Replies to questions on healthcare plan

May 11, 2012
Singapore Democrats

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Singapore Democrats

Below are replies from SDP’s Healthcare Advisory Panel to letters from members of the public about SDP’s National Healthcare Plan.

Dear Sirs,

Thanks for the effort made in proposing a National Healthcare Plan.

I realise I may be a little late to get on the train, but I see the potential to refine the qualifications for the subsidy categories somewhat.

Instead of qualifying people based on family income, I suggest using family income per capita, as a slight modification on some existing government policies (which use household income per capita). This encourages larger families (helps address TFR issues) and correctly reflects the burden of cost per capita, rather than making the assumption that family sizes are uniform (and hence ability to pay for healthcare is uniform).

Thank you.

D Yap

Dear Mr Yap,

Thank you for your suggestion with regard to stratifying premium based on family income per capita.

The OECD, IMF and World Bank now use equivalized rates for household incomes to compare incomes countries with different average household sizes.  The equivalized rate is a weighted mean used as a proxy for disposable income by allocating more weightage to the adults in a household.

Per capita household income is not used, because it underestimates disposable income, since most households have only 2 working adults and 1 or two minors.  The OECD uses the following formula to calculate equivalised household income:

Median Annual Total Household Income divided by Square root of mean household size

While family income is not directly equivalent to household income, we are applying the same weighted mean principle when we use total family income to determine the premium for the spouses in a family (including single-parent families) while halving this rate for minors.  In addition, children may have their premiums deducted from their Baby Bonus account, effectively halving again the contribution rate to $150 a year, which lessens the financial burden on the family considerably.

We agree that using per capita family income to calculate will result in bigger families falling into a lower payment category and reduce their premium burden, and may have a salutary effect in boosting the total fertility rate.  However, as mentioned above, using this calculus will tend to underestimate disposable income and reduce significantly the total annual premiums collected, making it difficult to fiscally sustain the National Healthcare Plan in the long term.

We did consider having third and subsequent children paying half the rate of their first- and second-born siblings, but some of us thought that this would result in too many categories.  The jury is still out on this, and if the feedback is that this is a good idea, we will include it in our final report.

Once again, we are grateful for your considered suggestion.  It is our ardent hope that all Singaporeans will benefit from this discussion of healthcare issues.

Dr Tan Lip Hong
for Healthcare Advisory Panel
Singapore Democratic Party

Dear SDP,

I have skim through your healthcare proposal and I have a suggestion to make. Pls pardon my ignorance if my suggestion is already included in the proposal.

When every child is born, there is an option to store their cord blood. It is not cheap to store their child’s cord blood in good cord blood banks (Fact-Netcord accredited banks seems to be good, only 1 exist in South East Asia). I hope you can consider including this in your healthcare proposal. Thank You.

A Struggling SGrean


Dear Struggling SGrean,

Many thanks for your thoughtful suggestion.

The Singapore Cord Blood Bank (SCBB), the only public cord blood bank here, currently does not charge donors for its services.  We will continue to offer this service free to all Singaporeans under the SDP healthcare proposal.  However, the SCBB operates under the principle of altruistic donation, and all donors have to relinquish ownership claims to the donated cord blood.

As for private cord blood storage, we do not intend to cover it under our plan for the time being.  This is because private cord blood bank services are still prohibitively expensive, and there is as yet no evidence these cord blood banks have helped any individual in Singapore.  Regenerative medicine and stem cell therapy are still at the research and clinical trials stage worldwide, and real benefits for society at large may not be realized until many years later.  Thus, despite all the promises and purported benefits of stem cell therapy, there are no still real therapeutic options available at present.

If and when stem cell therapy becomes reality, and the relevant regulatory hurdles and ethical issues are sorted out, we would certainly consider including private cord blood storage in our proposed national health plan.

Thank you once again for your interest in the SDP National Healthcare Plan.

Dr Leong Yan Hoi
for Healthcare Advisory Panel
Singapore Democratic Party

Read also:

SDP Healthcare Plan: Scrap Medisave and increase govt spending
Healthcare: A comparison between the PAP and SDP systems
Executive Summary of SDP’s National healthcare Plan