MEDISAVE CONTRIBUTIONS (Use for medical insurance)

Dr S. Vasoo asked the Acting Minister for Health whether he will reconsider allowing the use of Medisave contributions to purchase medical insurance covering hospitalisation benefits up to class B1 for a start.

The Acting Minister for Health (Mr Yeo Cheow Tong): Mr Deputy Speaker, Sir, the Medisave Scheme was introduced to avoid the pitfalls of a general medical insurance scheme. The experience of countries where a third party pays the hospital bill has been that it gives the consumer the delusion of free medical services. The result has been significant increases in the demand for such services.

Our B1, B2 and C class wards are already heavily subsidized and highly affordable. Those with low Medisave balances are also allowed to overdraw on their account when they use C or B2 wards.

My Ministry, therefore, does not propose to allow Medisave to be used to purchase general medical insurance.

I recognize, however, that the Medisave Scheme may not be sufficient to cover the cost of major or prolonged illnesses. My Ministry is finalizing discussions with the Council of Health Insurers on a catastrophic illness insurance scheme for certain major, high-cost medical conditions.