Small Change

My 2018 wish list

Push for sustainable healthcare ecosystem and effort to rein in costs among hopes

With the new year upon us, it is timely to take stock of the past 12 months and make plans for what is to come.

And what an eventful year 2017 turned out to be. Many investors would have been pleased with the rally in equity and bond markets.

At home, the benchmark Straits Times Index ended 2017 at 3,402.92, up 18.1 per cent from 2,880.76 at the end of 2016, its best performance since its 19.7 per cent price gain in 2012.

Central Provident Fund (CPF) members were introduced to more retirement planning initiatives, building on the slew of recommendations already announced. These include a CPF Life plan with an escalating payout option available from the start of this year.

Borrowers were cautioned against taking on more unsecured debt with the implementation of a new credit limit management measure which took effect on Jan 1.

Still, there are many areas for improvement and here is my 2018 wish list.

REINING IN RISING HEALTHCARE COSTS AND INSURANCE PREMIUMS

The Ministry of Health said recently that it will appoint a committee by early this year to come up with medical fee benchmarks. This is part of the ministry's approach to ensuring a sustainable healthcare system in the long term as the nation grapples with rising costs in the healthcare sector.


ST ILLUSTRATION: TEOH

The objective is to enhance transparency of medical costs here by providing patients and doctors with a reference of what is a reasonable range of medical fees. Patients can then decide where they go for a procedure. The benchmarks - which will cover most procedures - will take into account factors such as the complexity of a medical case and the varying expertise of doctors.

The fee benchmarks were part of a list of recommendations in 2016 by an industry-led work group, the Health Insurance Taskforce (HITF), to tackle overcharging.

The Life Insurance Association (LIA), which led the call for the recommendation a year ago, has said that this is a critical effort to help insurers effectively manage escalating healthcare costs, which translate into bigger insurance claims if left unchecked.

You can avoid getting scammed by doing your own research on investment schemes, particularly those with attractive returns and seemingly low risks... One way is to ensure that they are regulated by the MAS. In case you are not aware, schemes such as gold buybacks and collective landbanking will be coming under MAS' ambit. The proposed changes to the rules are in the process of being implemented.

We look forward to the roll-out of more HITF recommendations for our benefit, and to ensure an affordable and a sustainable healthcare ecosystem.

REVIEWING INSURANCE PLANS

The moratorium on hikes in Integrated Shield Plan (IP) premiums ended on Oct 31, 2016, so many health insurance policyholders, particularly those with private hospitalisation plans, continue to be affected by premium hikes when their policies are up for renewal.

Not only will my IP premium go up, but the government subsidy on the MediShield Life component has also been progressively reduced.

Ask yourself if it is time to review your healthcare needs and costs. For those with IPs, what enhancements and changes did your insurer introduce last year? Do we continue with our plan or downgrade to a lower ward plan and/or rider? What savings would we enjoy? What benefits would we have to forgo? Only a review will allow us to properly weigh up the benefits and savings.

It is also my wish that the Government, medical practitioners and insurers play their part in reining in runaway health costs.

UNDERSTANDING 'PROTECTION GAP'

The LIA is expected to complete its "Protection Gap Study" by early this year. The study will look into how Singaporeans are covered by insurance, and how they can be better protected in the light of their evolving protection needs. The last such study was done in 2012.

This time, it will include a view on critical illness coverage. Such plans typically offer a lump sum cash payout if the insured is diagnosed with a critical illness that is specified in the plan. The money provides financial support to the insured as he recovers from the illness.

AVOID BECOMING VICTIM OF FINANCIAL SCAMS

Eager to make a quick buck, many retail investors threw caution to the wind and allowed themselves to be carried away by promises of high gains, only to realise too late that they have become victims.

Last year, the financial education programme MoneySense and the Securities Investors Association Singapore organised the Beware! Investment Scams campaign to educate the public on how to identify and avoid financial scams.

You can avoid getting scammed by doing your own research on investment schemes, particularly those with attractive returns and seemingly low risks. Some schemes are related to investments in agarwood trees, overseas landbanking, oil bunkering and binary options. One way is to ensure that they are regulated by the Monetary Authority of Singapore (MAS). In case you are not aware, schemes such as gold buybacks and collective landbanking will be coming under MAS' ambit. The proposed changes to the rules are in the process of being implemented.

Under new rules, some schemes may no longer solicit funds from the public but only from investors deemed to be more sophisticated.

And keep an eye on the investor alert list on the MAS website.

Of late, the MAS has warned that cryptocurrency is not a currency. This comes on the back of worries about a bitcoin bubble, which saw prices hit a record high of US$19,666 (S$26,500) on Dec 18 last year before plunging 40 per cent on Dec 22.

Other tips include asking for brochures and documents such as sales agreements to be sent to you first so you can review them and check the legal terms and the product's suitability. It is also prudent to find out the jurisdictions that the companies operate in.

Consider whether the investment is a good fit with your financial goals and circumstances. And remember that high returns are always accompanied by higher risks.

LASTING POWER OF ATTORNEY

The Lasting Power of Attorney (LPA) is one of several legacy planning tools that most Singaporeans should consider. Unlike a will, which kicks in upon the death of an individual, an LPA allows a person to voluntarily appoint one or more persons (donees) to act on his behalf as a proxy decision-maker if he loses mental capacity.

An LPA allows donees to act in two broad areas - personal welfare and property. Naturally, it is unwise to wait until you are showing signs of physical or mental vulnerability before executing an LPA. Knowing that provision has been made for the future provides peace of mind, as no one can predict when illness or deterioration will take place.

Although there has been a rise in the number of LPA sign-ups - to about 40,000 as of Dec 31 last year from 10,407 in 2014 - many more people could find this a useful legacy planning tool.

If you have not signed up, do note that the $75 administrative fee waiver for the simplified LPA Form 1 will end on Aug 31 for all Singapore citizens, unless it is further extended. The Ministry of Social and Family Development said it is evaluating the effectiveness of the application fee waiver in encouraging people to make their LPAs.

While you can file LPA Form 1 applications for free until August, you will still have to pay fees charged by professionals engaged to witness and certify the application, such as medical practitioners and lawyers.

A version of this article appeared in the print edition of The Sunday Times on January 07, 2018, with the headline 'My 2018 wish list'. Print Edition | Subscribe