More explanation needed on CareShield Life scheme

The speed at which the Ministry of Health (MOH) accepted and announced the implementation of the recommendations of the ElderShield Review Committee is discomfiting, especially since the new CareShield Life scheme will be compulsory and will include everyone from age 30 (ElderShield to make way for compulsory CareShield Life; May 28).

As it entails taking money from Central Provident Fund (CPF) members, why was it not debated in Parliament?

CPF is a major source of retirement funds for most citizens, and the Government must be judicious in the use of this money.

With the myriad of compulsory schemes, such as CPF Life, many CPF members will have very little left in their accounts for withdrawal on retirement.

We know that ElderShield policyholders contributed $3.3 billion in premiums by the end of last year and that about $133 million has been paid out in claims (Those on ElderShield will be able to upgrade from 2021; May 28).

While I understand the need to meet future claims as the population ages, I wonder whether the amount collected is too much.

The MOH said that annual claims paid out have risen by 12 per cent per year from 2013 to last year, compared witha 3 per cent increase per year in premiums collected over the same period (ElderShield premiums collected meant to support future claims; June 4).

But, this does not provide a clear picture. In absolute dollar terms, the 12 per cent rise in claims paid could be much lower than the 3 per cent increase in premiums collected.

The MOH also estimates that one in two Singaporeans who are healthy at the age of 65 is at risk of having a severe disability over their lifetime. What is not stated is the percentage of those with severe disability who are eligible to make an ElderShield claim.

CareShield Life may be a great scheme, but for it to gain acceptance, the MOH must take it upon itself to fully explain it, especially to younger Singaporeans.

Hoe Lye Soon

A version of this article appeared in the print edition of The Straits Times on June 09, 2018, with the headline 'More explanation needed on CareShield Life scheme'. Print Edition | Subscribe