Disability insurance CareShield Life to start next year as Parliament passes Bill

Disability insurance CareShield Life to start next year as Parliament passes Bill

From next year, Singaporeans born in 1980 or later will be enrolled in compulsory long-term disability insurance, after Parliament passed the CareShield Life and Long-term Care Bill on Monday (Sep 2). Deborah Wong and Lee Li Ying report.

SINGAPORE: From next year, Singaporeans born in 1980 or later will be enrolled in compulsory long-term disability insurance, after Parliament passed the CareShield Life and Long-term Care Bill on Monday (Sep 2).

At S$600 per month, starting payouts for Singaporeans with severe disability will be significantly higher than under the existing ElderShield scheme, and will increase over time, said the Ministry of Health (MOH).

Severe disability is defined as being unable to perform three or more Activities of Daily Living (ADLs). These include washing, feeding, dressing, toileting, mobility and transferring independently.

The new CareShield Life scheme will be launched around mid-2020 for Singaporeans born from 1980 onwards, said Health Minister Gan Kim Yong in Parliament on Monday.

While ElderShield pays out S$300 or S$400 per month, for up to six years, CareShield Life's higher payout lasts potentially for life and as long as the person remains severely disabled.

"This provides universal coverage for future generations of Singaporeans, ensuring Careshield Life coverage for them regardless of their health, pre-existing disability, or financial status," said Mr Gan.

MOH aims to progressively launch the scheme for Singaporeans born in 1979 or earlier, from mid-2021. The scheme is optional for them.

READ: Six things you should know about CareShield Life

READ: Incentives of between S$500 and S$2,500 for Singaporeans to join CareShield Life

Mr Gan highlighted that the payouts of CareShield Life and ElderShield will be in cash to give claimants more flexibility when choosing their care arrangement. 

For policyholders who lack mental capacity, a caregiver can receive the payout on their behalf.

Healthcare institutions, such as nursing homes, can also be nominated to get the payouts, ensuring continuity of care.

READ: Health ministry launches online calculator for CareShield Life premiums

READ: Health Minister Gan Kim Yong reiterates importance of CareShield Life for long-term care needs

MOH said Singaporeans can use MediSave to pay for their own premiums and that of immediate family members, and up to two-thirds of households will be eligible for premium subsidies of up to 30 per cent.

Mr Gan also said ElderFund, a government assistance scheme for low-income, severely disabled Singapore citizens aged 30 and above, will be launched in Jan 2020.

Members of Parliament (MPs) who spoke during Tuesday’s debate supported the Bill, noting that the additional support will benefit severely disabled Singaporeans who need long-term care. 

During the debate, MPs brought up several concerns, including the affordability of premiums and the conditions that must be met before qualifying for a payout.

CALLS FOR GENDER-EQUAL PREMIUMS

Many MPs raised questions about the rationalefor women to pay higher premiums. Not including subsidies, the annual premium for a man turning 30 in 2020 is expected to be S$206, while the premium for a woman would be S$253.

While CareShield Life premiums are gender-differentiated due to “actuarial assessments”, NMP Anthea Ong argued that society “should not be defined by these numbers solely”.

Anthea Ong parl sep 2
NMP Anthea Ong raised concerns about the difference in premiums for men and women. 

“I believe that designing a mandatory and national long-term care insurance scheme with a framework that discriminates based on gender will set us back a long way in pursuing gender equality,” she said.

READ: MPs question gender-based premiums, criteria for disability payouts 

Highlighting the principle of risk-pooling in insurance, NMP Irene Quay suggested that gender-differentiated premiums could "start the trend of potentially differentiating premiums in future by race or other genetic risk factors as we advance into precision medicine".

Speaking for the Workers’ Party, MP Leon Perera reiterated the party's call for premiums to be equal for men and women.

“The advantage of sending the signal about gender equality in major public policy formation outweighs the disadvantages explained by the Government,” he said.

In response, Senior Minister of State for Health Edwin Tong explained that averaging out premiums between men and women could only work in a fully universal scheme.

As CareShield Life is only compulsory for those born in 1980 and after, the optional nature of CareShield for existing cohorts would increase the risk of “gender skewing” in the risk pool.

“Gender-neutral premiums could well encourage male policyholders to stay on ElderShield and buy gender-differentiated premiums from the private insurers, which may now appear cheaper.

“Conversely, female policyholders would now find CareShield Life a much better deal than the existing gender-differentiated ElderShield.

“The gender-neutral premiums would become increasingly unsustainable and premiums would have to increase, possibly approaching the level women would have had to pay anyway under a gender-differentiated scheme, but without covering a significant proportion of men,” said Mr Tong.

CURRENT ADL REQUIREMENTS “STRICT” 

The current definition of severe disability was also a hot topic, with many MPs calling for support for those who fall outside of it. 

Describing the current definition as “somewhat strict”, MP Jessica Tan said: “When one is already in the unfortunate position of being afflicted with disability, what help will there be to ensure that the process for disability assessment and eligibility will not be onerous?”

“For those with two ADLs who are already participating in the CareShield Life scheme and they are not eligible for the claim payouts, do they need to continue to pay future premiums for CareShield Life if they’re unable to work?”

MP Fatimah Lateef noted that the current definition does not cover mental or psychological incapacity and disability. 

“We know that for people who have very severe psychological and psychiatric problems, they may not be able to perform the activities of daily living.”

Fatima Lateef parl sep 2
MP Fatima Lateef noted that the current definition of sever disability does not cover mental or psychological incapacity and disability. 

She called on MOH to review this alongside the Ministry of Social and Family Development and other ministries.

Several MPs also questioned the rationale of setting the age of eligibility at 30, citing that disaster could strike even before an individual turns 30. They also raised concerns for individuals who are born with mental or physical disabilities. 

MP Cheryl Chan said: “Parents that I met, with children of special needs, are genuinely concerned ... What more can they do to have a peace of mind that their children will not be left to fend for themselves when they are unable to take care of them in the long run?”

Ms Chan suggested that MOH consider including coverage for all individuals born in and after 1980, who by birth have a physical disability and or lack the mental capacity to function in their daily activities. 

Mr Tong said in response that there are other schemes with no age criterion that can support younger severely disabled Singaporeans.

AFFORDABILITY OF PREMIUMS 

MPs also raised concerns about the affordability of the premiums given the higher payouts, and whether they would be competitive compared to those provided by private insurers.

Chairman of the Government Parliamentary Committee (GPC) for Health Chia Shi-Lu said while enrolling older Singaporeans into the expanded benefits would be costly, the Government could consider further measures to financially support older cohorts to encourage them to take up CareShield Life. 

“How will the Government support older Singaporeans who are unable or unwilling to enrol in CareShield Life, should they become significantly disabled in the future?” he added. 

Quoting the GPC’s recommendations on CareShield Life, Dr Chia noted that a balance has to be struck between increasing and expanding benefits so that the programme remains relevant and useful, while keeping the scheme both affordable and sustainable for the long term.

Lily Neo parl sep 2
MP Lily Neo argued that $600 may not be enough to cover the basic long-term care costs of severely disabled individuals. 

MPs Lily Neo and Chen Show Mao also noted that S$600 may not be enough to cover the basic long-term care costs of severely handicapped individuals.

Ms Neo suggested that the Government could provide "riders" for individuals who want better payouts, instead of depending on private insurers.

Mr Tong noted that increasing the payout or expanding coverage for the scheme would result in higher premiums.

Edwin Tong
Senior Minister of State for the Ministry of Health Edwin Tong said that Singapore's healthcare system has to evolve to better serve the needs of Singaporeans.

He assured MPs that MOH will reach out to vulnerable Singaporeans who may not understand the different schemes available.

“As Singaporeans live longer, our healthcare system has to evolve to better serve the needs of Singaporeans," he said.

“We have put in place measures to help Singaporeans remain healthy for as long as possible … At the same time, we will continue to invest in infrastructure and the services ... to support those who fall into disability."

Source: CN/hw(hm)

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