Medishield Life proposals do little to improve people’s lives

June 30, 2014
Singapore Democrats

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Singapore Democrats

The SDP reiterates our support for the Government’s move to increase its expenditure on the healthcare in Singapore. It is a step in the right direction and will ensure that Singaporeans receive the kind of healthcare that they deserve.$CUT$

However, the announcement that it will provide $0.8 billion per year in subsidies for the next five years is disappointing. Considering that our nation’s total healthcare expenditure tops $12 billion a year, the Government’s latest subsidy increase is a miniscule 6.5% increase.

Furthermore, we are concerned that these subsidies may not go directly to patient care but rather towards the Medishield Life provider which is already one of the world’s most profitable insurance companies based on its MLR (Medical Loss Ratio).

Given the needs of Singaporeans for adequate financial support for healthcare, one can only conclude that the initiative is significantly inadequate and will do little to help the average Singaporean in any meaningful manner.

In particular, we are concerned that the high deductibles will persist as these high costs have been shown in many studies to reduce access to essential care. Furthermore, the schemes are very hospital centric and will drive patients to our already overcrowded and over-stretched hospitals instead of channelling more resources to primary care.

While the CHAS scheme is a good start to supporting primary care, the caps and limitations in the number of conditions covered in addition to the huge amount of bureaucracy and paperwork involved limit the effectiveness of such a scheme in improving the overall health of Singaporeans.

In addition, the Ministry of Health has said that the premiums for Medishield Life, taken from the people’s Medisave accounts, will increase although this will be held constant for the first five years.

Such a statement is disturbing in two ways:

First, Medisave money is taken from the people’s CPF accounts. There is already little left in one’s CPF after the money is used for paying HDB loans. Taking even more money out to service Medishield Life premiums will mean greater hardship from Singaporeans when they retire.

Second, the Government says it will not increase premiums for five years. This is cold comfort to the people who have seen the GST rise from an early 3% to 4% to 5%, and then to the current 7%. Also, the Minimum Sum Scheme started by withholding $80,000 of an individual’s CPF savings but has, through the years, doubled to $155,000 presently.

Singaporeans must beware that this could be a sugar-coated poison that could cost them dearly in the years to come.

The recommendations made by the Medishield Life Review Committee (MLRC), which have been accepted by the Government, adds yet another layer to an already confusing system that continues to place the burden on the people without significantly making a dent in healthcare costs.

Currently, Medisave, Medishield and Medifund, or the 3Ms, together account for less than 10% of total health expenditure in Singapore.

Our proposal to make healthcare in Singapore universal, as spelt out in The SDP National Healthcare Plan: Caring for All Singaporeans, is the better alternative.

Under our plan, healthcare payment is made simple through a single-payer system – the National Health Investment Fund (NHIF). Under this plan, we scrap the 3Ms system and return the money to Singaporeans’ CPF accounts.

Singaporeans then pay a average of $400/year (compared to $1,600 we currently pay for Medisave) into the NHIF. The Government will make up the remainder of the total healthcare budget.

When we are hospitalised, we pay only 10% of the bill (capped at $2,000/year) while the NHIF pays the remaining 90%. Payments are limited to evidence-based healthcare as determined by experts in the field.

Read also The SDP healthcare plan made simple
                 Healthcare: A comparison between the SDP and PAP systems

Under the SDP proposal, the Government pays 70% of our total healthcare expenditure, a percentage which governments from other developed economies are paying.

At present, the PAP government pays only 30% and makes Singaporeans and their employers shoulder the main bulk of our healthcare expenses. This is wrong.

The SDP will present our alternative healthcare policy to the people at the next general elections and we look forward to their support.