ElderShield is poorly understood, as is health financing in general. To make matters worse for the review committee set up to improve the national severe disability scheme, it is partly linked with negative perceptions. These led over a third to opt out of the scheme when it was introduced in 2002. The rate has fallen to about 5 per cent, but there are still those who believe the benefits are low and hard to claim. Even a financial adviser once wrongly claimed in public that the scheme was yielding excessive profits. Such misconceptions can arise when people compare the premiums collected over past years with the claims paid out during that time. They fail to see that present surpluses are not all profits but largely represent reserves to meet future demands. Typically, claim rates are lower in the earlier years but rise as the pool of policyholders age.

A Duke-NUS Medical School study projected that by 2030, about 83,000 Singaporeans aged 60 and over would need help with one or more necessary activities of daily living - like transferring from a bed to a chair, eating, toileting, bathing and dressing. Without support, the daily lives of those afflicted (7 per cent of the population in that age group) would be indeed distressing. The fortunate will have family to lend a hand but many might face drained resources, especially when relatives themselves need help.

With half of those who are healthy at the age 65 being at risk of a severe disability later, it was logical to adopt risk-pooling as the model of funding. By starting to pay modest annual premiums from the mid-point of life, most or all of the total payment would be completed by the time one hits the vulnerable years. The review committee's proposal to make the scheme compulsory for new cohorts will help to ensure all are covered and all contribute to the effort - as is the case with MediShield Life. That's the missing link in the present social safety net. But if misperceptions lurk about ElderShield, useful ideas could fall by the wayside when the Committee makes it full recommendations in the middle of the year.

Basic concepts ought to be explained now so that people can appreciate how lowering the enrolment age "makes sense", as experts have observed - both to cover every Singaporean and to smooth out premiums. Of course, it's natural for many to seek bigger benefits over longer periods. That's why pains must be taken to show how costs will then rise and why a basic scheme must remain affordable. As for calls for state subsidies for all, people need to see how this could lead to a blowout of healthcare expenses, especially when the Government is obliged to offer premium support to the needy, and ensure the poor and frail elderly are not neglected. Any compulsory insurance scheme deserves to be closely scrutinised but first, the fundamentals must be made clear.