Commentary: Merdeka Generation Package can afford to go further to help our poor elderly

Commentary: Merdeka Generation Package can afford to go further to help our poor elderly

One challenge in healthcare financing is that older, low-wage workers have insufficient funds in their Medisave accounts, which they could have used to purchase health insurance for themselves, says KPMG’s Gan Kwee Lian.

Budget 2018 file - elderly 11
File photo of elderly man in Singapore. (Photo: Gaya Chandramohan)

SINGAPORE: At first look, the newly announced Merdeka Generation Package (MGP) sounds generous.

With S$6.1 billion set aside for now, and valued at a total of S$8 billion in today’s terms after accumulation of interest, it will help seniors with their healthcare bills as they age.  

But some worry whether it will be enough. Considering that the current life expectancy in Singapore is now 84.8 years, it can mean that this programme will have to last nearly 25 years and perhaps longer, yet is valued at less than the Pioneer Generation Package’s full projected cost of S$9 billion.

Subsidies are on the overall also lower, as was expected, as the Merdeka Generation benefited from advances in healthcare, manpower and a growing Singapore economy more so than the Pioneer Generation.

There are some details missing, for instance how much exactly the subsidies for GPs and dental clinics are, but those for outpatient care stand at 25 per cent off subsidised bills at government polyclinics and public Specialist Outpatient Clinics, lower than that provided to the Pioneer Generation.

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In the likely situation that, over time, one’s medical needs escalate with age, the shortfall in financial coverage becomes altogether more glaring.

PROGRESSIVE IN ITS EFFECTS

Still, although every Singaporean eligible for the MGP stands to gain from it, the benefits are progressive in its effects, to those in the lower income brackets.

Professionals, managers, executives and technicians among us would already have a sizable Medisave account, and two-thirds of Singaporeans have an integrated shield plan.

The MGP also builds on the Community Health Assistance Scheme (CHAS), enhancements to provide stronger coverage for seniors and low-income households and include chronic conditions were recently announced, and will provide subsidies for primary care at a more generous rate than CHAS. Families have access to about 1,000 general practitioner clinics and 700 dental clinics under CHAS.

CHAS cards
Community Health Assist Scheme (CHAS) cards. (File photo: Ministry of Communications and Information) 

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If taken in the context of other strides made to bolster the acute and primary care sectors in Singapore, the MGP puts in place another building block to help seniors of that vintage and their families get better access to quality but affordable healthcare.

The Ministry of Health will also open more polyclinics and hospitals by 2030, benefiting the larger population. The additional savings of travelling to a clinic or hospital near your home will be a boon for lower wage earners, retirees, the disabled and those who need to make frequent visits to seek treatment for their medical conditions.

But further changes in medicine and the delivery of healthcare can help provide greater assurance, if patients are open to new ways of consultation including telemedicine and as home-visits by healthcare volunteer practitioners become more prevalent. There have been attempts to push the envelop and pilot initiatives, but wider adoption will take time.

LET PEOPLE DONATE THEIR MEDISAVE

Minister for Finance Heng Swee Keat outlined three strategies towards its long-term plan to build a caring and inclusive society. Apart from uplifting Singaporeans to maximise their potential, Mr Heng said the Government aims to provide greater healthcare assurance to Singaporeans and foster a community of care.

LISTEN: A wish list for healthcare after the Merdeka Generation Package, an episode on The Pulse podcast

One challenge in healthcare financing is that older, low-wage workers have insufficient funds in their Medisave accounts, which they could have used to purchase health insurance for themselves, whereas PMETs are more likely to have a good amount in their Medisave account and have good insurance coverage.

Since the Merdeka Generation Medisave top-ups will be given to all, why not let those who can afford it to donate their S$200 Medisave top-up, to be redeployed by the Government to others in a lower wage bracket?

 

elderly worker
File photo of an elderly worker in Singapore. (Photo: TODAY)

If we want to build a community of care, the Government could also consider supporting this endeavour and let it count as a deductible charitable contribution. The recipient enjoys a small bump in their Medisave, the donor gets a tax deduction as he would for donations to an Institute of Public Character, while also bumping up his Corporate Social Responsibility points. All parties win.

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It might not be a big, sweeping healthcare programme but can go some way to support low-wage seniors’ healthcare needs.

The Government can show that every Singaporean can help each other and play a part in the healthcare financing ecosystem, even as it puts in place huge programmes like the Merdeka Generation Package to provide broad-based aid across the board.

Gan Kwee Lian is Partner for Tax, Infrastructure, Government and Healthcare at KPMG Singapore.

Source: CNA/nr(sl)

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