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21 Dec 2020

21st Dec 2020

Higher MediSave top-ups for Pioneer Generation and premium payment deferred for those who are unable to pay

      The Government has accepted all the recommendations of the MediShield Life Council on the MediShield Life 2020 review which will ensure that MediShield Life continues to provide adequate and meaningful protection to Singaporeans. The changes will be implemented in March 2021.

2.   The Government has announced earlier that we will provide premium subsidies and support of up to $2.2 billion over the next three years to help Singapore Residents with their MediShield Life premiums. Following the public consultation held on the MediShield Life Council’s recommendations, we will defer premium payment until end December 2021 for those who do not have sufficient MediSave balances to pay their premiums in the coming year. We will also enhance the annual MediSave top-ups for Pioneer Generation (PG) seniors.

3.   These measures will keep the net premium increases for all Singapore Citizens to no more than about 10% in the first year.

MediShield Life Council’s Recommendations

4.   The Government has reviewed the MediShield Life Council’s recommendations, and is satisfied that the recommended benefit changes will ensure that MediShield Life continues to provide adequate and meaningful protection to Singaporeans. The actuarially determined premium adjustments are necessary to support the rising number of claims and payouts as well as the benefit changes, and will ensure that MediShield Life remains sustainable in the coming years. We also note that the Council will appoint a committee to review MediShield Life coverage for cancer therapies, in response to feedback on the need to contain rising healthcare costs.

5.     The key recommended benefits include updating and refining the claim limits to provide better coverage, introducing treatment-specific claim limits for costlier types of community hospital care and outpatient radiotherapy, raising the policy year claim limit from $100,000 to $150,000, and allowing higher daily claim limits for the first two days of acute hospital stays, amongst others.
 
6.      The higher daily claim limits for the first two days of acute hospital stays will provide better coverage for short stays for patients who can be discharged earlier. In support of this recommendation, the Government will also adjust the MediSave withdrawal limits for acute hospital stays in tandem, as shown in Table A. Taken together, the new MediShield Life and MediSave limits will result in lower out-of-pocket costs for patients. 

Table A: New MediShield Life and MediSave daily ward and treatment limits for acute hospital stays*

Day

MediShield Life

claim limit^

MediSave withdrawal limit

Cumulative limit#

1

$1,000 ($700)

$550 ($450)

$1,550 ($1,150)

2

$1,000 ($700)

$550 ($450)

$3,100 ($2,300)

3 and beyond

$800 ($700) per day

$400 ($450) per day

$4,300 ($3,450) in Day 3; additional $1,200 ($1,150) for each subsequent day


* (Original limits shown in parentheses)
^ This is the limit for normal ward stays. ICU ward stays are subject to a MediShield Life claim limit of $2,400 per day for the first two days, and $2,200 per day from the third day onwards. The same MediSave withdrawal limit applies for both normal ward and ICU ward stays.
#  Sum total of MediShield Life and MediSave limits, accumulated over the days.  

Government’s Premium Support Measures

7.   The Government will provide up to $2.2 billion for premium subsidies and support over the next three years to help Singapore Residents with their premiums. This comprises $1.8 billion for existing premium subsidies and support measures for lower and middle-income households, PG and Merdeka Generation (MG) seniors, and the financially needy (see details in Annex A), and $360 million for the new COVID-19 Subsidy. 

8.     COVID-19 Subsidy. The Government earlier announced a one-off COVID-19 subsidy for all Singapore Citizens for two years to further cushion the impact of the premium adjustments during this exceptional period. This will subsidise 70% of the net increase in premiums (after taking into account existing premium subsidies) in the first year, followed by 30% in the second year. Taken together with the existing premium support measures, the net premium increases for all Singapore Citizens will be kept to no more than about 10% in the first year. 

9.   Deferment of Premium Payment for those with Insufficient MediSave balances. MediShield Life premiums can be fully paid using MediSave. The vast majority of Singaporeans have sufficient MediSave for their premiums. Family members can also utilise their MediSave to help pay the premiums for their loved ones. Nonetheless, to further allay concerns about premium payment during this exceptional period due to the economic impact of COVID-19, the Government will defer the payment of outstanding premiums until end December 2021 for Singapore Residents who have insufficient MediSave balances and are unable to pay their premiums. In addition, the financially needy can apply for Additional Premium Support for assistance with their premiums. 

Enhancements to PG MediSave Top-Ups

10.   Currently, PG seniors receive $200 to $800 in annual MediSave top-ups, which can be used to pay for their MediShield Life premiums. As part of our commitment to keep premiums affordable for PG seniors, the Government will provide higher lifetime annual MediSave top-ups of $250 to $900 to all PG seniors from 2021. For older PG seniors (aged 81 years old and above in 2020) who have serious pre-existing conditions and need to pay higher premiums, we will also provide a one-off MediSave top-up of $50 to $200 per year for five years, from 2021 to 2025. Please refer to Annex B for details on the enhanced annual PG MediSave top-up amounts.

11.    After these enhancements, all PG seniors who are 86 years old and above in 2020 will continue to have their MediShield Life premiums fully covered by the special PG premium subsidies and MediSave top-ups, while younger PGs will have about two-thirds of their MediShield Life premiums covered. 

12.     For example, the revised MediShield Life premium for an 89-year-old PG senior is $2,025. After taking into account the special PG premium subsidy, the net premium payable is $831, which can be fully covered by the senior’s enhanced PG MediSave top-up of $900. The revised premium for a 74-year-old PG senior’s premium is $1,320 and the net premium payable after the special PG premium subsidy is $674. With the enhanced MediSave top-up of $250, the senior pays the remaining $424 or about one-third of his original premium using his own MediSave or cash. The COVID-19 subsidy will further reduce the net premium payable in 2021 and 2022. Please refer to Annex C for the detailed illustrations after the COVID-19 subsidy is phased out.   

13.    Please refer to Annex D for additional details on net premiums after taking into account Government support.

14.     Mr Gan Kim Yong, Minister for Health, said, “MediShield Life was created to ensure that Singaporeans would be protected against large hospital bills for life. To ensure that the scheme can continue to be relevant and sustainable, the Government has accepted the MediShield Life Council’s recommendations to enhance the scheme and adjust the premiums. At the same time, we understand that Singaporeans will need more support during this period. We will provide up to $2.2 billion in premium subsidies and support, including an additional COVID-19 subsidy for all Singapore Citizens. We will ensure that MediShield Life continues to provide coverage for all Singaporeans, for life, and ensure that the premiums remain affordable.”

15.  The Government thanks the Council for the time and effort committed to the comprehensive review.


MINISTRY OF HEALTH 
21 DECEMBER 2020