Many Singaporeans will be upset with the proposed increase in MediShield premiums by an average of $120 a year to cover higher payouts for catastrophic hospitalisation.

I am glad the proposed scheme will benefit those who face increasingly huge hospital bills. But I don't understand how the extra premium is arrived at.

I remember the last increase of MediShield premiums was less than three years ago in July 2005 when my wife and I each had to pay a new premium of $160 a year for our age group, an increase of $100. With the next proposed increase, my wife and I may each have to pay $280 a year, 75 per cent more than before.

According to the Central Provident Fund Board 2006 annual report, 2.8 million CPF members were covered under MediShield and during the year the board collected $297 million (including interest income) from these members but paid out only $119 million in claims and expenses. It had a surplus of $178 million in 2006. It now has more than $925 million in net assets in the MediShield Fund.

Is it justifiable for the Ministry of Health (MOH) to increase MediShield premiums again when the CPF Board is operating on a huge surplus every year and sitting on a massive net asset? Why can't the surplus be used for the higher payouts?

I believe the priority of MOH is to help those who need financial help by reducing deductibles and co-payment, and more important, by controlling medical costs in government hospitals.

Seah Leong Khai