SINGAPORE - Older people who want to join CareShield Life might have to pay premiums of more than $1,000 a year for 10 years. This is before government incentives and premium subsidies kick in.
Should disability strike, they will be paid at least $600 a month - for as long as they remain disabled - by the government-run long-term care insurance.
According to the Ministry of Health, half the people who are healthy at the age of 65 can expect to become severely disabled later in life. Of those who do, three in 10 are expected to live with their disability for more than a decade.
CareShield Life will be compulsory for all Singaporeans and permanent residents aged 40 years and younger when the scheme is launched in 2020.
Older people are also encouraged to avail themselves of this cover, when it is opened to them a year later, in 2021.
Singaporeans for whom it is optional will get $500 to $2,500 as participation incentive if they join it within two years of its launch. Since the top-up premiums rise with age, greater incentives will be offered to older citizens.
On top of that, the Government will pay 20 per cent to 30 per cent of the top-up premiums for people with per capita household incomes of $2,600 or less and who live in homes valued at $13,000 or less.
Today, of the two million people aged 40 years and older, two in three are covered by ElderShield, a long-term care insurance offered by three insurance companies.
Of this cohort, 26 per cent are on the older ElderShield300, which pays $300 a month for up to five years, and 38 per cent are on ElderShield400, which pays $400 for up to six years.
Those who decide to upgrade to CareShield Life - which provides payouts for life - will need to pay top-up premiums to enjoy the expanded coverage.
Although CareShield Life premiums are paid till the age of 67 years, those in their mid-50s and older who upgrade will be given 10 years to pay the additional premiums.
People aged 39 to 48 now who are on ElderShield400 in 2021 will automatically be switched to CareShield Life. They have two years to opt out with no penalty.
Older people and those not on ElderShield have to opt in if they want CareShield Life coverage.
There is no age barrier to joining the scheme, though there is no incentive after the first two years, and premiums are higher for older members.
Health Minister Gan Kim Yong said it might not make sense for everyone to join, especially if they are among the 35 per cent who have bought supplements to ElderShield schemes that offer higher or longer payouts.
This is because people's needs and circumstances differ.
He said that for some, "the incentives and subsidies will be meaningful and helpful", but older people "may find it very difficult to participate".
"It is important for them to take into account their own financial resources and their care needs," he said. "Some of them may already have their own arrangements on their long-term care needs and CareShield Life may not be an appropriate option."
Dr Chia Shi Lu, head of the Government Parliamentary Committee for Health, said many older people have told him that they would like to join CareShield Life in spite of the higher premiums.
"Given the many incentives, subsidies and premium support, it would still be affordable for many in the older group," he said.