CENTRAL PROVIDENT FUND (AMENDMENT) BILL

Debate resumed.

Dr Aline K. Wong (Tampines GRC): Mr Deputy Speaker, Sir, the GPC has been fully informed of the details of MediShield. We support it and wish it every success.

We find the premiums to be low and reasonable. The scheme is going to be run at cost and it covers the major kinds of catastrophic illnesses, ie, heart disease, strokes, kidney failure and cancer.

We also endorse the universal coverage feature of the scheme with an opting-out provision. The universal coverage is necessary in order to protect the low income groups. Personally, I would have preferred the scheme to be a compulsory one, except for people who have had adequate alternative coverage. As it stands now, the opting-out is very simple. People simply fill in the form and just send it back to the Ministry and he would be taken off the scheme. Of course, on the other hand, if we allow opting-out only for people with alternative coverage, this would bring quite a lot of administrative work to the Ministry. For one thing, for example, you have to keep track of what kinds of alternative coverage people have, approve them, and also make sure that people stay on them. And I think this would give the Ministry more work. Anyway I am glad at least that the initial response to the scheme has been very encouraging, which means that lots of people who should be covered are already covered. It is about 87%.

The major weakness I see in the scheme, but which the Minister has already pointed out, is that it covers people only up to the age of 65. There has been quite a bit of feedback to the GPC from the senior citizens, some of whom express their views quite strongly. They feel that the society does not appreciate their past contributions by not recognising their needs. After retirement, they are now left out of MediShield.

We are glad to hear from the Minister that the Ministry will closely monitor the working of the scheme so that he would consider extending the coverage to beyond age 65 at the earliest opportunity. I do not know whether he would be able to give us any indication now on how many years the scheme would run before he will consider it sufficient time to take a decision on the matter. I think the people should not be asked to wait indefinitely.

The third point I want to make is that MediShield can be extended to cover the dependent members of the family. Every effort must be made by the Ministry to publicise the scheme and let people think about extending the coverage to their dependants. At present, if you want to opt in, there is no need to go through a medical examination. The question may arise in future when the Ministry may want to impose a medical examination. What will be the period after which every new member who wants to join, or opt in, will have to go through this medical examination? This will be an important consideration for people who want to opt in their dependants. Some of them might be young and healthy now, but later on they might want to include them.

Fourthly, the Minister said it very clearly and correctly that the public must not choose the class of wards indiscriminately, that is, irrespective of the ability to pay, even though MediShie1d now enables them to enjoy additional coverage for catastrophic illness. The MediShield scheme has a deductible as well as a co-insurance element. This is to prevent people from over-using or abusing medical services and prevent people from over-demanding services that will in the end inflate medical costs. But I hope the Minister would realise also that the general public, especially the lower educated ones, are not so well-versed with all these terms (deductible, co-insurance, co-payment) and many people have not taken out any insurance scheme before. They have no experience in these things and they may still be under the illusion that MediShield will pay for everything.

The deductible of $600 per year for class C ward patients may seem fair at this moment, but there may still be patients who could not afford to cough up this $600 deductible, even though in the case of catastrophic illness $600 is actually not a very huge amount, considering the length of stay and the cost of treatment. So I hope the Minister could still assure the population that if they cannot afford to come up with this $600 deductible, there are still ways for them to apply for waivers.

Finally, MediShield does not cover some forms of catastrophic illness, such as haemophilia or thalassaemia major. The plight and the financial burdens of these patients, no doubt the number is quite small, are enormous, and they should receive some special assistance from the Government. Recently, because of the risk of Aids, the price for manufacturing blood products has shot up tremendously and so the cost of treatment to this kind of patients who need blood transfusions regularly has gone up very sharply. No doubt, no insurance scheme is likely to cover congenital anomalies, just as MediShield does not. Still, we should try every means to help this small number of patients to cope with the financial burden of treating this kind of diseases.

So with this, I would like to thank the Ministry for coming up with this scheme. We wish it every success.

Dr Lee Siew-Choh: Mr Deputy Speaker, Sir, the MediShield Insurance Scheme had initially met with a very favourable public response when it was first announced. And as already pointed out by Dr Wong, the advantage of the scheme is that those who are included in the scheme do not have to go for a medical examination first. But as some of the details of how the scheme actually operates are made known, the favourable response has also given rise to a lot of disappointment and disillusionment. The reason is not far to seek. A closer study of the scheme quickly reveals that many aspects of the scheme are not so advantageous to the insured person after all.

Firstly, though low, compared to private schemes of a similar nature, the premiums are not truly low-cost when we bear in mind the poor insurance cover provided by the Schedule of benefits. For those who draw decent salaries and wages and are reasonably well-off, the premiums are of course not high. But for those who earn low wages, have families and live almost from hand to mouth, paying the premiums may cause further hardships. This is especially so for those who are 50 years of age and above and have to pay premiums of $60 and $96 annually. These are the very people who most need Government help. For them the premiums should therefore be cut by half at least.

Secondly, the claims on MediShield have comparatively low "maximum claimable amounts". This means that claims can amount to only a small fraction of the hospital fees that have to be paid by the patient. For example, intensive care unit claims are limited to $140 per day when hospital charges could amount to $300 and $350 per day. Again, for example, outpatient kidney dialysis claims are limited to $50 per day when the Singa- pore General Hospital charges are $150 per day, and only $600 per month, when SGH charges would amount to $1,800 per month. Surely, the ceiling for "maximum claimable amounts" could be raised higher to help those stricken with catastrophic illnesses.

Thirdly, there is the novel, as already mentioned, "deductible" item, payable once in any one year, of $1,000 for class B wards and above, and $600 for class C wards, which the patient has to pay before claims can ever be made. Only those on chemotherapy and radiotherapy, and outpatient dialyses do not have to pay these "deductibles" of $1,000 and $600. If the period of stay should be short, and the hospital charges amount to less than the "deductible" amount, it means that the insured sick will not be able to make any claim whatsoever from MediShield.

What then is the point of the MediShield insurance? In order to allow MediShield to run away from its responsibility to pay the insured person what should be paid to him when he falls ill? The deductible sum in fact should be scrapped. But if it has to be provided for, it should be substantially reduced to help reduce the amount in the hospital bill which the insured pays, though the amount for some people is only a Medisave paper transfer.

Fourthly, we have "co-insurance", already mentioned also, of 20% to be paid by the patient. MediShield pays only 80% of the claimable sum after the patient has paid the "deductible".

So with all the road-blocks imposed by the "maximum claimable amounts", the "deductible" and the "co-insurance", what benefits does the insured person finally get? The Government pamphlet says he can claim up to $15,000 a year and $50,000 for a lifetime. This is like "sketching cakes to assuage hunger". The Chinese call it Hua bing chong ji ( ). But in actual practice, how much does a patient pay from his own pocket, and how much does MediShield pay for him, when he is presented with a hospital bill? That is what really counts.

Let us take the three examples quoted in the CPF booklet: Your Guide to MediShield. For those in class A wards, for first admission, the total hospital bill for a 19-day stay is $8,791. But for the first admission, the insured person, using Medisave or cash, pays $8,127, that is, 92% of the total hospital bill. For a second admission, he pays $4,431 out of $5,727, that is still 77% of the total hospital bill. Such an insurance cover is like no insurance cover at all. Perhaps Government could say that those who are treated in class A wards are those who can afford to pay, and therefore should be made to pay for the full cost of hospital treatment. There may be some logic in that.

But for those in the B2 wards, the total hospital bill for a 19-day stay is $1,373. For the first admission, the patient pays $1,074, that is, 80%. He pays $244 out of $1,223, that is, 20% only for the second admission. B2 wards are in fact, as we all know, upgraded class C wards. There is no reason why MediShield should make a B2 ward patient pay such a high percentage of his hospital bill. For those in class C wards, for the first admission, the total hospital bill for a 19-day stay is $756. The patient pays $631, that is, 83% of the bill. Only for a second admission does he pay $132 out of $661, that is, 20%. Here again there is hardly any real insurance cover to speak of. There is no reason why he should be made to pay such a high percentage of the hospital bill. If the hospital bill does not exceed the deductible amount of $600 and $1,000, as the case may be, the insured person will not be able to make any claim whatsoever. He will have to foot the whole bill all by himself. He can make a claim only on the amount in excess of the deductible amount.

Thus, in spite of MediShield insurance, a person stricken with a catastrophic illness finds that he will have to pay either the whole or the greater part of the hospital bill out of his own pocket through Medisave or by cash. He gets very little benefit from the medical insurance even when he most needs help from Government. So we must ask: what sort of MediShield insurance is this that the insured person has to pay such a high percentage of the hospital bill? Does MediShield really insure the people against serious illness?

It would appear that MediShield's first responsibility is not to the insured person, but to MediShield itself, to ensure that it will not involve the Government in any extra financial expenditure. Moreover, MediShield covers only people who are below 65 years of age, as already been touched on. It does not cover those who are above the age of 65, the very people who are most likely to be stricken with catastrophic illnesses. It operates just like private commercial insurance companies. It operates with the object of sure profit and no loss. Yet, it provides less benefits than private commercial hospital and surgical schemes.

I have a scheme given to me where a person who has to insure himself pays only $70 per year and he gets the full cover for all hospital charges in B2, whatever the amount that is charged. He does not have to pay a single cent. But Government MediShield does not have to operate like a commercial business undertaking. Government has a responsibility to look after the aged and the sick. Therefore, it should ensure that MediShield is a truly low cost medical insurance for the aged, that it truly accepts full responsibility in the care and treatment of those stricken with serious illnesses.

The concept of MediShield is very good. Insurance against catastrophic illnesses is especially necessary when people nowadays normally live to well past 70. When medical services have been made more and more expensive by frequent Government increases in fees and charges, now compounded by so-called restructuring of hospitals, and when most people have only small sums in their Medisave accounts, a government that claims to be a good caring government should live up to its duty and responsibility to look after the welfare of the people and especially of the sick and the aged. But it would appear that the PAP Government believes in passing the buck to the people themselves, in making the sick and aged look after themselves, first, through Medisave and now through MediShield and in making the people pay more and more. All this must be changed.

Catastrophic illnesses are infrequent - I understand, that they represent at the very most, 1% of the total population - but those who are stricken with such illnesses, together with their families, especially those in the middle and the lower income groups, will need all the assistance the Government can offer. The present Bill deserves wide support, but the regulations which the Minister may make, especially as regard to age limit, the rates of premiums payable, the conditions under which an insured person is entitled to claim benefits payable, and the actual benefits themselves, must be truly responsive to the needs, hopes and aspirations of the people. We have the funds and the means to care for our sick and aged in a fitting manner. The PAP also speaks of hopes to bring about a gracious society of distinction. The present MediShield scheme as announced should therefore be suitably revised to provide genuine help to those in need. In summary, let me therefore suggest the following:

(1) The age limit for MediShield should be extended from 65 to 70 or even 75. The aged are after all the very people who need MediShield cover.

(2) The categories of serious pre-existing diseases listed on page 5, item 2, of the MediShield booklet, namely, cancer, ischaemic heart disease and so on, only a few of the serious diseases, should not be outside, but inside, the scope of coverage of this scheme. Many people feel that the patients who suffer from these illnesses do need Government MediShield cover under all circumstances even if they should have incurred these illnesses during the 12 months before the commencement of MediShield cover.

(3) The rates of premiums payable should be lowered for those who earn low wages.

(4) The maximum claimable amount should be considerably raised. In addition, the deductibles and co-insurance should be done away with altogether, so that all claims may be suitably and reasonably raised to help those who are in need to pay their hospital bills. Nobody wants to get sick. And to say that deductibles and co-insurance are meant to prevent over-usage is all nonsense.

(5) Government should stop raising fees and charges for medical services periodically in order to ensure that medical services are truly affordable - the Minister likes the word "affordable" - for the people. And I would support the Bill full-heartedly if the present scheme already in operation should be revised suitably, if not immediately, then in the very near future.

Mr Yeo Cheow Tong: Mr Deputy Speaker, Sir, I will first address the serious points raised by Dr Aline Wong before I address the distorted interpretations of Dr Lee Siew-Choh.

Dr Aline Wong had asked how many years would we wait before extending the age limit. We will monitor the data for the first two years and see whether the usage rate is predictable. And if we can make a decision at that time, we will then do it. Otherwise we may have to wait another year or two.

With regard to coverage for dependants, in the information materials given out by the CPF Board on MediShield, the coverage of dependants was highlighted, including a form for the account holder to fill in the dependants' data. I believe most account holders are aware of that avenue but we will still continue to publicise that and hope that more will opt in their dependants.

With regard to opting in, in order to keep the scheme low cost and simple, we do not intend to impose a medical examination because the cost of the examination alone may be equivalent to two, three or maybe even four years' worth of premiums. What we would do would be to impose a 2-month grace period before MediShield is activated for that particular individual. MediShield also has the right to inspect the medical records of that patient so that if the administrators find out that actually the treatment is for a disease which was already existing prior to that person opting in, then he will not be covered. We believe in keeping it administratively simple and as low cost to administer as possible.

With regard to her fourth point that the deductible and co-payment may be too high for certain categories of people and that they may not be able to afford them, for that group of people they can still ask for waivers from the hospitals and they would be reviewed on a case by case basis.

For congenital diseases, whilst insurance companies and insurance schemes do not cover congenital diseases, we have been doing our best to assist those cases on a case by case basis and we will continue to do so.

With regard to Dr Lee Siew-Choh's point, Dr Lee does not seem to be able to differentiate between a general medical insurance scheme and a scheme that caters for catastrophic illnesses. A general medical insurance scheme would start payment from the first dollar that is incurred but, of course, those schemes are also extremely expensive. The MediShield scheme starts from a dollar a month which is $12 a year for those up to the age of 30. A general medical insurance scheme would probably require a premium of at least $150-$200 for such a person. So we are talking of entirely different scales of premiums. He wants it cheap. He wants it to cover everything. MediShield is run at cost. It has to cater for that particular group of people, ie, the group of people who are suffering from catastrophic illnesses. And because we are catering for those suffering from catastrophic illnesses, it is important to have the deductible so that the scheme is not paying from the first dollar. Because if the scheme is paying from the first dollar, then the premium cannot be kept at the present low level.

He has compared the premium with another scheme run by the private sector. I am not too sure where he is quoting from. But based on the surveys carried out by my Ministry and the CPF Board, we have found out that the premiums from MediShield are between half and a third of comparable premiums imposed by the private insurance companies. Of course, they offer a little bit more. But then if we triple our premium, I think we can offer a lot more than what the private insurance companies are offering. The point is we are trying to ensure that we are keeping the premium as low as possible so that the lower income group can afford it.

The deductible is equivalent to about 15 days' stay. That means a patient who goes in for, say, 17 days' stay, must cover the first 15 days on his own and MediShield would start from approximately the 16th day onwards. Therefore, for the first hospitalisation which he has quoted from the MediShield pamphlet, of course, the quantum paid by the patient must be high. But as he has also shown, for the subsequent hospitalisations, once it exceeds the deductible amount, he pays only 20% which is the aim of the scheme. This is to alleviate the burden faced by those who require prolonged hospitalisation.

He has also quoted the case of a A class patient where for the first period of stay he pays 92% of the bill and for subsequent stays he pays 77%. Sir, that is intentional, because our reimbursements are pegged to the C and B2 classes. So those who pay low premiums and go to the higher classes of wards cannot expect the lower income group to subsidize them for their stay in A class. Therefore, we have also recomputed their bill to the equivalent of B2 bill, and that is why they end up paying a lot more since they have chosen to go to a higher class ward.

He has given us some suggestions, one of which I have already covered, and that is the extension of the age limit. He has also asked for existing illnesses to be covered under the scheme. Sir, if we do that, there is no reason for anybody to want to be insured. Insurance means you share the risk well before you are struck by a disease. If everybody can opt in and be covered for a disease or an illness which they already have discovered, then we will only be covering those who are sick and that is no longer an insurance system. So what he is talking about is totally impossible to be implemented because it is just not a very logical suggestion.

He has asked for the rates to be lowered. Sir, MediShield is being operated at cost. We will try to maintain the premium as low and for as long as possible. If we find that the premiums for certain age groups have been over-estimated, there are mechanisms for the premiums to be lowered in the future.

His next point is about raising the claimable amounts. Sir, the claimable amounts are more than adequate for the B2 rates. He has talked about the ICU rate of $350. Yes, that is for a person who has gone to a B1 or A class ward. But for a B2 patient the $140 a day is more than adequate to cover his stay in the ICU.

Sir, he has also managed to jump on to his favourite hobby-horse, which is to tie the issue of medical fees to MediShield and that he will support it if we stop raising medical fees. Sir, that topic has been debated many times before by Dr Lee, but I want to take this opportunity to reply to him again. Sir, Singaporeans generally want a high level of service. Service has to be provided by people. Service does not just appear from thin air. This means we have to pay for our staff. For those who can afford it, the policy is that they pay for what they demand and for what they receive. So A and B1 patients should pay full costs. For those in the lower income group who require assistance, they go into the B2 or C class wards. They pay a very small percentage because our subsidies are very, very high.

As wages increase, the institutions must meet their expenses in two ways. One is in terms of improving efficiency, and secondly, through recovery of costs. For patients in the B2 and C class wards, that recovery of cost is partly met by increased subsidies from the Government. But the remaining portion must be recovered from the patients through fee increases. By adjusting the fees regularly, we will be able to keep these increases to a much smaller level than the recent one. In terms of medical fees, the choice is up to the patient. If you want better service, we need to employ more people, the right calibre of people, and we must pay them, which means costs must go up. The restructured and Government hospitals will eventually offer different level of service. Their manpower establishment will vary from hospital to hospital. Certain hospitals may be able to get by with lesser people, their service may not be as good but it is likely that their fees would also be lower. At the end of the day, Singaporeans will have a choice of not just the different classes of wards but the different hospitals which may provide different levels of services.

Dr Lee Siew-Choh: Sir, I have no quarrel with the charges for A class. I merely use that as an example to show that the claimable amount is very small. But I think the Government must make clear the distinction between a catastrophic illness and a patient who stays in a hospital for some time. He keeps on stressing how long a person stays. But a catastrophic illness is something which occurs suddenly and it disables that man to a great extent and these are the cases where we hope the Government will be able to help. But apparently the Minister does not seem to think that way. It is very important that we must realise that whether it is B2 or C class, Government must help to make sure that those people who are stricken with such illnesses are given every facility to improve and get on.

He also said that it is impossible to implement some of the suggestions I made. Sir, it is never impossible. I think we have seen enough of TV advertisements about "Impossible, impossible". But we must realise that it is all a matter of priorities. If the Minister wants to spend money on "Swing Singapore" or on some other things, of course, the money is not there. If he wants to spend all the money on defence and armaments when everybody is cutting down their defence expenditure, of course, the money is not there. But there is plenty of money in our kitty. Why does he not make use of it to help the people instead? He is not doing that. Therefore, the choice is not so much with the patient but with the Government. It is the Government that forces the choice on those people who go to hospital. When they have no money they cannot help but ask for Class C. But when there is no Class C they cannot help but opt for Class B. That is all there is to it. So let us be clear about it.

Mr Yeo Cheow Tong: Sir, Dr Lee Siew-Choh does not seem to be able to face realities. Yes, catastrophic illnesses strike a person without warning, just like any other illness, and that is why it is important for all Singaporeans, firstly, to participate in MediShield in case such an eventuality occurs. Secondly, we have been spending a lot of money on health education to tell Singaporeans that they have to keep themselves fit, healthy and try not to fall ill. For those patients who do fall ill and they require help, yes, help is available. Those who can afford it and do not require help, there is no reason why Government should subsidize them. But for patients who require financial help and they go into the B2 and C Class wards, Sir, the help is plentiful. The subsidies for Class C exceed 80%. For those who suffer from a serious illness and who require operation, in the higher tables of operation, there is a cap imposed so that they do not pay more than a certain amount, no matter how serious an operation they require. So the help is available, including complete fee waivers. We do not want to end up as a welfare state. That is fast going out of fashion, but Dr Lee apparently does not seem to appreciate it.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Yeo Cheow Tong].

Bill considered in Committee.

[Mr Deputy Speaker (Mr Lim Boon Heng) in the Chair]

Clause 1 -

Amendment made:

In page 1, line 4, after "shall", to insert "be deemed to have". - [Mr Yeo Cheow Tong].

Clause 1, as amended, ordered to stand part of the Bill.

Clauses 2 and 3 ordered to stand part of the Bill.

Bill reported with an amendment; read a Third time and passed.