SINGAPORE: Experts said that payouts through severe disability insurance scheme Eldershield can be upped and the scheme's coverage can be improved.
Responding to recommendations by the ElderShield review committee on Tuesday (Jan 30), they told Channel NewsAsia that the current payout of S$300 or S$400 may be too little.
Health economist from the Lee Kuan Yew School of Public Policy Dr Phua Kai Hong said that the payouts may have to be raised to cover at least half of the average monthly cost of providing intermediate or long-term care, which could come up to more than S$1,000.
He added that eligibility for the payouts has to be better defined. Currently, payouts are given to those who cannot independently perform at least three of six activities of daily living - washing, dressing, feeding, toileting, moving around or transferring oneself from a bed to a chair. The standard is used by the approved private insurers which offer such disability insurance schemes.
He called the criteria "over-simplified" compared to case management in other countries like Japan that use more complex matrices that account for factors like changes in severity of disabilities and level of social and financial support.
A director with online financial adviser InsureDIY, Lim Shujun, said that she hopes the enhancements will include better coverage and benefits.
“The feedback has consistently been that the benefits are too low in terms of both payout and duration,” she said.
Echoing the sentiment, executive director of the Disabled People’s Association Dr Marissa Lee Medjeral-Mills said there needs to be further study into whether the current payouts will be enough to help with the kind of assistance people with severe disabilities require.
In an attempt to make the scheme universal, the committee recommended that those with pre-existing severe disabilities be included among future policyholders. This is not the case currently.
Giving an interim update on Tuesday, the review committee’s chairman Chaly Mah said that premiums will "probably" increase.
He added that the committee is reviewing payouts, which are pegged to premiums and the payout period. Currently, S$300 monthly payouts are given for a maximum of five years, while S$400 payouts, for up to six years, depending on when policyholders joined the scheme.
The full set of recommendations are expected by the middle of this year. The enhancements to the scheme, if implemented, will apply to those aged 40 and below when it takes effect.
RECOMMENDATION FOR COMPULSORY ELDERSHIELD BENEFICIAL
Among the recommendations by the committee was that an opt-out component should be scrapped.
Associate Professor Angelique Chan, executive director of the Centre for Ageing Research and Education (Care) at the Duke-NUS Medical School said the suggestion to make the scheme mandatory is good because people often underestimate the probability of becoming disabled.
“After age 60, a woman can expect to live 26 more years but eight of these will be in a disabled state. For men, after age 60, they can expect to live 22 more years with three of these years in a disabled state,” she said.
Prof Chan, whose research interests are ageing and health, added that the more educated are likely to live longer than the less educated and thus “we project a growing population of disabled as our population gets more educated”.
Dr Phua also said he agreed with the scheme being made compulsory to prevent practices like "cream-skimming" by insurers.
This refers to choosing patients for characteristics other than their need for care, which improves the profitability or reputation of the provider. It often means choosing less ill patients.
“When then there is a choice to opt out, those who are likely to need the insurance the most, the poor elderly, are likely to opt out. Those who can afford to contribute to the risk-pooling and those who can afford alternative financing, are also likely to opt out,” he said.
In response to the committee's recommendations that the Government take over as a single administrator of the scheme instead of the current three private insurers, Dr Phua said long-term care is a societal problem that the Government can best fix.
“Long-term care is not completely insurable by the private insurance industry, as the risks and costs are not predictable with an increasingly ageing population, and they are profit-driven,” he said.
STARTING ELDERSHIELD EARLIER
The committee also suggested that enrolment into the scheme start at age 30 instead of 40, in order to ensure the scheme is affordable.
“It helps us spread the premium over a longer period, it helps younger people start to think about caring for the time when they start to get older,” Mr Mah said.
Ms Valerie Toh, 31, an office manager thought an enrolment age of 35 was more manageable, as people tend to be more financially secure then. But Ms Kavitha Meyappan, 30, a civil servant agreed with the recommendation.
“We aim to be an inclusive society so that’s good. As long as it can be paid through Medisave, I am okay with pooling the money for the future,” she said.