I received the following letter from Ministry of Health. The letter is self-explanatory.
Date: 6 January 2016
Dear Mr Wilfred Ling
CLARIFICATION TO ARTICLE ‘PREMIUM SHOCK FOR MEDISHIELD LIFE’
I refer to your online article “Premium Shock for MediShield Life” (Oct 5, The IFA on Duty Blog), in which you explained the different types of MediShield Life premiums for your readers.
The Ministry of Health would like to share with you that there are some factual inaccuracies in the article. These are explained below and we hope you can make the corrections so that your readers have a more accurate picture of MediShield Life and how it works together with Integrated Shield Plans (IPs).
How Premium Subsidies are Calculated
First, we would like to clarify that the amount of premium subsidies is based on a person’s monthly household income per person and annual value (AV) of his/her home. Singapore Citizens and Permanent Residents also get differing subsidies (PRs get half of the premium subsidy given to Singapore Citizens). As most buyers of Integrated Shield Plans are generally better off, some of your clients may not qualify for premium subsidies, which is intended to help the lower- to middle-income Singaporeans. However, they will still get Transitional Subsidies or Pioneer Generation Subsidies, both of which are not dependent on household income or annual value of their property.
Another point you missed mentioning was that only Transitional Subsidies end after the first four years of MediShield Life, whereas Premium Subsidies and Pioneer Generation Subsidies continue to be given to those who are eligible.
Availability of Information on MediShield Life
You also mentioned in your article that “material information on MediShield Life is not properly disclosed upfront” and that “the true cost of MediShield Life is not known to most people”. We would like to highlight that information on premiums payable has been published on MOH’s MediShield Life website at https://www.moh.gov.sg/content/moh_web/medishield-life/premiums---subsidies/how-to-receive-premium-subsidies/subsidy---premium-tables.html#main_content_text. Welcome Booklets explaining MediShield Life were also sent to all Singapore households in August 2015. The premiums table can be found on pages 15-19 in the English section of the Welcome Booklet, pages 31-34 in the Chinese section, pages 47-50 in the Malay section and pages 65-68 in the Tamil section. If you did not receive a copy of the Welcome Booklet, you can download it from the MediShield Life website at https://www.moh.gov.sg/content/dam/moh_web/MediShieldLife/Others/Downloads/MediShield%20Life_Online%20Preview_Jul2015.pdf. If you prefer, we would be happy to send you another physical copy of the booklet. Such effort by the Ministry to inform the public on MediShield Life is contrary to the comment that “material information on MediShield Life is not properly disclosed upfront”. As for premiums beyond the first five years, you would appreciate that the rates can only be set after knowing the claims experience in the next few years. This is no different from how premiums are set by private insurance companies selling Integrated Shield plans or indeed any health insurance plans in the market.
We note that you also have raised some concerns in your article about the increase in MediShield Life premium amounts, and you pointed out that for some age groups, the differential between MediShield Life premiums and premiums for an IP was small. We would like to clarify that for MediShield Life, a proportion of the premium increase during younger ages is for "pre-funding". This works to better distribute premium payments bore smoothly over a person's lifetime. It benefits the policyholder who pays slightly more during his working years, and benefits by getting premium rebates when he is older. This policy design was based on feedback gathered during the MediShield Life public consultation and is useful as policyholders would have stopped work when they are older. As such, the additional amounts paid during the policyholders’ working ages are set aside in a pool in the MediShield Life Fund, which individuals and others in the same generation can tap on to receive premium rebates when they are older.
Distributing premiums more evenly over our lifetime helps us to pay ahead for premiums. Planning and saving for our future healthcare expenses will reduce concerns over whether we have enough savings during retirement.
We appreciate your efforts in explaining MediShield Life, but hope that you can look into the above to allow accurate information to be provided to your readers. Do let us know if you have any questions by emailing us at MOH_Media@moh.gov.sg. We would be glad to assist.
Thank you.
Lim Bee Khim (Ms)
Director
Corporate Communications
Ministry of Health
Like this article? Subscribe to my newsletter below for more.
The premium subsidy ceiling is set low at $2600/person. This means practically all Uni-grads (and diploma-grads after 5 yrs) will not be getting this subsidy. Unless they are living in a family with >3 members who are not working. Or unless those graduates are in the growing pool of underemployed & underpaid category.
As for “material information”, just like statistics, you can spin it almost any way and still considered “factual”. Uppermost on many people’s minds are exactly what rationale & justification for the prices of ML’s premiums? Why and how from $X premium of old Medishield to $Y premium of ML? What are the numbers and claims experience that went into the computations and calculations? Maybe state secret?
Even for the old Medishield, what were the claims experience for the past 10 years? How much premiums collected? How much claims paid out? The median percentage of bill coverage for various hospital stays and procedures? What were the claims experience as compared to the premium increase over the last 10 years? Was it commensurate i.e. 1% claims increase resulting in 1% premium increase? What was the size of Medishield pool over last 10 years? How much surplus? Any shortfall that required emergency topups? All these also secret.
I understand that in designing & re-designing a revamped Medishield, the natural impetus is to build in over-buffers and large safety margins for sustainable self-financing. It may be embarrassing for authorities to explain if hard figures & calculations were to be shown to the public. But as a compulsory national scheme paid for by taxpayers own money, I think transparency is important for trust. Furthermore such transparency acts as its own devil’s advocate to really scrutinise policies, and if authorities can’t even be prepared to defend publicly its sums, calculations & rationale, then I think it says something very loudly.
You really have to open your eyes wide if your premium subsidy is ZERO because the execution is REALLY very different from the beautiful impression created. According to the tables in the accompanying the premium advice from CPFB, I, Singaporean with HDB flat and lowest band income, should get some premium subsidy but was given ZERO. After MOH calculator confirmed my computation, I ask CPFB why?
CPFB who is only responsible for debitting my account on 01Jul, kicked my email to so-called Medishield Life Team who sat on it for a week. Below is the shocking reply after I sent reminder and I still have to produce evidence to prove that their data was indeed outdated before they will start the rework.
“We wish to share that the national means-testing to determine your eligibility for MediShield Life Premium Subsidies was completed last year. Therefore, the MediShield Life Premium Subsidies will be determined based on your household information at that period and the subsidy eligibility will be valid for 2 years.”
Why taxpayers money are not better used for system with up to date info and on good people to do it right the first time! Based on below highly laid back method, HDB UPgrader in 2016 will get more premium subsidy than those who DOWNgrade to HDB flat. Those who are less rich after 2015 get lesser premium subsidy than those who remain as rich or got richer after 2015.
ABC,
Govt info for benefits only looks at your NRIC address as of 31 Dec of last year, and your IRAS income statement as of Year of Assessment of last year i.e. YA2015 is actually for salary in 2014.
Any changes in-between you need to inform relevant authorities separately. E.g. lost job in 2015 or 2016; got a much lower paying job now; change home address after 31 Dec 2015.
Of course this mode of operation benefits those whose life situation improves. E.g. jobless in 2014 but got a $20K a month job in 2015 will still get GST voucher & other rebates in 2016 like as if he is still unemployed. This is Singapore-style — just take it that your welfare benefits only comes after 1-2 years later by default.
Take it in another way — ABC, will you report to authorities if you suddenly get a $20K/month job, or will you keep quiet to continue enjoying GST/ML benefits in 2017-2018 since up to 2018, the authorities will only consider your salary in 2015-2016??
ABC,
Did you or someone in the family ever opted out and disallow personal details to be used for means testing?
I believe No, as ABC shared that the authorities has his means testing info, just that his life situation has changed in recent times and the means testing info is not reflective of his current situation.
As explained by govt agencies and the press many times, the 3 main components of means testing are:
1. Income based on last year’s IRAS records i.e. YA2015 which is actually income earned in 2014. Hence income info can be up to 2 years outdated.
2. AV of your home based on your NRIC address as of 31 Dec of last year. Hence AV can be up to almost 12 months outdated.
3. Whether you own more than 1 property. I’m not sure how fast or updated govt agencies are with regard to this info when it comes to means testing. E.g. Let’s say you own a HDB plus a condo in 2015. However you sold the condo in Mar 2016, leaving you with only the HDB. Will this info be updated if you undergo means testing in July 2016?? Of course your computer records will be updated in IRAS, SLA, URA after you sell the condo, but in govt it is common for right hand not to know what left hand is doing.
Many govt agencies will also want to know other info as part of means testing, depending on the benefits or type of scheme e.g. number of family members staying in same household.
Shouldn’t ABC also enjoyed the Transitional Subsidies? Even if he did not pass the means testing, the transitional subsidy is still applicable.
Ya lorr… unless ABC is SPR — PRs don’t get transitional subsidies. Anyway without a full & complete scan of the official documents, cannot say anything accurately…
My understanding is if any of your household member has opted not to have personal information being accessed, the ENTIRE household will not receive any Medishield Life premium subsidies. So even if you did not opt out but someone in your household did, you and everybody else in the household will not receive the subsidy. See FAQ’Choosing not to partcipate in the household Check Exercise’ (https://www.moh.gov.sg/content/moh_web/medishield-life/resources—faqs/faqs.html#ESVC):
1. I am uncomfortable with my personal information being accessed. Can I choose not to participate in the eligibility checks for MediShield Life Premium Subsidies?
Yes, you may choose not to allow the Ministry of Health to access your financial information, for example, income for the eligibility checks.
If you chose not to allow access to your financial information, you and your entire household will not receive any MediShield Life Premium Subsidies as there is insufficient information for us to calculate the subsidies to be given.
Your household will still be covered by MediShield Life.