MEDISHIELD

MEDISHIELD:

(Number of lapsed cases): 1.

Mr Terry Lee asked the Minister for Health (a) over the last three years, what is the trend of MediShield cases which have lapsed because an individual had insufficient Medisave or exhausted his Medisave; (b) what is the forecast of the number of MediShield cases which may lapse in 2010; (c) whether his Ministry has plans to prevent such lapsed cases and; (d) whether he will consider offering retirees some alternative form of basic medical coverage.

The Minister for Health (Mr Khaw Boon Wan): Last year, less than 1% of MediShield policies lapsed due to insufficient Medisave savings. As it will not be in the interest of the policyholders to allow their MediShield to lapse, MOH and CPF Board go to some length to help the policyholders avoid such an outcome and to restore their MediShield coverage, if possible.

First, CPF members will receive prior alerts and get up to three notification letters at various intervals. Second, we give members a two-month grace period to top up their Medisave to enjoy uninterrupted MediShield coverage. Third, we include a reminder in the members’ annual CPF statements. Fourth, we exercise some flexibility to allow members whose MediShield policies have lapsed to be covered under MediShield again, provided their health status has not changed and they start making regular contributions to Medisave. And many have indeed rejoined MediShield under such an arrangement.

Sir, as I stressed yesterday, Singaporeans should stay within MediShield and must not allow their coverage to lapse or they will regret it in future. For those who have exhausted their Medisave, their working family members should help them pay their MediShield premiums. Their Medisave can be used for this purpose.

Mr Terry Lee (Nominated Member): Sir, supplementary question. Would the Minister consider helping policyholders who are 65 years and above with discounted premiums?

Mr Khaw Boon Wan: Sir, in formulating our insurance policy – and MediShield included – we have tried to avoid inter-generational cross subsidy. It does not work in the long term, meaning the young subsidises the old, because we know the population pyramid will change with age. When the pyramid is fat at the bottom, it is easy because there are many young people to support the old. But at some stage, the pyramid becomes more like a diamond which is what countries in the West are facing today. They introduced such policies 50 years ago – which then sounded very gentle and rational – but they are now finding great difficulty in continuing. What we have done instead is to encourage early subscription and then, allow discounts for loyalty, ie, under a loyalty programme. So the longer you stay, you get greater discounts below what your age group premium ought to be actuarially. I think that is the correct way, going forward.

Assoc. Prof. Paulin Tay Straughan (Nominated Member): Thank you, Mr Speaker. I have two supplementary questions for Minister. The first concerns older Singaporeans. I am wondering if MediShield is sufficient for chronic ailments. This is the group that is caught in the gap because they are very likely not to be covered by private insurance. What plans does Minister have to augment their healthcare bills? My second supplementary question addresses the middle-aged group, people whom we are now encouraging to go for early health screening so that we can detect ailments at an earlier stage. And yet, contradictory to that, once you have a pre-existing illness, private insurers fail to cover you. So it seems we are sending a lot of people into the lion's den and then they will be without coverage for a long period of time. May I have the Minister's comments?

Mr Khaw Boon Wan: Sir, we have designed MediShield to look after acute hospitalisation, treatments that are generally provided in acute hospitals. The MediShield coverage, premiums and payouts accommodate all the age groups. It is quite robust. It does not mean that if you are elderly, your MediShield may run out or prove inadequate, that is not the case. You have heard in the Prime Minister's National Day Rally speech over the weekend about step-down healthcare, outside of acute hospitals. This is a new and growing area as our population ages. We think that their needs can be adequately taken care of outside of acute hospitals – in fact it would be cheaper for the patients and their families as well. This refers to healthcare in nursing homes, and also community hospitals which the Prime Minister spoke about at great length.

Currently, MediShield covers community hospitals. We are now studying how we can also fund long-term care outside of acute and community hospitals, and that includes home nursing as well. So this is a new topic that my Ministry is placing great emphasis on and something that we can continue to discuss over the next few months. I am sure it will be an area of attention in next year's Budget Debate for the Ministry for Health.

The Member also asked about middle-aged patients who, after screening, discover something that private insurance may not pay for. It does not work that way because if it does, it would completely discourage medical screening. Who will then go for medical screening, in order to have ailments picked up and then be excluded from insurance coverage? But what insurance does – logically and globally – is to exclude pre-existing illnesses. In other words, if you already had something which was there for many years before you subscribed to your insurance policy, the insurers would then exclude that. Those are exceptions rather than the norm. For most people, so long as you subscribe early to MediShield, the insurance will have to cover the illnesses that crop up, eg, cancer, that you get because of ageing. The insurance will have to cover these, whether it is MediShield run by CPF Board or Integrated Shields run by private insurers. I explained yesterday the reason why insurers have to exclude pre-existing illnesses. If everybody waited until they fell ill to subscribe to insurance policies, it would be unfair to those of us who have been subscribing for years.

Dr Lam Pin Min (Ang Mo Kio): I would like to ask the Minister this. Currently, the Medisave maximum allowable usage for acute hospitalisation is $450 for daily hospital charges. And for community hospitals, it is just $150 per day. This disparity may have encouraged patients to stay put in the acute hospitals rather than transfer to community hospitals. Will the Ministry review this criterion to encourage more elderly sick or those with chronic diseases to transfer to community hospitals instead?

Mr Khaw Boon Wan: As part of the review on community hospital care, we are looking at how to fund this and ensure right-siting so that we do not have an incentive system that is warped, that ends up with patients going to a more expensive place because of the funding structure. We would certainly review how we subvent community hospitals, what is the withdrawal limit out of Medisave and also what is the insurance coverage. We will take a look at whether $150 daily limit is adequate. We had set a differential claim limit because the cost of care is indeed lower, and so the claim limit is lower (than for acute hospital). If we set it too high, it may encourage providers to over price, knowing that the bill will be paid out of Medisave. I am not saying that our community hospitals do that. Many of them are run by religious charities and they do not do such things. But then again, things may happen in an unpredictable way and we need to guard against that.

Mdm Halimah Yacob (Jurong): I would like to ask the Minister whether his Ministry can consider extending MediShield coverage to people suffering from mental illnesses because the cost of treating mental illnesses has increased for families and individuals. Such coverage would indeed be necessary.

Mr Khaw Boon Wan: I am sympathetic towards insurance, not just MediShield, covering mental illnesses. Today, the private MediShield schemes – some of them – do make that provision. Of course, you would have to pay higher premiums. I am holding back purely because we would need more money in order to cover this new benefit which requires more payout. And this is not the time to talk about increasing premiums.

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