(Delivered in Parliament on 10 July 2018)
Mr Speaker, I would like to acknowledge the contribution and work of the Eldershield Review Committee under the Chairmanship of Mr Chaly Mah into framing a new long-term care plan for Singaporeans. The current Eldershield scheme has seen around 40% of eligible Singaporeans opting out because of a perception of low payouts, amongst other reasons. Making Careshield compulsory and universal, and separately collecting premiums earlier from the age of 30 represents a fundamental rejigging of Singapore’s long-term care insurance scheme.
At the outset, it is important that the Government not underestimate the extent of misinformation surrounding the scheme. The recent WhatsApp messages which the Government has sought to debunk through the mainstream media about it allegedly profiting from Careshield Life, can be put down to some perceived pain points and public education gaps.
Many of these find their roots in a lack of knowledge about the principles behind long-term care schemes such as Eldershield, but also in the use of statistics and data that are based on projections for which little detail and clarification has been provided thus far.
In particular, the question of ever escalating premiums after transitional subsidies end and Careshield Life’s likely loss ratio, given the Eldershield experience has created considerable unease in the public mind. While the use of Medisave to pay Careshield premiums was recommended by the Committee, this has also raised the prospect of a further depletion of CPF members’ Medisave accounts towards another compulsory scheme after the recently announced Medishield Life, a scheme whose transitional subsidies are only going to be phased out in 2019. In the case of Careshield Life, the effect of technological disruptions on permanent jobs, the gig economy and more contract jobs in the workplace creates insecurities which impact sustained participation in compulsory schemes, particularly when future premiums are going to increase.
One major concern I have is on the statistic that the Eldershield Review Committee and many mainstream media outlets zeroed-in about 1 in 2 Singaporeans becoming severely disabled in their lifetime. From footnote 10 in the Committee’s report, this is a Ministry of Health estimate based on local data, supplemented by international data. This factoid which appears prominently in the Executive Summary of the Committee’s Report has raised eyebrows leading some to enquire whether it is unrealistically dire, legitimizing higher and earlier premium payments. I would like the Minister to explain this projection, specifically, how the Ministry came to this conclusion because many Singaporeans cannot visualise how it coheres with the reality they see around them today. More detail on this statistic would be welcome.
This in turn has led some to focus narrowly on the by now familiar statistic that Eldershield collected about $2.6b in premiums while paying out only slightly in excess $100m from 2002 to 2016. In fairness to the long-term care schemes, this point cannot be intuitively understood until one appreciates that Eldershield continues to provide lifetime coverage after one stops paying premiums and the scheme requires significant pre-funding to anticipate sufficient payouts for policyholders.
To this end, it would be important to reveal the actuarial principles and considerations behind both Eldershield and Careshield Life. In this regard, there are some questions I seek the Minister to shed light on.
When Eldershield was launched in 2002, the Ministry of Health made a specific provision in its ElderShield contract with the private insurers to return 50% of any accumulated surplus to existing policyholders, if the actual claims experience should turn out to be different from what was projected in 2002. In the first 5 years of the scheme, ElderShield claims have been lower than those projected in 2002. From a Parliamentary Question filed my colleague Daniel Goh in 2017, the Ministry confirmed that two Eldershield rebates have been given to CPF members enrolled in the scheme – one in 2007 and another in 2012 to the tune of $130 million in total.
On what basis did the Ministry set the rebate quantum at 50% when Eldershield was first introduced and is there a rebate quantum assigned for Careshield Life and if so, what is it, or is this a matter for the Independent Council to pursue?
Secondly unlike Eldershield, a significant aspect of Careshield Life envisages increased cash payouts over time, supported by regular adjustments over time to keep inflation in check. How often will actuarial principles be reviewed, a point that becomes very significant particularly for those who may have passed away but contributed significantly by way of premiums?
Mr Speaker, to arrest unnecessary speculation and misinformation about Careshield Life, the Government must commit to publish and be absolutely transparent about the actuarial principles and factors that drive premium hikes, including the investment returns on the Careshield Life.
To this end, the Committee‘ s Report calls for the set up of an Independent Council and calls on its recommendations to be made public. I would argue that it is in the Government’s interest to consider if it could go further before the Careshield Life Bill is introduced next year. In fact, I would call for the Government to consider implementing a Freedom of Information framework in its administration of Careshield Life and appoint an information officer to the Independent Council who would respond to public requests for information about any aspect of Careshield Life for a reasonable administrative fee.
There are good reasons for the Government to consider taking such an approach. First, such a commitment to openness would go hand-in-hand with Careshield Life’s universal and inclusive approach based on risk pooling which makes every Singaporean in each cohort, his brother and sister’s keeper. As all Singaporeans contribute to the risk pool, it follows that the Government should make it easier for Singaporeans to take ownership of the schemes they are enrolled into and make enquiries on any aspect of the scheme’s administration.
Secondly, as the Committees’ Report puts the onus on the Independent Council to regularly review and recommend premium and payout adjustments to the Government, this aspect of the Council’s work may come under scrutiny whenever premiums are raised. In all likelihood, more not fewer questions on future and previous long-term care projections will be raised, complete with misgivings, apprehensions and inaccuracies in the coffee shops and on social media. A pro-active approach to public education would minimize this prospect and an open information regime would go a long way to address criticisms pertaining to transparency and accountability.
Thirdly, the administration of Careshield Life presents an opportunity to pilot a fresh approach towards public education of government policies. Mr Speaker, we live in an era where inaccurate news can gain currency very quickly through social media and cloud people’s perceptions of policies. Even as some intentionally perpetuate misinformation about policy, there are yet many others who have genuine enquiries on various aspects of Careshield Life that they may be unsure about. A Freedom of Information regime with respect to Careshield Life can promote the Committee’s recommendation to better educate the public about the scheme. More importantly, the advantage of such an approach towards education is that the public discourse is less likely to be antagonistic but more data and fact driven.
To conclude Mr Speaker, my Workers’ Party colleagues and the Chairman of the Healthcare GPC have spoken about reviewing whether Careshield Life can be made gender neutral. I strongly support this call in the name of inclusivity and in parallel with the scheme’s philosophy of each cohort looking after itself. It will mean men will pay more and women less. Let it be so. This motion gives Parliament scope to rethink the concept of inclusivity for Careshield Life and define it to mean that men and women will not be treated differently.
In this vein, I would also call on the Government to considering extending tax relief to CPF members who top-up the CPF Medisave accounts of their loved ones, regardless of gender until the Basic Healthcare Sum is met, similar to the tax relief cap on top-ups to the Special Account currently. Such a move would enhance the ability of CPF members’ Medisave accounts to support future increases in Careshield Life and other compulsory premiums, generate greater interest for members and give them some peace of mind for their loved ones at the same time.
Mr Speaker, notwithstanding the comments, views and suggestions to improve the management of Careshield Life by my colleagues, the Workers’ Party supports the rationale behind Careshield Life and the set-up of ElderFund.