Parliament approves Bill for long-term disability insurance

Health Minister Gan Kim Yong.
Health Minister Gan Kim Yong.
A healthcare assistant checking the blood pressure of a patient at the Ghim Moh Senior Care Centre earlier this year. People on ElderShield who do not want to upgrade to CareShield Life will continue to be covered under the existing scheme.
A healthcare assistant checking the blood pressure of a patient at the Ghim Moh Senior Care Centre earlier this year. People on ElderShield who do not want to upgrade to CareShield Life will continue to be covered under the existing scheme. ST PHOTO: KELVIN CHNG

CareShield Life for those born from 1980 onwards will provide basic care needs for the severely disabled

Long-term disability insurance will become compulsory for people born from 1980 onwards, after a Bill to that effect was passed in Parliament yesterday.

This move plugs another gap in Singapore's healthcare and ageing support. In 2015, MediShield Life was made compulsory to provide universal health coverage. Older people were then offered support through the Pioneer and, later, Merdeka Generation packages.

With an eye on the future, the CareShield Life and Long Term Care Bill was passed yesterday.

CareShield Life will provide the basic long-term care needs for younger residents as they age should they become severely disabled. Those born in 1979 or earlier have the option to join, with significant help on offer to do so.

Under the scheme, anyone who is severely disabled will be given at least $600 a month for the length of his disability, often for life, to help him pay for the care he prefers. The premium and payout will be adjusted over the years to keep the payout sufficient for the basic needs of the severely disabled.

Several of the 15 MPs, including Dr Lily Neo (Jalan Besar GRC), who spoke on the subject asked for the payout to be higher.

But Health Minister Gan Kim Yong said those who want higher payouts can buy supplementary schemes from private insurance companies. Premiums for these can be paid with Medisave - like the CareShield Life premiums - up to an annual capped amount.

REACHING OUT TO THOSE ELIGIBLE

These provisions allow us to proactively reach out to disabled individuals to inform them of their eligibility for claims, not just for CareShield Life and ElderShield, but also for other government disability schemes, using disability assessments already performed at healthcare institutions.

HEALTH MINISTER GAN KIM YONG, on allowing the CPF Board and the Agency for Integrated Care, which will jointly manage CareShield Life, to access people's disability information.

 
 
 

The Government wants to keep CareShield Life basic and hence affordable for the majority.

The Bill paves the way for the Government to take over the existing ElderShield insurance run by three insurance companies.

ElderShield payouts are lower and limited to a maximum of six years, even if the person remains disabled for longer. So far, $153 million of the $3.5 billion worth of premiums collected has been paid out in claims. This is because the vast majority of policyholders are still young.

The Bill also allows the Central Provident Fund Board and the Agency for Integrated Care, which will jointly manage CareShield Life, to access people's disability information. Mr Gan explained: "These provisions allow us to proactively reach out to disabled individuals to inform them of their eligibility for claims, not just for CareShield Life and ElderShield, but also for other government disability schemes, using disability assessments already performed at healthcare institutions."

Safeguards will also be put in place to prevent abuse.

For example, payouts to people who lack mental capacity can be managed by a caregiver. Policyholders may also make a healthcare institution, such as the nursing home they are in, receive their payout.

But the money must first be used to provide care to the policyholder. Not doing so will be an offence, and as it is an offence against vulnerable persons, the penalty will be double that for false declarations, he said. The penalty for false declarations is a $5,000 fine, jail of up to 12 months, or both. Those found guilty also have to pay twice the amount claimed.

Payouts are protected from creditors, "with two tight exceptions" - to reimburse CareShield Life in the case of wilful defaulters, and to pay a healthcare institution for care provided to the policyholder.

The Government will take "a strict stance" against people who can afford to pay their premiums but wilfully refuse to do so. These include Singaporeans living overseas. Not doing so would be unfair to others who would have to shoulder that burden by paying higher premiums. But Mr Gan promised: "For those who genuinely need help, we will help them."


CareShield Life and ElderShield

CareShield Life will be a compulsory long-term care insurance for residents born from 1980 onwards, regardless of their health, disability or financial status. They will be enrolled automatically when the scheme is launched in the middle of next year, or when they reach their 30th birthday.

Premiums can be paid through Medisave. The Government will provide subsidies of up to 30 per cent of premiums for two in three households. Additional help will be given for those who still cannot afford to pay the premiums.

Should policyholders become severely disabled - defined as inability to perform three of six activities of daily living, which are washing, feeding, dressing, toileting, mobility and transferring independently - they will receive at least $600 a month for as long as the disability lasts.

Those who are already severely disabled when they turn 30 years old will need to pay the first premium and be eligible for payouts thereafter.

The payout starts at $600 a month next year, and will go up by 2 per cent a year for the first five years. Thereafter, adjustments to payouts will be decided by the CareShield Life Council to be appointed by the minister.

The scheme will also be compulsory for Singaporeans who live overseas, including those who do not plan to return home. This is because the payout is in cash and can be sent to them.

People born in or before 1979 have the option to join CareShield Life a year later, from mid-2021.

Those on ElderShield and still paying premiums will have the rest of their premiums adjusted to take the higher benefits into account.

Everyone opting for CareShield Life will be given at least 10 years to pay the top-up premiums.

The Government will give up to $2,500 to encourage older people to join. The Pioneer and Merdeka generations will get an additional $1,500, giving them a total of $4,000. These apply only if they join the scheme within the first two years.

People on ElderShield who do not want to up-grade will continue to be covered under the exis-ting scheme.

Salma Khalik

A version of this article appeared in the print edition of The Straits Times on September 03, 2019, with the headline 'Parliament approves Bill for long-term disability insurance'. Print Edition | Subscribe