TRIPARTITE COMMITTEE ON PORTABLE MEDICAL BENEFITS (Progress report)

Mr Yeo Guat Kwang asked the Minister for Manpower if he will give a progress report on the Tripartite Committee on Portable Medical Benefits.

The Minister of State for Manpower (Encik Othman bin Haron Eusofe) (for the Minister for Manpower): Sir, the Tripartite Committee on Portable Medical Benefits has reached a consensus on three key principles to form the basis of the portable medical benefits scheme. Firstly, the new medical benefits scheme should ensure continuity of medical coverage. Employees should be allowed to accumulate unused medical benefits for future needs, for example, when they change employment or when they retire. Secondly, the proposed scheme would incorporate co-payment and deductible elements to encourage individuals to take greater responsibility for their healthcare. Thirdly, it should ensure affordability of basic healthcare for the employees. The scheme should also not undermine employers' cost competitiveness.

The Tripartite Committee is currently examining an appropriate framework for the portable medical benefits scheme. Under this framework, the current employer-provided inpatient medical benefits scheme could be restructured to incorporate new features. Employers would make an appropriate additional monthly contribution to their employees' Medisave accounts. The amount should be adequate to meet the premium for a basic medical insurance, for example, MediShield Basic. Employees could also use any balance of the additional Medisave contributions to purchase an enhanced level of medical coverage according to their own needs, purchase medical coverage for their dependants, or save for their future needs. This is a key advantage of the proposed scheme over the existing system.

As for outpatient medical benefits, the Committee is exploring a scheme which is modelled on the Civil Service's Outpatients Scheme. Under this scheme, employees would co-pay a small portion of their outpatient bills. Employers would set aside an annual lump sum per employee to be drawn down for the employers' portion of the employees' outpatient bill. Any unused portion of the employers' annual lump sum would be credited into the employees' Medisave account. The advantages of the proposed outpatient medical benefits scheme are:

(a) it encourages the responsible use of outpatient benefits and allows employees to save their unused medical provision for future medical needs; and

(b) the cost of providing outpatient medical benefits would be more predictable for companies.

The Committee is studying the amount that employers could set aside as the annual lump sum to cover the employers' portion of outpatient expenses. It is also studying tax measures that could be introduced to facilitate the early adoption of the portable medical benefits scheme by employers. The Committee had received feedback on the MediShield Scheme, particularly its co-payment and deductible elements and this would be discussed by the Committee in consultation with the Ministry of Health.

The issue of converting the existing employer-provided medical benefits scheme to a portable medical benefits scheme is a complex one. While there is agreement on a framework of the portable medical benefits scheme, the SNEF and NTUC representatives have asked for more time to study the proposed scheme and how to introduce it to existing employees. They need more time to consult their members. Their views and feedback would be carefully considered by the Committee. The Committee expects to complete its study and submit its recommendations to the Government in a few months' time.

Mr Thomas Thomas (Nominated Member): Sir, would the Committee be looking at the issue of older workers who actually need this medical payment and do not have the resources to accumulate for future use? They need it now. In portability, how would he intend to handle this issue?

Encik Othman bin Haron Eusofe: Sir, the Committee will study all the issues connected with the portable medical benefits scheme. In fact, one of the concerns is that older employees, particularly if they have to change jobs and they go to a new company when they have not accumulated their medical benefits under the current scheme, which is employer-specific, they would have problems about their medical needs, especially when it is the time where employees change jobs more often because of the restructuring of the economy. The issue of older employees and how their medical benefits can be taken care of is one of the concerns which we are also tackling.

Mr Hawazi Daipi (Sembawang): Sir, I would like to ask what is the general reaction of employers towards this idea of portable medical benefits scheme.

Encik Othman bin Haron Eusofe: Actually, the employers are concerned about the cost impact of the new scheme. That is why we are also looking at the tax aspects. They are also concerned that if there are too many schemes in the company, one for new employees and another for existing employees, there would be problems in administering them. They are concerned how the new scheme will be implemented and therefore they need more time to study it.