CareShield Life balances inclusivity and long-term sustainability

We refer to The Straits Times editorial (CareShield Life: Give women fairer deal; July 14) and commentary (Three niggling questions about CareShield Life; July 19).

The ElderShield Review Committee debated the issue of gender-differentiated premiums extensively.

Women live longer and are more likely to experience severe disability. They will claim more from long-term care insurance and, hence, it is actuarially sound for premiums for women to be higher.

We heard diverse views at our focus group discussions, where participants were given information about differences in life expectancy and disability incidence between genders.

Some Singaporeans - both women and men - felt that it was fair for premiums to be higher for women. Others felt that premiums for an inclusive scheme should be gender-neutral.

In our deliberations, we considered other implications of making CareShield Life premiums gender-neutral.

CareShield Life will be optional for some two million Singaporeans born in 1979 or earlier. Two-thirds of them have ElderShield, with gender-differentiated premiums.

Gender-neutral premiums will make CareShield Life less attractive for male ElderShield policyholders, as premiums for ElderShield supplements are gender-differentiated. CareShield Life could eventually end up with a profile of mostly female policyholders, pushing up premiums further.

Schemes like the Affordable Care Act in the US and MediShield Life cover medical expenses and annual premiums are paid for life, so they are not apple-for-apple comparisons with CareShield Life.

Women generally pay more years of premiums as they live longer. On the contrary, women and men pay premiums over the same duration for CareShield Life; hence annual premiums for women are higher.

Inclusivity was a key goal for our committee.

We recommended strongly for CareShield Life to protect future generations of Singaporeans with pre-existing disabilities, and urged the Government to provide premium subsidies.

We are glad that premium subsidies are designed as a percentage of premiums payable, so women will receive more support in dollar terms. Allowing family members to use their Medisave to pay their loved ones' premiums also encourages family support.

Overall, we felt that gender-differentiated premiums with percentage-based subsidies, would strike a good balance between inclusivity and long-term sustainability.

We are mindful of the concerns that women may have less savings, and we hope that the Government will continue to explore ways to support women with their premiums.

Chan Chia Lin (Ms)

Director, Holywell

Member, ElderShield Review Committee

A version of this article appeared in the print edition of The Straits Times on July 21, 2018, with the headline 'CareShield Life balances inclusivity and long-term sustainability'. Subscribe