Affordability of premiums for inactive CPF members

8 September 2014

Question No. 182

Name and Constituency of Member of Parliament

Mrs Lina Chiam
Non-Constituency Member

Question:

To ask the Minister for Health how many inactive CPF members will not have sufficient monies in their Medisave accounts to pay for the MediShield Life premiums after the subsidies start to decrease at the end of 2015.

Answer

1                   MediShield Life will be introduced in end 2015 to provide better protection against large hospital bills for all Singaporeans for life.

2                   The Government will provide significant help for Singaporeans to keep MediShield Life premiums affordable in four ways:

i.         Premium subsidies of up to 50% for the lower- and middle-income;

ii.         Special premium subsidies of up to 60% and Medisave top-ups of up to $800 for the Pioneer Generation;

iii.         Transitional subsidies for all Singaporeans, to help ease the shift to MediShield Life over four years; and

iv.         Additional Premium Support for needy Singaporeans.

3                   As I explained during the debate on Medishield Life, the premium subsidies for the lower- to middle-income Singaporeans, Pioneer Generation and the Additional Premium Support for the needy are permanent features of MediShield Life. This means that a significant proportion of Singaporeans will continue to enjoy MediShield Life subsidies for life, even after the transitional subsidies have ended in 2019.

4                   The Member asked how inactive CPF members with no or little Medisave savings would pay for their premiums. Currently, about 9 in 10 of adult inactive CPF members have sufficient Medisave balances to pay for at least three years of their MediShield Life premium payable or are currently having their MediShield premiums paid for by family members. The Government also provides regular Medisave top-ups through schemes such as the GST-Voucher, which can be used to help to pay the premiums. 

5                   With substantial Government support, most families will be able to fully cover MediShield Life premiums from their Medisave. For example, consider a lower-income family of five where the father supports two elderly parents, his wife and a child, and has a monthly income of $2,000. As their monthly income per household member is $400, the family will qualify for the highest tier of MediShield Life premium subsidies. The permanent subsidies will keep the MediShield Life premium for the whole family affordable at $128 per month, as the father’s monthly Medisave contribution of $180 is more than sufficient to cover the entire family’s premiums.

6                   For those with genuine financial need, Additional Premium Support can help with their remaining premiums in addition to the various Government subsidies, top-ups and family support. No Singaporean will fall out of MediShield Life due to inability to afford premiums.