Gan Kim Yong assures S'poreans over MediShield Life premiums - 07Jun2014

SINGAPORE: The one per cent increase in the employer Medisave contribution next year will be sufficient to cover the rise in premiums for the majority of the upper middle-income families when MediShield Life kicks in next year.

This assurance was given by Health Minister Gan Kim Yong, who spoke to reporters on the sidelines of the World Blood Donor Day on Saturday.

Mr Gan said the new national insurance scheme, MediShield Life, is a very important shift in Singapore's healthcare financing framework.

He said the MediShield Life Review Committee had made very impactful recommendations such as the removal of the lifetime claim limit of S$300,000.

In addition, the proposals to raise the claim limits and reduce the co-insurance rate will allow one to claim more from MediShield Life and that means paying less for one's medical bills.

With more benefits and a higher payout, premiums will rise.

But Mr Gan stressed that premiums will be kept affordable for all segments of the population.

He said: "For the older Singaporeans, the pioneer generation, the Pioneer Generation Package announced recently will ensure that our pioneers don't need to worry about MediShield Life premiums.

"Secondly, the middle- to lower-income Singaporean families, there will be a permanent subsidy structure to ensure that they too will be able to afford the premium for the family.

"And for the middle and higher-income Singaporeans, the additional one per cent Medisave contribution will go a long way to help them cope with MediShield Life premiums.

For example, Mr Muthu earns S$5,000 a month as a project manager.

Mrs Muthu is a homemaker and they have two children and two elderly non-Pioneer Generation parents.

Their current premiums are S$9 for each adult, S$4 for each child and S$38 for each grandparent per month. The total amount adds up to S$102 per month.

The increase in premiums for the entire household, excluding transitional subsidies, is S$39 per month.

The one percentage point increase in employer's Medisave contribution for Mr Muthu will come up to S$50 per month -- which covers his household's premium increase of S$39.

Mr Gan added that the transitional subsidies, offered over four years by the government, will help Singaporeans ease into MediShield Life.

These subsidies will be tiered. In the first year, 80 per cent of the premium increase will be subsidised, followed by 60 per cent in the second year, 40 per cent in the third and 20 per cent in the fourth year.

For example in the first year, if the premium increase is S$10, the subsidy will be S$8 and one pays S$2.

Mr Gan added that the government will work out a special scheme to provide additional support for those who still require further help.

The Health Ministry will finalise the government subsidies and provide details at the end of the month.