MEDISAVE ACCOUNT BALANCES OF DECEASED CPF MEMBERS

MEDISAVE ACCOUNT BALANCES OF DECEASED CPF MEMBERS: 9.

Mr Christopher de Souza asked the Minister for Health (a) if he can provide statistics on the balances remaining in the Medisave accounts of CPF members when they pass away; and (b) if further liberalisation of the Medisave scheme can be made if the statistics show that the average balance is large, such as using Medisave for payments for peripherals related to hospitalisation or serious illness.

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The Minister for Health: (

Mr Khaw Boon Wan: ): Sir, among the Singaporeans who passed away after the age of 65, their average Medisave balance was about $3,500. In fact, about 60% of all Singaporeans, and this is regardless of age, both young and old, had less than $2,500 in their Medisave Accounts at the time they passed away.

Looking at this data, my view is that generally we are not over-saving in Medisave. If anything, my concern is that most Singaporeans are under-saving for Medisave. We should therefore be careful not to allow Medisave to stray too far away from its original purpose, which is to ensure that Singaporeans have enough savings for their hospitalisation at the Class B2 or C level.

However, among the higher-income group, some have very healthy Medisave balances and are still working and contributing towards their Medisave. There is scope to allow such account holders to make larger withdrawals from their Medisave when they use the unsubsidised wards. I will announce the details soon.

Mr Christopher de Souza: (

Holland-Bukit Timah: ): In light of the reply, will the Minister consider allowing patients who are suffering from terminal illness to use this $3,500 average more liberally, for example, for payment for peripherals related to hospitalisation?

Secondly, on the Minister's point of under-saving, I think it needs to be appreciated that when a patient contributes $100 per month to Medisave, it would have taken him three years to save $3,500. So how can this be taken into consideration in liberalising its use amongst terminal patients?

Mr Khaw Boon Wan: Sir, for terminal illness, there is a wide range of illnesses and, therefore, the treatment requirements vary and the consequential funds

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that they need also vary. So we have to look at each case. But as a policy, we apply certain general rules. I have been liberalising, the last few months, the withdrawal quantums and, by and large, my sense is that the measures are adequate. On average, these patients, when they die, have about $3,000 in their account. You cannot drive it down to zero because we are talking about average here. If we drive it down to zero, then there will be many accounts which are below zero, that means, they run out while alive. We have to take that into account. But for patients whose hospitalisation was their last hospitalisation, I changed the rule last year to allow the whole bill to be paid off for those who died in hospital.

What is the Member's second question?

Mr Christopher de Souza: It relates to the first on the Minister's point about under-saving. If somebody had $100 per month contribution to Medisave, he would have to wait three years to accumulate $3,500. Therefore, does the Minister not think that that can be taken into consideration in liberalising Medisave for terminal illness patients?

Mr Khaw Boon Wan: For somebody who is contributing $100 per month, he must be earning a few thousand dollars. For such account holders, his Medisave account would have been quite sizeable, and I have been liberalising Medisave for this group of patients.

But your point is about such account holder who has a terminal illness. Are you saying he is under-saving or over-saving? I do not quite follow your point.

Mr Christopher de Souza: My point is that if it is $100 per month, you are well-to-do enough to contribute the $100 per month. Then, if you are contributing less than $100 per month, it would take you years to accumulate $3,500, which is the

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average. In that sense, it cannot be deemed as an under-saving. It should be further liberalised.

Mr Khaw Boon Wan: We have almost three million account holders of various demographics. It is hard to generalise. But, as I said, as a nation-wide policy, I can only set broad rules that cover the majority. Whether you are under-saving or over-saving, it also depends on your health conditions. You could be from the lower-income group, but if you stay healthy, and you hardly use hospital treatment, your account may be sufficient. Or, as you said, you could be contributing $100 a month but, let us say, bad luck, you have a lot of illnesses, you are depleting your Medisave account, then you will be under-saving. The critical point for Singaporeans is this: when you work, save in Medisave. And when you have Medisave, please buy MediShield both for yourself and for your family (children and spouses), and then for those who, despite Medisave and MediShield, still drop out of the safety net, we have Medifund. And in a couple of hours' time, you will hear the fourth pillar to our social security system.

The key is to make sure that every Singaporean gets into these social security pillars. That is the key. If you are not in, you decide to stay out, then I think that will be rough for the family.

Assoc. Prof. Kalyani K Mehta (Nominated Member): Mr Speaker, Sir, would the Minister consider the use of Medisave of the individual or a family member for respite care in a nursing home, for a short-term period, say, for example, the caregiver (the child) wants to take a holiday or take a break and the elderly person is in need of supervision in relation to medical care? Right now, as I understand, it is the policy to pay cash upfront for respite care and this is sometimes quite tough on the family caregivers.

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Mr Khaw Boon Wan: I reminded Members just now that Medisave was designed for a specific purpose and we should not forget that. Medisave cannot solve all medical problems. It is highly focused and for it to be effective, we should stay focused. We started it 22 years ago specifically to look after hospitalisation needs and that is why the contribution rates are designed that way. If, however, you want Medisave to be also used for other purposes, then, clearly, the contribution rate of 6% has to be raised to a higher level, which I do not think is advisable. I hope that answers the Member's question.