DOORSTOP INTERVIEW BY MR ONG YE KUNG, MINISTER FOR HEALTH, AT THE MEDISHIELD LIFE 2024 REVIEW, 11 OCTOBER 2024

Appreciation to Council

         I want to first thank the MediShield Life Council for working so hard. I think they did a very thorough analysis and came up with very comprehensive recommendations. I want to thank Mrs Fang Ai Lian and the team for their contributions. Also not forgetting the Secretariat, who has been working very hard for over one year to support the Council. 

2.     Let me just go through some salient points of this package of measures, which I think is quite a significant one.

Package of Measures in a Glance

3.     Number one is to recognise the rising healthcare costs. In particular we are most concerned about unexpected health episodes that require you to stay in hospital for a long time, maybe even in the Intensive Care Unit (ICU). Some unfortunate things happen, and you chalk up a big bill that is unexpected. And that bill is rising and therefore we are increasing the claim limits for such bills. 

4.     It is quite a significant increase. For two-day normal ward charges, the claim limits have gone up from $1,000 to about $1,600 – a 50 percent increase. The increase for ICU is significant. It does not happen very often but should it be needed, daily claims have gone up from $2,200 to over $5,000 or more than double. So it is a very good safety net and peace of mind. 

5.     The second salient point is outpatient treatment. That is also rising, and I think it is hurting the pockets of patients, so we are also raising the claim limits for outpatients. In particular, one area we are quite concerned about is kidney dialysis. The costs have been going up. If nothing is done, it is only a matter of time before kidney dialysis patients have to pay cash out of their own pockets for dialysis. So we are increasing the claim limits from $1,100 per month to about $1,700 per month.

6.     Third area is out-of-hospital bills. One major trend in healthcare is that more and more treatments are done outside the hospital, in the community and home settings. We are increasing coverage for such treatments, such as wound dressing, and treatment for depression. This is being done for the first time and some of the services that are done in home settings are now also covered.

7.     Number four is technological advances. New and novel drugs, such as cell, tissue, gene therapy products (CTGTP), can be very expensive, but they are breakthroughs. They are one-time expensive treatments that promise to cure severe diseases like cancer. If we do nothing, chances are, in time only the rich can access these treatments. So we need to bring some of them into both our subsidy as well as MediShield Life framework. 

8.     We have done so for subsidies, provided they are proven to be clinically effective and cost-effective. So just very few drugs but it is a starting point. Today we agree with the recommendations of the Council to also bring these same drugs into the MediShield Life framework. That way, at least for these drugs, all Singaporeans can access them.

9.     Number five is that we are increasing the deductibles. I think it is necessary to do that because that way, we focus the resources and help on the bigger bills which is what we are most concerned about. Your smaller bills will rise a little bit, deductibles will go up, but you can pay for it with MediSave. 

10.     And finally, the Council recommended that with all these changes, strengthening of the claim system and the safety net, premiums will have to go up by quite a significant number. But we should have a comprehensive package of measures to support these increases so that the great majority of Singaporeans can continue to pay for these increases using their MediSave and they do not have to come up with cash from their own pocket. 

11.     We agree with that, and we are doing so. If we take the cumulative increase in premiums across the population, it is $1.8 billion. We have come up with a package that costs $4.1 billion over the next review cycle, which is about three years. So the package far exceeds the increase in premiums. Therefore, in other words, we are taking this opportunity to also build up the MediSave balances for Singaporeans. 

Support Package 

12.     What is this package? Let me elaborate. There are two parts to this. 

13.     Out of this $4.1 billion, $700 million or $0.7 billion, is to increase MediShield Life premium subsidies. Another $3.4 billion is for MediSave top-ups. So added together, it is $4.1 billion.

14.     First on the $700 million of MediShield Life premium subsidies. This will be focused especially on those who are older. The increase is about 5 to 10 percentage points. In the past, the maximum subsidy was 50%, meaning 50% of premiums is subsidised, paid for by the government. That will now increase to 60%, so it will help many people and cost us $700 million.

15.     The MediSave top-ups are much more complicated. What we have done, actually is quite a long exercise. Essentially, we identified every single MediSave Life top-up initiative and tried to strengthen every one of them. Why did we do it that way? I think by so doing, we try to cover as many age groups as possible, practically all age groups. So what are they? 

16.     Let me start with the oldest which is Pioneer Generation (PG). As you know, PG can get MediSave top-ups every year throughout their life. For the older PG who are 90 years this year, born in 1934 or earlier, they will have top-ups that will basically offset all the premium increases. Their top-ups are enough for them to pay their MediShield premiums throughout their lives. For the younger PG, their top-ups will be sufficient to cover two-thirds of the premium increases. 

17.     At last year’s National Day Rally, then-Prime Minister Lee announced the Majulah Package. Basically for all those born in 1973 or earlier – that means it covers PG, Merdeka Generation (MG), as well as the new term, Young Seniors who are in their 50s and 60s – will receive MediSave top-ups. For this whole group, the MediSave top-ups will be enhanced by $500. In the past, the MediSave top-up was $1,500 maximum. Now, the maximum goes up to $2,000.

18.     Third, within a subset of this group, there is a group which is born between 1950 and 1973. These are the MG, as well as the young seniors. They, unlike the PG, do not have any more MediSave top-ups. So, some of them, because of their work history, do not have sufficient MediSave balances. So, for this group we will do something extra for them – an extra $500 per person.

19.     Number four, at Budget 2024 this year, Finance Minister and current Prime Minister announced that a younger group born between 1974 and 2003 will get MediSave top-ups. We will enhance their MediSave top-ups by another $200. For this group, their premiums are not as high because they are relatively younger, so their top-ups are less.

20.     Finally, newborns get a newborn grant of $4,000. The newborn grant will be enhanced to $5,000, so this is sufficient to pay for their MediShield Life premiums up to the age of 21. 

21.     So, this is the package that we are putting out - $4.1 billion over the next few years. 

Encouraging Healthier Lifestyles

22.     The Council has always recommended that we should encourage Singaporeans to lead healthier lifestyles. This year, they went a bit further. Since we have Healthier SG, they asked why not link the two together.

23.     It makes a lot of sense, because adopting a healthier lifestyle is something we can choose to do. We can do more exercises, eat healthy, sleep better, quit smoking, sign up for Healthier SG and go for regular screenings. All these are within our control, and if we do them, we get a discount on our MediShield Life premiums.

24.     We decided to try this out. After all, many Singaporeans have already joined the Health Promotion Board’s Healthy 365 programme to collect Healthpoints.

25.     From the third quarter of 2025, we will start to allow Singaporeans 40 and above to use their Healthpoints and convert them to discounts or deductions in MediShield Life premiums. 

26.     We will work in a fairly favourable conversion rate. All in all, this means that if you are someone who is quite active, who exercises for about 30 minutes every day, you should have enough Healthpoints to receive a discount of about $80 per year off your annual MediShield Life premium. For a young person, this discount is slightly less than or almost half of their premium. So this is the whole package. 

Multiple Layers of Safety Net

27.     It has been many months in the making. Late last month, I announced the change in our effective date of the change in our subsidy system.

28.     Essentially we are changing the per capita household income (PCHI) thresholds, such that more Singaporeans are eligible for higher subsidies. 1.1 million Singaporeans will benefit. 

29.      Today, we are strengthening our MediShield Life system as well as the MediSave system. This is our classic S+2M framework. We are strengthening both and it is very important that these two safety nets work hand in hand.

30.     There are many countries that focus a lot on subsidies. When you focus a lot on subsidies, it is funded by taxation. When funded by taxation, things tend to be cheap or free and this causes excess demand, so waiting time becomes very long in the hospitals and the clinics. While it is very affordable, it is not very accessible. 

31.     Then there are other countries who focus a lot on insurance. Insurance has much less of a problem of excess demand, because when you fall sick, you have to file a claim, and there is a certain discipline in the application process around it. It is accessible, but, if you do not have insurance, it is not affordable. So all countries, in the end, realise you have to have both subsidy and insurance. 

32.     That is what we have done. S+2M has worked well for us and we will continue to improve our system.