In his 2013 National Day Rally speech, Singapore’s equivalent of a State of the Union address, Prime Minister Lee Hsien Loong devoted considerable attention to our healthcare safety net and the gaps that need mending.
Whilst he sketched out the general direction for how we should proceed, nowhere were there any details. Particularly absent was how much the changes would cost and how the extra costs would be paid for. Perhaps he was leaving it for a public debate — he did say, “we are going to do a public consultation, seek views before we decide on the details of the scheme and it will take a year” – which isn’t a bad thing at all. However, it is quickly apparent that a good part of the cost will be borne, not by general taxation, but from individual (albeit forced) savings.
The second broad impression I got from his speech was that although the general ideas are to be welcomed, the problems they are meant to address are so obvious and long-standing, one can’t help but ask: What took you so long?
He touched on four chief areas:
1. Community Health Assist Scheme (CHAS)
2. Paying for visits to Specialist Outpatient Clinics (SOCs)
3. Using Medisave for outpatient treatment
4. Medishield for in-patient treatment
Community Health Assist Scheme
The Community Health Assist Scheme is a state subsidy for visits to participating general practitioners and dental surgeons. It is primarily designed as a subsidy scheme for low-income persons over 40 years old. The prime minister’s proposal is to remove the age floor. That’s all.
The individual is also expected to co-pay (i.e. pay part of the bill out of his own pocket). The website linked above simply says “You are required to co-pay for your treatment under CHAS. Please check with your doctor/dentist on your fees before you proceed with the treatment.” It is hard to know how helpful the scheme is without knowing the co-payment ratio. You will notice that while Lee Hsien Loong spoke glowingly about how CHAS helped a certain hypertensive Mr Tay, he didn’t mention that Mr Tay had to pay part of the bill himself.
CHAS currently issues two kinds of cards to Singaporeans deemed eligible.
Chronic conditions include diabetes, hypertension and stroke. The scheme has variable caps “depending on the number and severity of one’s condition(s)”.
As pointed out earlier, there is no proposal to augment the benefits, only to remove the age floor, allowing younger adults and children in the same low-income households to be covered. How much extra this is going to cost the state purse was not revealed. It wasn’t even revealed how much CHAS is currently costing us, outside of a mention that “we have 300,000 people on CHAS”.
The prime minister is treating us like children. I have candy for you, he says, without telling us how much the candy costs. This is not to say we shouldn’t support the widening of the safety net, but he shouldn’t go around taking credit for the candy without being honest with citizens. We can’t have a proper public consultation without first laying out the facts.
More subsidies for specialist outpatient care
Even vaguer was that of “increase the subsidies for the lower- and middle-income patients who are visiting Specialist Outpatient Clinics”. It is not clear what the current subsidies are, how much the annual bill is to the state and what the government has in mind when it speaks of “increase”. He also said that “we will means-test these additional subsidies” which seems to suggest that parsimony is still the guiding star. Once again, don’t treat us like children. Lay out the facts.
You may be allowed to spend your own savings on outpatient care
Items 3 and 4 are not about the public purse paying out more. They are about taking a bigger chunk out of our own Medisave accounts. First, however, let me lay out diagrammatically what Medisave and Medishield are:
Although Medisave is, strictly speaking, an individual’s own savings account within the Central Provident Fund (CPF) system, tight rules govern when withdrawals can be made from it. A glaring omission has been that, outside of a few exceptions, Medisave cannot be used for outpatient treatment. This even though for several years, the mantra has been to avoid warding patients wherever possible. Day surgeries, for example, have become much more common in the last ten years.
It makes eminent sense that people should be permitted to pay out of their Medisave for relatively high-cost outpatient treatments. The eyebrow raising aspect is why we haven’t done so yet.
Now Lee is promising a new candy treat: the government will open the spigot a bit more, but it is worthwhile bearing in mind that the extra money is not coming out of taxation revenues, but from individuals’ savings accounts. In effect, he is saying the individual is going to be allowed a bit more control over using his own money. Yes, that’s the way to put it. Saying we are “strengthening the social safety net” would be misleading since not a cent is coming from the common pool of funds.
Catching up with Obamacare
A more cynical reaction to Lee’s speech may be to point out that it would hardly do, now that Obamacare is being implemented in many US states (some refuse to sign on), to keep our own social safety net even thinner than in America. If a country that often seems nonchalant about inequality, at times celebrating it even, can introduce universal health insurance coverage, for Singapore to have an even more inadequate system must be embarrassing.
Item 4 relates to Medishield. This is really an insurance program for healthcare expenses, although annual premiums are almost always paid from individuals’ Medisave accounts. Lee announced three changes:
4a. Medishield insurance cover will stretch to end of life, instead of stopping at age 90. This is a no-brainer; the absurd thing is that it had a cut-off age at all. What did we expect people to do? Commit suicide when they fall ill after 90?
4b. Medishield insurance will be universal. No one is allowed to opt out. Those who are currently out will be brought back in. That’s how national healthcare pooling should be, otherwise those who think they are in good health with low risks will refuse to participate, leaving only high-cost persons in the system. Again, why did it take so long to do something as basic as this?
4c. There will be a raising of the maximum claimable amount, as indicated by Lee’s words: “better protection for very large hospital bills”. Unfortunately, he left it vague. (This whole business of how Medishield actually works is confusing to many people, so I will try to explain below).
Lee pointed out that Medishield insurance premiums must go up. A bigger bite will be taken from our Medisave accounts to pay for them. Once again, no money is intended from the public purse, except in the case of people who don’t even have enough money in their Medisave to pay for premiums. In those cases, “for those who cannot afford”, the government will “subsidise” the premiums.
Yet no details. I checked the Ministry of Health website four days after the speech. Nothing there.
It shouldn’t be hard to disclose the existing figures, e.g.
- what percentage of Singaporeans are currently covered under Medishield and their demographic profile;
- how much is collected in annual premiums;
- how much is disbursed for pay-outs;
- what is the ratio of current pay-outs to current premiums;
- how this ratio is expected to change as the population ages or as the demographic profile evolves in other ways, assuming no modification to the terms of the insurance.
Surely, before the cabinet approved the general outline, they would have been provided current figures, as well as projections how these figures will change if the proposed modifications are implemented. Why aren’t they promptly released to the public? Are data masseurs now at work?
More for medical, less for housing
Between letting us use our Medisave for outpatient treatment and paying larger premiums for Medishield (out of Medisave) , the writing on the wall is clear. The percentage of CPF savings routed into Medisave must go up, which means the percentage routed into the Ordinary Account will go down — unless the total percentage of salaries required to be contributed into CPF rises.
If the Ordinary Account has to be slimmed down, this will have an impact on people’s retirement savings. More immediately, those who have earmarked to the max their Ordinary Account for housing mortgage payments, stretching 20 years or more, may find that their calculations need to be re-worked. It may come as a nasty shock.
Medishield is less than it looks
Saying we have will have a universal healthcare insurance scheme may be comforting, but the devil is surely in the details. As it stands today, Medishield doesn’t lift a finger to help unless you are in considerable difficulty, but when you get into really serious difficulty, it flicks a suicide switch and stops helping. To help you grasp its mechanics, here’s a simple table. On the left-most column is the size of the hospital bill, increasing as you go down.
See also How Medishield works.
Hospital bills up to the first threshold, which lies between $1,500 and $3,000 depending on age and class of ward has to be wholly paid for by the patient. The next major threshold is the “Claimable Limit” — a figure that is not easily researched. All it says on the above-linked site is that “Your Claimable Limit, or claim amount, is determined by the maximum limit applicable to each type of expenses, e.g. charges incurred per day of hospitalisation, surgical procedures, surgical implants, and approved specific treatments and outpatient treatments.”
Oh, wonderful, it’s so clear now.
The excess portion of your hospital bill above this obscure Claimable Limit is all yours to pay.
I recently came across a migrant worker who suffered a head injury. He needed urgent surgery by a neurosurgeon to save his life and was for several days in intensive care. The total bill came to about $161,000. In his case, as a foreigner, none of these Medishield calculations apply, but his exclusion does not diminish the point I want to make: Suppose you meet with an accident like what he suffered, you’d be unconscious as you’re wheeled into a hospital, and when you wake up, you’d face a bill of that size. How much of that a Singaporean would get from Medishield is not something I can figure out, but I have a sneaky feeling that a good portion of such a massive bill would be above the Claimable Limit. Say Medishield pays half of such a bill; you’re still left with $80,000. You might get a heart attack!
That said, my rough exploration suggests that for someone in a B2 ward, Tiers 1 and 2 are rather narrow bands of $1,000 and $2,000 respectively, Tier 3 (i.e. requiring only 10% co-payment) appears quite wide, stretching up to maybe $50,000. If anyone can find a detailed table, please let me know.
Let’s use a more mundane example. Let’s say you have cardiac problems and need an angioplasty. Let’s assume you choose a B2 ward, and have to stay one day in intensive care followed by five days in the ward. I used the online calculator (provided by the above-mentioned Medishield site) to arrive at an estimate.
As a percentage of the total hospital bill, Medishield will contribute about 41 percent. You pay about 59 percent, or $2,342.50. Is this reasonable? This question should be part of the debate.
On the whole . . .
Despite our mainstream media singing in chorus what an “epochal”, visionary set of proposals Lee laid out, on closer examination, they turn out to be rather underwhelming. The chief impression one has is that all these should have been done long ago. What we’re doing is nothing earth-shattering, but merely to fix some glaring shortcomings of a system long throttled by an ideological determination to avoid a “welfare state”.
Even now, a big part of the cost of these improvements is going to come not from the common pool of taxation revenue, but from individuals’ Medisave accounts. However, that isn’t going to stop this government from taking all the credit, as if it’s entirely from their largesse.