PREMIUM PAYMENT FOR MEDISHIELD PLAN (Assistance to the lower income group)

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PREMIUM PAYMENT FOR MEDISHIELD PLAN:

(Assistance to the lower income group): 10.

Mdm Ho Geok Choo asked the Minister for Health following the amendment to section 13(1)(b) of the Central Provident Fund Act, (a) what kind of assistance will be rendered to Singaporeans who are financially inadequate such as the aged, the unemployed and the retrenched in the lower income group such that they can continue to pay for their premiums for the MediShield Plan; and (b) if he will clarify the rationale for the limit of $660 per person on the withdrawal from Medisave account for the annual premium payment for the MediShield Plan.

Mr Khaw Boon Wan: Mdm Ho Geok Choo wanted to know how needy Singaporeans could be assisted to remain covered by MediShield. As Members are aware, the MediShield was reformed last month so as to enhance its effectiveness as a catastrophic illness insurance plan.

But let me first clarify that the amendment to section 13(1)(b) of the Central Provident Fund Act is not directly related to the MediShield reform. The amendment is merely to regularise an existing administrative practice whereby Singaporeans can withdraw their Medisave savings for medical treatments and approved insurance premiums, without having to first set aside the Medisave Minimum Sum.

As for the reformed MediShield, almost all Singaporeans who work would have enough Medisave to pay for the premiums.

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For those who are not working, either permanently or temporarily, many can rely on their past Medisave savings. Some 150,000 Singaporeans are able to rely on their family members' Medisave savings to pay for their MediShield premiums. They form about 10% of all MediShield policyholders.

In addition, from time to time, when the budget position allows it, the Government will top up Singaporeans' Medisave accounts. Just last month, the Government transferred some $320 million into Singaporeans' Medisave accounts. This will help Singaporeans pay their MediShield premiums. The largest top-ups, at $350 per account, went to Singaporeans above the age of 60.

For the minority without adequate Medisave savings or family support, the additional safety net is the Medifund. We have, over the years, built up the principal sum to $1.1 billion. We will increase it to $2 billion eventually.

Mdm Ho also asked about the rationale for setting the Medisave withdrawal limit at $660 for the annual MediShield premiums. This limit was set in 1995 and has been sufficient to cover the annual premiums for the basic MediShield package. Currently, the highest premium rate is $510 per year which is well within the Medisave withdrawal limit.

The Medisave withdrawal limit, of course, is not permanent and will have to be raised if and when prevailing premiums exceed it. As I indicated in this House last month, my Ministry is reviewing the MediShield age cap. If we decide to raise it beyond 80, the premiums for the new age band may well exceed the current Medisave withdrawal limit. And, if so, it will be raised at the same time.