MediShield Life review: Premium increase much lower than feared

Given the significant increase in benefits, there were fears that premiums would rise so much that they would not be affordable to many. But the biggest rise in premiums before any subsidies kick in will be $355 a year for those aged between 75 and 77 years. This will see the premiums of this group go up from $775 to the new rate of $1,130.
PHOTO: MediShield Life review: Premium increase much lower than feared

SINGAPORE - The increase in premiums which people will have to pay for the better benefits under MediShield Life will be no more than $355 a year, with most of it absorbed by various government subsidies and top-ups


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MediShield Life Review Committee releases final report

The MediShield Life Review Committee said in a press statement on Friday that premiums will have to increase to fund better protection and coverage for all, but that the Government will provide support to keep premiums affordable.

"The Ministry of Health and the actuarial advisor have worked out the new MediShield Life premiums, taking into account the substantial enhancements to benefit features, the community's share of the cost of universal coverage, and the more even distribution of premiums over our lifetimes," the statement said.

The MediShield Life Review Committee has concluded its review and submitted its report on MediShield Life to the Minister for Health.

The report lays out the Committee's recommendations in three key areas: Significant additional benefits under MediShield Life; universal coverage for all Singaporeans under MediShield Life; and affordable premiums through various Government support measures.

The report also contains the Committee's recommendations and observations on Integrated Shield Plans (IPs) and other related issues studied by the committee.

In a press statement, the Ministry of Health (MOH) said the Government has accepted all the recommendations of the MediShield Life Review Committee on the design of the MediShield Life scheme. It added that the Government will provide close to $4 billion in subsidies and other forms of financial support over the next five years.

The Government also welcomes the Committee's recommendations on Integrated Shield Plans and other related issues, and will study how best to implement them, MOH said.

"The Ministry of Health will ensure that Medisave Withdrawal Limits can continue to fully cover MediShield Life premiums, and the additional 1 per cent-point Employer's Medisave contribution from 2015 will also be sufficient to cover the increases in MediShield Life premiums for most households," MOH said.

To estimate your premium amount, use the MediShield Life Premium Calculator .

Government support will be in the following forms:

a. Government bearing the bulk of the cost of bringing those who have pre-existing conditions into MediShield Life. Government will pay for three-quarters of the cost in the first five years (about $850 million over five years). This will ease the shift to universal coverage under MediShield Life and keep the premium impact manageable for all;

b. Premium subsidies i.e. Pioneer Generation subsidies and subsidies for lower- to middle-income Singaporeans, and Additional Premium Support on a case-by-case basis for the needy (about $430 million per year). These will remain permanent features of MediShield Life; and

c. Transitional subsidies (for all Singapore Citizens) for the first four years (about $830 million over four years).

Premium subsidies for the Pioneer Generation: Pioneers will enjoy special MediShield Life subsidies of between 40 per cent and 60 per cent. They also enjoy annual Medisave top-ups of up to $800 which can be used to pay for premiums.

Premium subsidies for lower- to middle-income: Up to two-thirds of all Singaporean households will be eligible for MediShield Life premium subsidies of up to 50 per cent. The subsidy rates will be higher for those who are older, have lower income, or live in properties with lower annual value (AV). Households living in properties with AV of $13,000 or less can receive subsidies of between 15 per cent - 50 per cent.

a. A Singapore Citizen living in a lower-income household of four will receive up to 50 per cent subsidy for his MediShield Life premium.

b. Permanent Residents receive half of the subsidy rates for Singapore Citizens in the same age and income/AV groups.

Premium subsidies for the Pioneer Generation: Pioneers will enjoy special MediShield Life subsidies of between 40 per cent and 60 per cent. They also enjoy annual Medisave top-ups of up to $800 which can be used to pay for premiums.

Additional premium support for the needy: For the needy who are unable to pay for their net premiums after the various premium subsidies and Medisave top-ups, they can receive Additional Premium Support from the Government, for up to full coverage of their premiums, similar to Medifund for healthcare bills. No Singaporean will lose MediShield Life coverage due to financial need.

Transitional subsidies for Singapore Citizens: To ease the shift from MediShield to MediShield Life, the Government will also provide transitional subsidies for all Singapore Citizens for the first four years of MediShield Life. In the first year of MediShield Life starting end-2015, Government will subsidise 80 per cent of the net increase in premiums (after taking into account premium subsidies), followed by 60 per cent, 40 per cent and 20 per cent in the second, third and fourth year of MediShield Life respectively.

For full tables, please click here.

With this Government support, the review committee noted that:

a. For Pioneer Generation members, MediShield Life premiums will be lower compared with their current MediShield premiums.

b. In the first year of MediShield Life, with premium subsidies and first-year transitional subsidies, the maximum premium increase will be less than $3 per month for the lower- to middle-income, and no more than $6 per month for the higher-income.

c. Beyond the transitional period of four years, the lower- to middle-income will continue to receive premium subsidies. Compared with today's premiums, the increases will range from $3 to $11 a month for the lower- income, and $5 to $14 a month for the middle-income. For the higher- income, premium increases will range from $7 to $30 a month.

Total household premiums are expected to remain within Medisave contributions and inflows, with no additional cash outlay required. For the few who are still unable to afford their premiums, the committee said it welcomes the commitment from the Government to provide additional premium support.

MediShield Life will be implemented in end-2015. MOH will provide more information on the implementation details at a later date.

Click here for pdf on MediShield Life Review Committee's recommendations at a glance.

For more information, go to the MediShield Life website at www.medishieldlife.sg.

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