CareShield Life to offer higher payouts from 2026; $570m in subsidies to offset premium increases

SINGAPORE – From 2026, CareShield Life will offer higher monthly cash payouts to help Singapore residents with severe disabilities cushion the fast-rising cost of long-term care.

The payout growth rate will rise from the current 2 per cent a year to 4 per cent a year from 2026 to 2030. Consequently, those who make a claim in 2030, for instance, will get $806 a month instead of $731.

Premiums for the national long-term care insurance scheme will need to rise, but the Government said it will provide an additional $570 million in premium support over the next five years to help policyholders offset the increases.

These were among the key changes recommended by an independent CareShield Life Council led by Ms Jeanette Wong, former group executive of DBS Bank. In conducting the review, the council consulted nearly 300 individuals, including caregivers, healthcare professionals, union leaders and community partners.

“These enhancements to CareShield Life complement the broader suite of long-term care support measures announced at Budget 2025,” said a Ministry of Health (MOH) spokesperson at a media briefing on the review.

“Together, these enhancements ensure that long-term care remains affordable and in a sustainable manner for years to come.”

It is the first review of the scheme since it was launched in 2020 as a mandatory plan offering lifelong coverage for Singapore residents born in 1980 or after, regardless of pre-existing disabilities or health conditions. It is optional for those born in 1979 or earlier.

In an Aug 27 Facebook post, Senior Minister of State for Health Koh Poh Koon said: “All premiums will remain fully payable by MediSave, and no one will lose CareShield Life coverage due to an inability to pay their premiums.”

The review comes as an ageing population pushes up demand for long-term care, leading to increased costs. This is exacerbated by manpower and technology costs.

MOH said that annual national long-term care operating expenditure almost doubled over the last five years, from $1.7 billion to about $3 billion.

On Aug 27, MOH said it had accepted the council’s recommendations and the changes will be implemented progressively from Jan 1, 2026.

With the council’s recommendations, younger cohorts will see larger premium increases while seniors will be least affected. Premiums, which can be fully paid using MediSave, will grow at 4 per cent per annum, after a one-step increase in premiums in 2026.

The Government will help by providing more than $570 million in additional support over the next five years, on top of existing premium subsidies.

This comprises a transitional support of $440 million to evenly phase in and moderate the premium increases, and more means-tested premium subsidies worth over $130 million for low- to middle-income policyholders.

Those who are unable to afford their CareShield Life premiums after subsidies and have limited family support will be invited to apply for additional premium support, if they are eligible.

These support measures will mean that annual premium rises from 2026 to 2030 will be moderated to about $38 on average, and no more than $75, MOH said.

To claim from CareShield Life, one needs to be assessed to have severe disability, which means being unable to perform at least three out of six activities of daily living (ADLs) – washing, toileting, dressing, feeding, transferring and mobility. There will be no change to this eligibility criterion for claiming payouts.

The council told the media it had considered expanding the eligibility criteria to allow those with less severe disability, such as an inability to perform two ADLs, to qualify for payouts. But it decided against recommending this because it would significantly increase premiums for all policyholders.

Those who wish to have more coverage beyond the recommended enhancements can buy supplements offered by private insurers to boost their plans, it said.

Furthermore, from 2026, CareShield Life will no longer accept older individuals with mild and moderate disabilities.

The underwriting was kept loose on a time-limited basis to allow older individuals to enrol in the scheme, even if they have mild and moderate disabilities. The council has recommended that the original underwriting criteria be reinstated in 2026, given the dwindling take-up rates during the grace period of the last four years, to keep premiums affordable and fair.

This group of older individuals can still opt to join the scheme in 2025. But from Jan 1, 2026, older individuals born in 1979 or earlier can enrol in CareShield Life only if they have no pre-existing disabilities.

The council also recommended that further improvements be made to the assessment and claims process based on the feedback it received during its engagements with Singaporeans.

Since 2021, the accredited assessor pool has nearly doubled to more than 700 assessors, with over two-thirds of them providing house calls. MOH said it is looking into providing tele-assessments to better support claimants.

MOH said more than $26 million in claims has been paid out under the scheme, while $2.8 billion in CareShield Life premiums has been collected, including around $800 million in government premium support as at December 2024.

A total of 1,821 people made CareShield Life claims in 2024. They ranged in age from 30 to 93, with the median age being 52. This means about half of CareShield Life claimants are in their 30s and 40s.

MOH said that some 1.93 million Singaporeans and permanent residents aged 30 and above are covered under CareShield Life, with approximately 535,000 individuals insured under ElderShield. This means approximately eight in 10 Singapore residents have either of the long-term care insurance plans.

ElderShield is an older scheme that provides lower cash payouts of $300 or $400 a month, and for only up to five or six years, depending on the plan type. It stopped enrolling new members when CareShield Life was introduced.

Still, some older individuals may not want to switch to the superior plan.

“Some people may say, ‘I’m retired, why do I have to keep paying my premiums’. They don’t realise that if they encounter severe disabilities, they actually get paid for life, on a monthly basis,” said the council chairwoman, Ms Wong.

Mr Christopher Tan, chief executive of wealth advisory firm Providend, said the premium increase for someone in his mid-30s is about 13.5 per cent a year till 2030, while a 50-year-old will see a premium increase of about 9.5 per cent a year till 2030.

Seniors will see smaller premium increases, or even lower premiums, owing to the reinstating of the underwriting requirement for those born in 1979 or earlier.

“The high premium increases from 2026 to 2030 are largely due to the one-time premium in 2026. But the key enhancement is the doubling of payout growth rate. Over a longer period of time, the payout increase will be substantial,” Mr Tan said.

“In addition, CareShield Life coverage is for life, and payouts are for as long as one is in severe disability, while premiums are funded over a shorter period, during one’s working years.”