By MP for Hougang SMC, Png Eng Huat
[Delivered in Parliament on 9 Jul 2014]
According to the World Health Organisation (WHO), the goal of universal health coverage is to ensure all people have access to health services they need without the risk of facing financial hardship when doing so.
Madam, I welcome the proposed MediShield Life to address the fundamental issue of providing basic universal health insurance for all Singaporeans including those with pre-existing conditions.
At the same time, I want to express my concern about the risk of financial hardship caused by out-of-pocket payments and the inclusion of pensioners into the scheme.
Out-of-Pocket Payments (Deductibles)
It was revealed in Parliament in 2009 that 20 per cent of all subsidized patients would still need to fork out cash to pay for their hospital bills beyond their Medisave and MediShield deductions.
The affordability of out-of-pocket payments under MediShield is determined by 3 components; deductible, co-insurance, and the policy year claim limit. The MediShield Life Review Committee (MLRC) has recommended a reduction in the co-insurance rates and an increase in the policy year claim limit but it has left the deductible untouched.
Although I understand the rationale in using deductibles to preserve the intent of the original MediShield as a basic insurance scheme for large medical bills, a high deductible is certainly going to affect out-of-pocket expense for those who are not cash-rich and low-income families.
The WHO estimated that 100 million people in the world are pushed into poverty every year due to direct out-of-pocket payments for using health services.
In the pursuit of providing better protection against large hospital bills and chronic treatments, have we inadvertently increase the risk of financial hardship for patients who, more often than not, may only encounter non-catastrophic medical bills not claimable under MediShield Life. These bills could be substantial especially to lower-income Singaporeans. On top of that, Singaporeans will also have to contend with rising premiums since this is a compulsory scheme.
The transitional subsidies for MediShield Life will end by 2018 and the premiums will rise substantially. For a single-income family with 2 young children and a stay-at-home spouse, the sole breadwinner will have to bear the brunt of the increase in premiums for the entire family. The same burden will also hit single parents with young children. And if these Singaporeans are aged between 21 and 40, they will be hit with the largest percentage increase in premiums come 2019. This will certainly put a strain on their finances.
Although Singaporeans can use their Medisave accounts to settle the premiums and out-of-pocket expenses, the use of Medisave is not without limits and conditions. Cash top-ups will become inevitable. The scenario after 2018 is indeed uncertain but I am heartened to hear that the Minister will look into these issues and ensure disadvantaged Singaporeans will be able to afford MediShield Life come what may.
Pensioners
Next I want to talk about the impact of MediShield Life on pensioners.
MediShield Life will be made compulsory for all including pensioners who are currently receiving better medical benefits than what the universal scheme can offer. The Government has announced that it will pay for the premiums for this group of pensioners so that they will not be made worse off under MediShield Life coverage.
For pensioners under the Fixed Amount of Ward scheme (FAW), their public hospital bills are capped at $8 per day and outpatient treatment at polyclinics is free. Under MediShield Life, the deductibles alone will become a significant financial burden especially for low-income pensioners.
The MLRC Report qualifies the lower-income group as individuals with monthly per capita household income of $1,100 or less. It was reported that there are about 8,500 pensioners who receive less than $1,000 in gross monthly pension as of 10 January 2008.
Pensioners will also need to contend with the loss of extended medical coverage for their dependents under MediShield Life. Their dependents can no longer ride on their medical benefits. The additional out-of-pocket expenses for hospital bills and the annual premiums for MediShield Life coverage for their dependents are additional costs to them.
Some pensioners may not have enough savings in their Medisave accounts as they are not required to set aside any Medisave since they already enjoy life-long retirement medical benefits. Under MediShield Life, these pensioners will have to pay the deductibles and co-insurance portions in cash.
Madam, exemptions from compulsory schemes are not new. Even a compulsory saving scheme like CPF allows exemptions.
Currently, pensioners who are receiving a monthly pension can apply to be exempted from the Minimum Sum Scheme. Pensioners can be fully or partially exempted depending on the amount of pension they receive each month. It makes perfect sense for pensioners to be fully or partially exempted from the Minimum Sum Scheme because their lifelong retirement needs are met.
The same principle should also be applied to pensioners under the proposed MediShield Life scheme. Pensioners under the various medical schemes should be given a choice to join MediShield Life because their medical needs are also met.
Many of the early pensioners served the nation as nurses, policemen, soldiers, clerks, teachers, etc. for a good part of their adult lives in the hope that they could retire with a small pension and not worry about their medical needs in their sunset years.
There are about 32,000 pensioners today. The pension scheme has already been discontinued and this number will not grow anymore. The number of early pensioners receiving free lifetime medical benefits under FAW is even smaller, less than 1,000. As a percentage of the local population, these FAW pensioners constitute a mere 0.025 per cent of the compulsory insurance pool. Even if we have to take the entire group of pensioners into consideration, they will only make up 0.83 per cent of the insurance pool. Their exclusion will not cause an impact.
MediShield Life is designed to give Singaporeans some peace of mind in healthcare needs; something the pensioners are enjoying all these while. To mandate pensioners to join the scheme may have the opposite effect if they end up on the short side of the benefits.
This Government has already made the provision to guarantee pensioners medical benefits for life. This guarantee should stand for pensioners who wish to remain status quo.