Higher payouts? Premiums will jump, says Chee Hong Tat

SENIOR MINISTER OF STATE FOR TRADE AND INDUSTRY AND EDUCATION CHEE HONG TAT.
SENIOR MINISTER OF STATE FOR TRADE AND INDUSTRY AND EDUCATION CHEE HONG TAT.

The premiums of CareShield Life for long-term care could be more than two-thirds higher if payouts are increased and claims criteria relaxed, Mr Chee Hong Tat, Senior Minister of State for Trade and Industry and Education, said yesterday.

Mr Chee, who has been handling CareShield Life even when he was with the Health Ministry until April this year, was responding to MPs' questions on the adequacy of the new national disability insurance scheme, which is to be introduced in 2020.

Under CareShield Life, monthly payouts will start at $600 and, with premiums, increase over time. The payouts are given for as long as the claimant is severely disabled.

In contrast, the existing ElderShield scheme provides for a maximum $400 monthly payout which stops after six years.

Several MPs, however, pointed out that CareShield Life payouts may be insufficient, especially after inflation is taken into account.

Others also want the Government to let the moderately disabled start claiming from the scheme as well. Currently, only those who cannot carry out three of the six activities of daily living (ADLs) on their own can make claims from ElderShield.

  • Details of scheme

  • CareShield Life is a national disability insurance scheme that will start in 2020.

    It will be compulsory for those aged 40 and younger, and will provide better coverage than the existing ElderShield scheme.

    Those over 40 can choose whether or not they want to be on the scheme, and will get monetary incentives to sign up.

    Payouts - which are in cash - and premiums will both increase over time.

    Lower-and middle-income Singapore residents will be eligible for means-tested subsidies of up to 30 per cent of premiums due.

    There are also transitional subsidies for those enrolling in the scheme between 2020 and 2024, and extra support for those who cannot afford premiums even after family support and premium subsidies.

The six tasks are washing, dressing, using the toilet, feeding oneself, moving around indoors and getting from the bed to a chair or vice versa.

"By the time a person is unable to do three ADLs, (they) are in dire straits. One is either headed towards a nursing home or needs someone to provide care full-time," said Workers' Party (WP) MP Sylvia Lim (Aljunied GRC), who called for the criterion to be reviewed before implementing CareShield Life.

"Before that stage, if CareShield Life can give some payouts, then it is likely that the disabled person can continue to be looked after at home with some part-time help."

Dr Lily Neo (Jalan Besar GRC) added that a person who needs help with two ADLs would typically need full-time help.

BALANCING PREMIUMS AND PAYOUTS

If we raise the payout from $600 to $800 a month, premiums for a 30-year-old male in 2020 could increase by about one-third.

SENIOR MINISTER OF STATE FOR TRADE AND INDUSTRY AND EDUCATION CHEE HONG TAT, on the tradeoffs between benefits and affordability.

"While I understand that keeping CareShield Life premiums affordable is necessary, the adequacy and usefulness of CareShield Life are just as important," said Dr Neo, a medical doctor.

She added that the $600 monthly payout is inadequate for families to hire a maid, let alone pay for other healthcare expenses such as medical equipment and services.

Mr Chee said the ElderShield Review Committee discussed the tradeoffs between benefits and affordability before deciding on the final amounts.

"If we raise the payout from $600 to $800 a month, premiums for a 30-year-old male in 2020 could increase by about one-third," Mr Chee said.

Loosening the claims criteria to let those who cannot carry out two, rather than three, basic activities would increase premiums by another third.

And if payouts were allowed to increase for life after a claim is made, premiums will again increase by a third, he said.

MPs and Nominated MPs also called for more transparency on CareShield Life, asking the Government for details on the actuarial aspects of the scheme.

"Could we have raw data and assumptions in actuarial computations made available to industry and academics so that the transparency of the computations can be made clear to all?" asked NMP Chia Yong Yong.

Several WP MPs, including party chief Pritam Singh, also asked the Health Ministry to explain how it arrived at its estimate that one in two Singaporeans will become severely disabled in their lifetime.

"This factor... has raised some eyebrows, leading people to enquire whether it is unrealistically dire, legitimising higher and earlier premium payments," he said.

A version of this article appeared in the print edition of The Straits Times on July 11, 2018, with the headline 'Higher payouts? Premiums will jump, says Chee Hong Tat'. Print Edition | Subscribe