SINGAPORE - Is medishield life the best way ahead for Singapore health care?
This is the fourth of 12 primers on various current affairs issues published in the run-up to The Straits Times-Ministry of Education National Current Affairs Quiz.
MediShield, the current national health insurance scheme, stops covering people when they turn 90.
That means more than 10,000 people aged 90 and older have no medical insurance, even though the older you are, the more health care you need.
Coupled with the fact that Singaporeans are living longer, the Government will end up supporting a rising number of elderly folk who have run out of money to pay for their health-care costs.
Some countries do just that, but the rising burden eats heavily into government expenditure and that usually results in higher taxes for the working population.
Singapore has decided to go a different route with MediShield Life, which will be launched next year. It will cover everyone, even those with pre-existing diseases, for the rest of their lives.
By doing this, the burden is shared among society as a whole as well as the individual patient.
The Government provides heavy hospital subsidies, society pays the bulk of the remaining bill through insurance premiums while the individual patient is responsible for the deductible and co-payment.
The deductible is the initial amount of a bill the patient has to pay before insurance kicks in. Under the basic MediShield plan, patients also have to pay a portion of the bill - currently between 10 and 20 per cent - beyond the deductible.
How is having compulsory insurance for all different from levying heavier taxes to pay for health care? With taxes, only the working population and richer individuals pay. With insurance, everyone contributes.
The Government uses taxes to provide subsidies that cover as much as 80 per cent of a hospital bill, after which the bulk of the remaining cost is spread among the population. This is very much like the goods and services tax which each person pays when he buys something, rather than income tax which is paid according to how much a person earns.