Closing Speech by Health Minister Gan Kim Yong at the 2nd Reading of the MediShield Life Scheme Bill

Mr Deputy Speaker, I thank the Members for their support for the MediShield Life Scheme and the Bill and for their comments. I am heartened by the strong interest in the Scheme, as this is an important universal mandatory Scheme that applies to all Singaporeans. Members have reflected their concerns and sought clarifications on how this will affect various groups of Singaporeans, especially those who are more vulnerable. Their concerns have echoed the feedback we received from the members of the public over the past months and I thank Singaporeans for their contributions.

2. The MediShield Life Review Committee worked hard to listen to Singaporeans and came up with a comprehensive package of well thought-through recommendations, which garnered unanimous support from the Members last year. This MediShield Life Scheme Bill will allow us to carry through the Committee’s recommendations.

3. I will address the Members’ questions and requests as well as explain the thinking behind some of the provisions in the Bill and provide a better understanding of the Scheme.

4. Sir, I will address the issues that have been raised in the following three broad themes:
a) First, “Towards a more inclusive society through MediShield Life”;
b) Second, “Towards a More Caring and Progressive Society, meaning those who are needy will receive help and those who are able should do their part.”; and
c) Third, “Ensuring sustainability in our healthcare system”.

Towards a More Inclusive Society through MediShield Life

5. First, on the inclusiveness of MediShield Life. I thank the Members’ support for the Bill, and the support for universal coverage to ensure that no Singaporean is left behind to shoulder any unexpectedly high medical bills on his own. There are pockets of Singaporeans who may not fully appreciate the benefits of a universal Scheme. Therefore, Ms Ellen Lee is right that there is a need to help Singaporeans understand what it means to have a universal Scheme and the spirit behind it. I seek Members’ help to continue our outreach efforts and share about MediShield Life with grassroots leaders, community leaders and Singaporeans.

6. Ms Jessica Tan, Dr Lily Neo and Mr Alex Yam asked about whether some Singaporeans can be excluded from the MediShield Life Scheme, such as those who are residing overseas. All Singapore Citizens and PRs are required to participate in the national risk-pool even if they are overseas, as part of collective responsibility. They can benefit from MediShield Life coverage any time they return to Singapore and seek medical treatment, regardless of any changes in their health or life circumstances.    

7. Companies offering portable medical benefits generally build on top of the MediShield Life layer and there is minimal duplication. For example, some may make additional contributions to employees’ Medisave while some may purchase Integrated Shield Plans for them. A/Prof Fatimah Lateef asked about how Singaporeans with portable medical benefits from their companies can also benefit from MediShield Life Scheme. It is for this reason, the Government encourages companies to move towards portable medical benefits and they are supported by incentives to do so. Employers who do not offer portable medical benefits can review the coverage and structure of their employer medical benefits, to tap on and even build on top of MediShield Life or Integrated Shield Plans.

8. MediShield Life will continue to cover them for life, even when they leave employment or retire. They need not worry about developing medical conditions that cannot be covered even if they are no longer employed.

9. In response to Mr Png Eng Huat’s query on how pensioners can benefit from this Scheme. MediShield Life will provide additional benefits, above and beyond that provided for under the pensioners’ existing medical benefits. It will not take away anything that they already enjoy today.

Towards a More Caring and Progressive Society

(I) Those Who Are Needy Will Receive Help

10. The provisions of the Bill also reflect the overall philosophy of the MediShield Life scheme, in moving towards a more caring and inclusive society. Members in the House have shared concerns about premium affordability, which were also brought up during the MediShield Life review. As I outlined in my Second Reading Speech, the Government has committed a large slate of measures and subsidies to help Singaporeans afford their premiums. Let me briefly recap these subsidies and address queries that the Members have raised.

11. First, there will be Premium Subsidies for the lower- to middle-income Singaporeans, of up to $2,600 household monthly income per person. Premium Subsidies are a permanent feature of the Scheme, which means that Singaporeans will receive them for as long as they meet the eligibility criteria.

12. Second, there will be Pioneer Generation subsidies for all Pioneers. Ms Tin Pei Ling and Mr Baey Yam Keng expressed their concerns about Pioneers who may face difficulties with higher premiums over time. Sir, allow me to recap the rationale and assurance of the Pioneer Generation Package. The intention of the Pioneer Generation Package is to provide Pioneers with greater assurance so that they do not have to worry about their healthcare costs, including MediShield Life premiums, in their old age. The Pioneer Generation Subsidies for MediShield Life premiums are not based on means and apply equally to all Pioneers. To help with premium affordability, the subsidies increase with age, rising from 40% at age 65 to 60% at age 90. Together with the annual Medisave top-ups for Pioneers, premiums are highly affordable. To Mrs Lina Chiam’s suggestion, I would like to highlight that with the Pioneer Generation Subsidies and Medisave top-ups, Pioneers aged 80 and above will have their premiums fully covered. The Government also provides annual Medisave top-up to all eligible elderly Singapore Citizens aged 65 and above under the GST-Voucher to support their medical needs. Younger Pioneers can tap on this to further offset MediShield Life premiums if needed.

13. No one, especially our Pioneers, will lose their MediShield Life coverage due to the inability to pay for their premiums.

14. Third, there will be Additional Premium Support for Singaporeans, including Pioneers, who need further help with their premiums even after premium subsidies. We would like to assure Members like Ms Tin Pei Ling and A/Prof Fatimah Lateef that the Government will proactively reach out to Singaporeans, including Pioneers, who have insufficient Medisave balances and insufficient family support, and assess if they need Additional Premium Support. In line with the principles of family support, eligibility criteria for Additional Premium Support will take reference from the principles of Medifund, to assist the needy with limited self and family support. Mr Karthikeyan expressed concerns about individuals who are temporarily facing financial distress. I would like to assure Members that flexibility will be exercised for individuals who need help because of their unique or sudden unfortunate circumstances. Dr Amy Khor mentioned in her speech how we will work with relevant agencies and organisations to reach out to the genuinely needy to provide them with timely help. We will do what we can to ensure that those who need the help will get it.

15. In response to Ms Jessica Tan’s query on what measures will be in place to help PRs who are facing financial difficulty and are unable to afford premiums, I would like to clarify that eligible PRs can also receive premium subsidies, at half the subsidy rates for citizens.

16. Fourth, there will be Transitional Subsidies to help Singapore Citizens ease the transition from MediShield to MediShield Life in the initial four years. We announced last year that the Transitional Subsidies will offset the increase in payable premiums in the first four years of the Scheme (that’s after taking into account Premium Subsidies), with subsidy rate of 80% in the first year, 60% in the second year, 40% in the third year and 20% in the fourth year. In the fifth year of MediShield Life, after Transitional Subsidies have been phased out, lower-to-middle income households will still continue to benefit from Premium Subsidies.

17. Dr Chia Shi-Lu has expressed concerns about transition and asked if we can provide greater help. This shift to MediShield Life is an important step and I am pleased to announce that to further ease the transition, the Government will increase the Transitional Subsidies it will provide to Singapore Citizens for the first two years of the Scheme. In the first year, all citizens who face an increase in their net premiums will be subsidised 90% of the net increase in premium, followed by 70% in the second year. This is higher than the earlier announced rate of 80% and 60% for the first and second year respectively. The transitional subsidy rate for the third and fourth years of the scheme will remain at 40% and 20% respectively. What this means is that Singapore Citizens moving from MediShield to MediShield Life will pay only 10% of the net premium increase in the first year, or less than $3 per month, while enjoying significantly enhanced benefits under MediShield Life. 

18. Many Members have asked questions about the facilitated eligibility checks and the safeguards in place to protect individuals’ information. Sir, allow me to briefly reiterate that MOH intends to extend MediShield Life subsidies to all eligible Singaporeans as conveniently as possible, especially the subsidies for lower- to middle-income Singaporeans. The MediShield Life Bill provides the framework for this approach and enables us to provide subsidies to those who are vulnerable and may find it difficult to apply for subsidies themselves.

19. Dr Janil asked when individuals can opt in for the facilitated eligibility checks. They can apply any time, and will take effect from the next policy renewal date.

20. A/Prof Fatimah Lateef, Mr Gerald Giam and Ms Jessica Tan voiced their concerns about safeguards in place to protect individuals’ information. As shared earlier, stringent safeguards are in place to protect the information from unintended or inappropriate uses. First, only authorised persons will be allowed to access, use or disclose medical and financial information for the specified purposes. These purposes are set out clearly in clauses 26 to 28. They will be required to sign appropriate undertakings. Second, the Minister in charge of the agency that controls the information requested will have to approve the disclosure of that information, and can impose appropriate terms and conditions. Here, I wish to clarify with Mr Gerald Giam on his query on Clause 30.  Clause 30 in fact relates to the power of the Minister concerned to impose appropriate terms and conditions in order to safeguard the information, such as stipulating access controls.  It is not, as Mr Giam supposed or implied, to give the Minister broad powers to approve access and disclosure of information. This is for the Minister in charge of the information, in addition to the Minister for Health who is in charge of Medishield Life. For example, the Ministry of Health requires information from another Ministry, the Minister of that Ministry has to approve, before I can have access to the information.

21. In response to Mr Giam’s query on cyber security standards, MOH/CPFB will continue to adhere to the Government cyber security standards and these standards include a range of internal processes and technical safeguards.

22. Third, clause 29 of the Bill makes it an offence for any person to access, use or disclose information about an individual obtained under Part 5 of the Bill without authorisation or the written consent of the individual concerned. Offenders may be punished with a fine of up to $5,000 or imprisonment of up to 12 months, or both. In response to Mr Alex Yam’s query on the sufficiency of this punishment, this is in line with similar offences under the Pioneer Generation Fund Act.

23. In response to Mr Gan Thiam Poh’s query on whether authorised persons will be allowed to check individual’s credit records with banks, we would like to assure the Member that the eligibility checks for MediShield Life premium subsidies will only extend to existing income records within Government databases. These will not extend to private or commercial records, including any bank or credit records.

24. Ms Chia Yong Yong asked about the handling of information by appointed insurers and the differences between Section 59 of the CPF Act and Clause 37(8) of the Bill.  Under Section 59 of the CPF Act, information is shared with insurers today to enable them to administer Integrated Shield Plans for their policyholders and enable the use of Medisave for these plans. Clause 37(8) enables this sharing of information to continue. In addition, Clause 37(8) tightens the scope of disclosure compared to Section 59 of the CPF Act, where the Minister’s approval is needed before information can be passed to insurers. All insurers remain bound to handle information securely on behalf of their policyholders under the Personal Data Protection Act, as should be the case for all information that they handle for all policyholders.

25. The Member also asked about the retention of section 56A in the CPF Act. CPFB previously administered plans that provided higher coverage than basic MediShield. These plans were transferred to NTUC Income after a competitive tender in 2005. Section 56A needs to be retained to support this transfer as well as to preserve continuing obligations on NTUC Income with regards to the transfer and certain subsections under section 56A that have continuing application.

Caring and Progressive Society

(II) Those Who Are Able Should Do Their Part

26. While Members generally support having appropriate penalty and premium recovery measures in place to ensure social responsibility in premium payment, several have voiced their concerns on whether sufficient efforts will be done to help Singaporeans pay premiums, so that the measures will not be unfairly imposed on those who intend to pay but either cannot afford to or simply forget to do so. I would like to assure Members that we will make premium payment as convenient for all Singaporeans as possible, by putting in place a comprehensive framework of measures. This is also to ensure that penalty and premium recovery measures are only targeted at those who have the means, but wilfully refuse to respond to payments for extended period of time.

27. The premium payment framework will involve the following measures.

28. First, we will facilitate payment of premiums by other immediate family members, such as parents and spouses, so that they can use their Medisave to pay for their loved one’s premiums. Mr Hri Kumar has asked about the reference to premiums payable by “other persons” in clause 4(2)(b) of the Bill, and if an individual  can object to the deduction of another person’s premiums from his Medisave account. We would like to clarify that, today, Medisave may be used to pay for health insurance premiums for yourself and your immediate family members, such as your spouse, children and parents. Clause 4(2)(b) supports this process. When we facilitate the payment of premiums by any of these family members through Medisave, the family member will be notified before his Medisave monies are deducted, and he may elect to cancel this arrangement if he wishes to do so.

29. In the case of children below age 21, parents are liable for the premiums of their children. They will be required to pay for their children’s outstanding premiums, through deductions from their Medisave accounts, or other means. A/Prof Fatimah Lateef asked about the definition of “parent” in clauses 4(3) and 5(5) of the Bill, in the context of a single lady who is not legally married but has decided to have a child of her own. I wish to clarify that in the situation described by A/Prof Lateef, the single lady will be responsible for the child’s premiums, as the parent of the child. I would like to add that citizen babies born on or after 26 Aug 2012 will receive a $3,000 Medisave grant under the Marriage & Parenthood Package, which can be used to help pay for their premiums. Mr Baey Yam Keng was concerned that this Medisave grant would not be sufficient to cover the premiums incurred by a young adult in his initial years when he may not yet have the financial means to pay. I would like to assure the Member that immediate family members, including parents of the young adult, are allowed to help pay for his premiums if he runs out of Medisave balances. If the family is in trouble or facing financial difficulties, additional financial support is available.

30.  Second, for those who have missed premium payments due to insufficient Medisave balances or family support, notices and reminders will be sent to give them sufficient time to respond or make arrangements to pay.

31. Third, for those who need further help with their premiums even after premium and transitional subsidies, the Additional Premium Support is available to help them.

32. A/Prof Fatimah Lateef and Ms Chia Yong Yong were concerned that adults who are mentally incapacitated may face difficulty paying premiums, and even more so if they come from low-income families. So, while adults are liable for their premiums, for those who are unable to pay, we will encourage and facilitate family support and for their immediate family members to pay for their premiums. For low-income needy families who are unable to afford premiums even after all the premium subsidies, we will make Additional Premium Support available to them.

33. While the Government will do our best to help the needy, including the elderly referred to by Dr Lee Bee Wah, afford their premiums, all Singaporeans should play their part to ensure that their Medisave accounts have sufficient balances for premium payment, and respond to notices for alternative payment arrangements and Additional Premium Support. If an individual repeatedly fails to pay premiums or respond despite multiple notices and reminders, we would have to impose penalty for late payment to be fair to the rest of the Singaporeans who pay their premiums on time.

34. Let me emphasise that the premium recovery framework and penalty are directed at a small group of freeloaders who are wilful defaulters and do not contribute their share, even though they can afford to. They will continue to be covered under MediShield Life, and their debts will be unfairly shouldered by those who have paid their share responsibly. Appropriate premium recovery measures and penalty will have to be in place to deter freeloaders. In response to Mrs Lina Chiam’s concerns about the recovery bodies that would be engaged to collect outstanding premiums, I would like to clarify that we will be appointing the IRAS and the CPF Board as recovery bodies, as I mentioned earlier.

35. A/Prof Fatimah Lateef and Mr Hri Kumar reminded us about the need to be mindful of the cost and effectiveness of various recovery measures, when recovering premiums from wilful defaulters. We would like to assure Members that the various premium recovery measures will not be imposed mechanically, but with discretion and flexibility. We will seek direction on this from the MediShield Life Council when it is formed.

36. Dr Lee Bee Wah was concerned that recovering outstanding premiums from joint moneys might not be fair to the other party who jointly own the moneys. Clauses 13(4) and 13(7) allow an owner of the joint moneys to surface their objections regarding the amount to be deducted from the joint accounts.

37. Mr Ang Wei Neng suggested recovering premiums not just from Medisave account, but also from Ordinary and Special Accounts. Monies in the CPF Ordinary and Special Accounts are set aside to help with other daily living needs in retirement and we will not tap the protected monies in these accounts. However, we wish to clarify that premiums can be deducted from any CPF monies that are withdrawn as cash.

Ensuring Sustainability in Healthcare System

38. Several Members have shared their concern on the potential for the over-consumption of medical treatment under MediShield Life, and the sustainability of MediShield Life and Government subsidies. These are important concerns and I thank the Members for raising them. To manage over-consumption and over-provision of treatment, MediShield Life retains deductible and co-payment components to safeguard against the “buffet syndrome”. We will continue to carefully monitor claims.

39. Ensuring the provision of cost-effective and sustainable care is a larger journey that involves more than MediShield Life. We can do more with everyone’s help. All of us, patients, healthcare providers, insurers, family members, need to do our part. For example, healthcare providers should provide care that is appropriate and not over-prescribe tests or medication, and help to guide patients in making wise and cost-effective treatment choices. More expensive does not mean better as highlighted by Dr Lim Wee Kiak. CPFB and private insurers need to continue to carefully monitor claims for inappropriate or excessive treatment. Most importantly, all of us can encourage each other to make healthy choices, such as eating healthly, wisely and exercising regularly.

40. Dr Lily Neo has suggested building some incentives akin to the No-Claim Bonus into MediShield Life Scheme, to encourage Singaporeans to stay healthy. This was also raised by those who participated in the MediShield Life review. The MediShield Life Review Committee weighed the pros and cons and decided that there are better ways to promote healthy lifestyles. They were concerned that with incentives like the No-Claim Bonus, patients might delay treatment to maintain their No-Claim Bonus, which could result in serious consequences. Moreover, the need for medical treatment may not always be avoided even when good care is taken, such as when accidents occur or for congenital conditions. Introducing incentives in the Scheme may unduly penalise these patients even when it is no fault of theirs.

41. The Ministry will also play its part. We encourage patients and doctors to bear in mind cost-effectiveness even as they seek out newer treatments. We work with clinicians to develop clinical protocols and guidelines. This is to encourage cost-effective treatment of patients and choice of drugs. Hospitals are required by law to provide financial counselling at the point of admission to help patients make informed decisions.

42. Many have also spoken about the sustainability of the scheme and of the subsidies. It is important that the MediShield Life Fund is sustainable and therefore it must strike a careful balance between benefits and premium affordability.

43. The Government has in fact committed to support the premium subsidies for the lower and middle income. We will continue to be prudent in managing our resources to ensure that the Government is able to sustain these subsidies.

44. Members have also asked about the benefits of the scheme, such as whether claims can be paid for self-inflicted injuries or whether benefits can be extended to new areas. MediShield Life does not cover self-inflicted injuries so as not to encourage such behaviour. But, if the injuries arose from mental illness, as mentioned by Ms Chia, we will review their coverage on a case by case basis.

45. Some asked about the need for integrated plans. My Ministry has suggested three key factors to consider. I would encourage Singaporeans to consider carefully, whether you really need the integrated plan and whether you are prepared to pay higher premium, not just when you are young, but also when you are old. Ms Penny Low has also cautioned against overspending on IP policies, and as a result, depleting Medisave. With the substantial enhancements, MediShield Life will be adequate for the vast majority of Singaporeans. Therefore, consider very carefully when you think about integrated shield plans.

46. Dr Lim Wee Kiak suggested that the MediShield Life Scheme also covers palliative care, medication, outpatient mental treatment and preventive dental and eye screenings. The Member is among many who hope for MediShield Life to include additional benefits. We have already taken a significant step from MediShield with the benefits proposed by the MediShield Life Review Committee last year. We will continue to review how we can improve MediShield Life in future, but there is a need to balance premium affordability and benefit coverage. In the meantime, there are also other forms of subsidies, such as those under the Community Health Assist Scheme, which can help Singaporeans with other healthcare expenses.

Conclusion

47. Let me conclude. Many Singaporeans who took part in Our Singapore Conversation and the focus group discussions hosted by the MediShield Life Review Committee supported having a universal national health insurance scheme, not just for the benefits and assurance that it brings to those who are covered, but also for the ideal behind such a national Scheme – that all Singaporeans will come together as a nation to build this healthcare safety net, so that no one is left behind.

48. The debate on this Bill has largely focused on the how and what of the MediShield Life Scheme – how do we carry through the recommendations of the MediShield Life Review Committee and what each of us have to do for this Scheme to work well. It is also important for us to revisit the why – why did we embark on this national health insurance Scheme in the first place. MediShield Life Scheme is the embodiment of Singaporeans’ aspiration for a more inclusive, caring and progressive society. It is this aspiration that guided the development of this Scheme, how we make it easier to extend help to the vulnerable and the needy, why we include those with pre-existing conditions, how we ensure those who are able will pay their premiums, and the reason for wrapping up the debate in these themes.

49. The Government will do our best to support all Singaporeans in this significant shift to MediShield Life and the Bill is designed with this in mind. We are facilitating premium payments and eligibility checks for subsidies so that the vulnerable groups among us will receive timely help with minimal hassle. We seek Singaporeans’ understanding and help to work with us in extending the support for those who are less well-off amongst us.  Individuals should continue to play their part to uphold this collective responsibility that many have pledged their support for, which include leading healthy lifestyles and making wise healthcare decisions. This will go a long way in ensuring that premiums will remain affordable for everyone. 

50. I would like to reiterate that this Bill goes beyond providing the legislative framework for the operation of a national Scheme. It is a Bill that provides many firsts in the Government’s efforts to help Singaporeans fulfil their aspiration. Like many first steps, there will be lessons to learn from and things to improve on. We will work with Singaporeans to bring the Scheme closer to our vision as we move forward. If there are hiccups along the way, I’m sure there will be, please bear with us as we do our best to fix them as quickly as we can. Our common aspiration is clear, and journey towards it has begun. I would like to urge the Members of the House to give your support to the MediShield Life Scheme Bill, and join us in this journey towards a more inclusive, caring and progressive society.

51. Sir, I beg to move.