what needs to be done.”
He reiterated that it is important to to take a “longer-term prudent approach past one electoral cycle” as the thing at stake was the “social public good”.