Basskaran Nair, For The Straits Times
Manage it well or risk eroding public trust
Published on Apr 22, 2014 7:48 AM
In his speech to the Administrative Service on March 24, Minister for Finance Tharman Shanmugaratnam was reported to have said that the Government faces a challenge retaining the public's trust. He also noted that today's environment is more complex, with competing interests and rising expectations. He pointed to the Pioneer Generation Package as a case in point.
The minister was right to draw attention to the problem.
The Pioneer Generation Package has been generally well-received. Some components of the Pioneer Generation Package will be easy to implement. The 450,000 beneficiaries will get annual Medisave top-ups of $200 to $800, and more flexibility to use their Medisave for a wide range of outpatient treatments. They will also get additional benefits, subsidised bills at specialist outpatient clinics and polyclinics, and qualify for the Community Health Assist Scheme (Chas).
But there is a potential trust deficit issue. This lies in its centrepiece, MediShield Life. Subsidies will be given according to age. At age 65, the subsidies start at 40 per cent of the premium and 60 per cent by age 90. Those aged 80 and above this year have their premiums fully covered through premium subsidies and Medisave top-ups. Those who have moderate to severe functional disabilities will get cash assistance of $1,200 a year.
However, several aspects of the programme could undermine public trust.
The first factor is the cost of the premium. The Ministry of Health has given an assurance that under MediShield Life, the pioneer generation will not pay more out of pocket than they do under today's MediShield. While this may be true in the initial period, there is concern that after a few years, the premiums will go up.
Look at MediShield's current track record - premiums have gone up on the flimsiest of reasons.
Mr Sia Cheong Yew, a former Straits Times senior editor from the pioneer generation, wrote to the Forum page saying he was shocked when his insurer increased his premium from $1,879 to $2,900 upon renewal, a jump of more than 50 per cent.
The reasons given were the enhanced benefits announced by the Government, increasing medical costs and a desire to serve customer needs.
He added that there was no way for anyone to challenge what the company had proposed without specific data such as total premiums against total claims. As for customer needs, these had not even been discussed with customers.
There is a need for the Government to step in to prevent an erosion of trust when it comes to the setting of premiums for MediShield-related insurance plans.
Even though these are private sector insurers, they ride on state-operated basic MediShield plans, and the public expects the Government to regulate premium rises.
It is not clear at present how these MediShield integrated plans will be dovetailed with the new MediShield Life, but it is fair to say Singaporeans will be expecting an even closer level of scrutiny of premium hikes under MediShield Life.
In Singapore, the Government is the price setter in most parts of the economy. In the property market, for example, land cost is the main factor in the cost of a property, and this is largely dictated by government valuers.
For the Pioneer programme, the basic cost ingredients will similarly be determined by the Government. They include doctors' fees, the illnesses covered and a host of other deliverables.
The nagging concern is that, even with a 50 per cent subsidy, the final premium over the years would be just as high, if not higher, than the present MediShield.
The second possible trust issue lies in the fact that the Pioneer Generation Package is at least a 30-year programme. Thirty years is a long time in politics.
While this government has committed its word and budget to the Pioneer Package, there is no certainty that future governments will honour the programme. And what about implementation? Will qualifications and benefits chop and change at will?
I would suggest that a permanent secretariat with a 30-year mandate be put in place. This secretariat can consist of people from both public and private sectors.
Recall two decades ago when the Government announced that it would use its Budget surpluses to increase every citizen's stake in Singapore, expand the assets of its citizens and double the shareholder base. That asset enhancement programme had as its centrepiece the privatisation of profitable government companies every two to three years. After the SingTel privatisation, the committees were disbanded and the ambitious, long-term plan on asset enhancement by increasing shareholder base petered out. A permanent secretariat, not a committee, should therefore be incorporated from the outset.
The Pioneer Generation Package is a good move to "reward" pioneers for their sacrifice. But pioneers also want assurances that the premiums will be kept affordable; and that the programme will be as long-lived as has been promised.
The writer, a retired public relations professional, teaches media and public policy at the Lee Kuan Yew School of Public Policy, National University of Singapore.