Adequacy of Medishield coverage given rising healthcare costs

13 August 2012

Question No. 592

Name of person: Ms Foo Mee Har

Question

             To ask the Minister for Health (a) how comprehensively the enhanced MediShield insurance scheme covers the healthcare needs of Singaporeans and whether it is adequate in helping them cope with rising healthcare costs as well as longer life expectancy; (b) how Singapore's enhanced MediShield scheme compares with universal health insurance schemes offered in other countries such as Australia; and (c) what it will take to offer comprehensive universal healthcare coverage for Singaporeans in order to protect them from the burden of healthcare costs.

Answer

            To ensure that healthcare is affordable to their citizens, countries adopt different approaches to healthcare financing. Some do so primarily through subsidies while others do so through universal health insurance schemes, where members pay premiums which are risk-pooled to cover healthcare expenses.

Each approach has its own pros and cons.

In Singapore, we have adopted a hybrid, which combines government subsidies for healthcare services (up to 80% in hospitals and 75% in polyclinics), with the 3M system to help Singaporeans pay for their share of the bills after subsidy.

The first M – Medisave - is a savings scheme for medical expenses. The Government provides Medisave top-ups for Singaporeans from time to time, thus helping Singaporeans to grow their Medisave savings. In Budget 2012, the Government announced the GST Voucher scheme to provide annual Medisave top-ups for all lower-income elderly Singaporeans.

The second M - MediShield - is an insurance scheme that helps pay for larger bills. This stretches Medisave monies through risk-pooling. More than 90% of Singaporeans are covered under MediShield.

The third M - Medifund - acts as a final safety net, to help all who need financial assistance for their healthcare expenses. We have systematically topped up the Medifund endowment sum since 2007, increasing the annual assistance available from about $60 million to close to $100 million.

Under this unique approach, all Singaporeans have good access to quality healthcare services so that no one is denied needed medical care because of affordability.

MediShield should not be taken in isolation, but as part of the comprehensive healthcare financing framework. Therefore, it cannot be directly compared with universal health insurance schemes adopted by other countries.

Proposals to enhance MediShield (which are under public consultation) will further improve coverage, to include patients with psychiatric conditions, older Singaporeans and increase payouts on an annual and lifetime basis. We are also studying whether it should cover babies born with congenital conditions.

My Ministry will continue to strengthen the 3M system to improve coverage for Singaporeans and give them greater peace of mind.