Parliament: Affordability of CareShield Life premiums and criteria to qualify raised by MPs

Other concerns raised at the second reading of the CareShield Life and Long-Term Care Bill included the stringent criteria needed to qualify for payouts and gender-differentiated premiums, with women paying higher premiums than men. ST PHOTO: LIM YAOHUI

SINGAPORE - Can people afford premiums for the new compulsory long-term disability insurance scheme, and will payouts be sufficient? These were some questions MPs asked during a parliamentary debate on Monday (Sept 2).

Other concerns raised at the second reading of the CareShield Life and Long-Term Care Bill included the stringent criteria needed to qualify for payouts and gender-differentiated premiums, with women paying higher premiums than men.

Dr Chia Shi-Lu (Tanjong Pagar GRC), who chairs the Government Parliamentary Committee for Health, asked how the Ministry of Health will ensure premiums remain affordable, in the light of rising long-term care costs, especially for people who are either mildly or moderately disabled.

Senior Minister of State for Health Edwin Tong said that premiums will be kept affordable through subsidies, including permanent subsidies for lower- and middle-income policyholders.

Singaporeans who cannot afford CareShield Life premiums even after subsidies, Medisave and family support, will also be given additional support.

In addition, existing cohorts will get incentives to join the scheme, while younger cohorts will receive transitional subsidies, he added.

Dr Lily Neo (Jalan Besar GRC) pointed out that the $600 monthly payout for severely handicapped individuals was not enough, and asked if the amount could be raised.

"While I can understand that higher pay-outs will require higher premiums, the purpose of insurance is to give peace of mind on future unforeseen needs," she added.

Mr Tong replied that CareShield Life payouts already start at an amount which is significantly higher than that of the current ElderShield Scheme, and increasing the starting payouts from $600 to $800 a month would increase premiums for a 30-year-old policyholder by around a third.

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Dr Neo also asked for the claims criteria to be relaxed from being unable to perform at least three activities of daily living, to two.

These activities comprise washing, dressing, feeding, using the toilet, walking and moving from a bed to a chair and vice-versa.

Mr Tong replied that lowering the claims criteria to two such activities would increase CareShield Life premiums for a 30-year-old policyholder by about one-third.

Several MPs also asked if the claims criteria would take into account mental disability, leading to a person's inability to perform activities of daily living.

Mr Tong said that MOH has been working with experts to improve the disability assessment framework, in order to explicitly recognise the impact of cognitive impairment on physical disability.

Under the new framework and revised training curriculum, assessors will be guided more explicitly on the aspects they should take into consideration if a policyholder is suspected to have cognitive impairment, including whether the policyholder's problem-solving ability and memory impact his ability to carry out an activity of daily living.

"This will result in cognitively impaired policyholders being able to more consistently qualify for CareShield Life claims," he said.

The much-debated gender-differentiated premiums, with women paying more than men, was again brought up by several MPs, such as Nominated MPs Anthea Ong and Irene Quay, Ms Tin Pei Ling (MacPherson) and Workers' Party Non-Constituency MP Leon Perera.

"The principle underpinning insurance is risk pooling. Hence, I do not agree that our society should go the route of differential premiums by gender, causing a gender divide," said Ms Quay.

They also noted that while women generally live longer than men, they also have less financial resources than men.

However, Mr Tong reiterated the explanation given last year that the difference in premiums is due to women living longer, and being more likely to experience severe disability.

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"As CareShield Life is optional for existing cohorts, gender-neutral premiums could encourage male policyholders to stay on ElderShield and buy gender-differentiated supplements from the private insurers, which may now appear cheaper," he added.

"Conversely, female policyholders would now find CareShield Life a much better deal than the existing gender-differentiated ElderShield. This increases the risk of gender skewing in the risk pool as more women than men would join the CareShield Life scheme."

Mr Tong said that gender-neutral premiums would become increasingly unsustainable and premiums would have to increase, possibly approaching the level women would have had to pay anyway under a gender-differentiated scheme, but without covering a significant proportion of men.

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