SINGAPORE: Premiums for CareShield Life - an enhanced version of national disability scheme ElderShield, should not be gender-differentiated, several MPs argued in Parliament on Tuesday (Jul 10).
A total of 20 Members debated the scheme, which was designed based on the recommendations of an ElderShield Review Committee. Several MPs said that the differentiation makes the scheme less inclusive.
MP for Tanjong Pagar GRC Lily Neo said that some women might find it harder to pay for premiums and urged Health Minister Gan Kim Yong to reconsider the higher premiums for women.
“While I can understand that women live longer, I feel that there can be better inclusiveness and fairness. My concern is that women may have less means to pay for premiums compared to men," she said, adding that women are earning less due to family commitments and may have even less savings to spare with increasing age.
Workers’ Party’s (WP's) Sylvia Lim echoed the same view. She pointed to an article by a professor from the London School of Economics, which argued that social insurance schemes for long-term care should not take into account the gender difference in premiums.
According to the article, many women take up unpaid work to care for their families, and women are much more likely to remain outside the labour force.
BIGGER PROPORTION OF WOMEN EXPECTED TO BECOME SEVERELY DISABLED: AMY KHOR
Responding to Dr Neo, Ms Lim, and others who brought up the same point, Senior Minister of State for Health Amy Khor said that the ElderShield Review Committee had debated this topic extensively and that it was not an easy decision to make.
“While we have designed CareShield Life to be inclusive, it is equally important for the scheme to be equitable and sustainable. To that end, premiums must be actuarially sound,” she said.
Women live longer than men, and are therefore more likely to spend more years in severe disability, she explained.
To underline the need for differentiation, she said that last year, the average life expectancy at birth for women was 85.2 years, compared to 80.7 years for men.
Three in five healthy women at age 65 are expected to become severely disabled, compared to two in five healthy men at age 65, she said.
She also pointed to a longitudinal survey of older Singaporeans in 2009 and 2011 to 2012, in which researchers estimated women aged 60 are expected to spend 7.8 years requiring assistance with Activities of Daily Living (ADLs) compared to 2.6 years for men aged 60.
In order for a person to be defined as severely disabled and make a claim from CareShield Life, he or she has to be unable to perform at least three of the six ADLs independently. These are washing, dressing, feeding, using the toilet, moving around and the ability to transfer oneself from a bed to a chair.
The committee did consider that women have less savings on average, and the costs could therefore be better supported by the men, she added.
“However, on balance, the Committee decided that applying gender-differentiated premiums for CareShield Life would more accurately reflect the differences in risk between men and women, and result in a more sustainable scheme,” she said.
RELAX CRITERIA FOR CLAIMS, INCREASE PAYOUT
MPs also asked if the Government would consider reviewing the eligibility requirements for claimants.
MP for Hougang SMC Png Eng Huat said that the definition of severe disability has remained “untouched” over the past years during reviews of Eldershield, and is too “restrictive” when insured persons have to file a claim.
“Not being able to do one of the six ADLs is already a challenge for most of us in this House," he said, and emphasised his party’s call to review the ADLs test.
MP for Bukit Batok SMC Murali Pillai urged a more measured approach and questioned if the affordability of premiums and impact on government subsidies will be affected if claims are made easier.
He said he was concerned about the impact of lowering the threshold on the premiums.
"Would the premiums remain affordable? If not, how much more subsidy is expected from the Government?” he asked. The annual premium is expected to be S$206 for a man who turns 30 years old in 2020, and S$253 for a woman. These figures do not include subsidies.
Dr Lily Neo, Dr Lee Bee Wah and Mr Melvin Yong also asked whether S$600 per month, the proposed starting payout, will be enough, and if payout increases can continue for life even after a claim is made.
Mr Chee Hong Tat, who was Senior Minister of State for Health till April this year, addressed these suggestions and questions. The Committee discussed these ideas and carefully considered the trade-offs between further increasing the payout amount and lowering the claims criterion versus the need to keep premiums affordable in a universal insurance scheme, he said.
He illustrated how premiums would rise, should payouts be increased and the criteria relaxed.
“If we raise the payout amount from S$600 to S$800 per month, premiums for a 30-year-old male in 2020 could increase by about one-third,” he said.
He added that if additionally, the claims criterion is lowered from three ADLs to two, premiums will further increase by a third. As a result, the annual starting premium will be about 70 per cent higher than the currently proposed premium.
CALL FOR MORE TRANSPARENCY
MP for Pasir Ris-Punggol Zainal Sapari and MP for Nee Soon GRC Lee Bee Wah also asked for the actuarial considerations and premium impact, if the Government were to include those with pre-existing severe disabilities in the existing cohorts from CareShield Life.
Addressing their questions, Dr Khor said the proportion of Singaporeans who are severely disabled in old age is much higher.
“About 7 per cent of Singaporeans aged 65 and above today are severely disabled, compared to less than 0.1 per cent of Singaporeans aged between 30 and 40,” she said.
She cautioned that including the severely disabled from existing cohorts in CareShield Life would significantly increase premiums by about 30 per cent for the rest of policyholders in these cohorts.
WP MP Pritam Singh and Non-Constituency MP Leon Perera called for more transparency in the mechanism behind premiums.
“To arrest unnecessary speculation and misinformation about CareShield Life, the Government should commit to publish and be absolutely transparent about the actuarial principles and factors that drive premium hikes, including the investment returns on CareShield Life moving forward,” he said.
In acknowledging MPs’ views that CareShield Life is not easy for Singaporeans to understand, Health Minister Gan Kim Yong said that the Government will initiate more communications and engagement efforts.
Wrapping up the debate, he said: “We will work with community partners and stakeholders to reach out to Singaporeans. We will continue to explain the schemes to Singaporeans and how they can tap on them to support their long-term care needs.”