Medisave withdrawal limits: MOH replies

MOH's Reply

The Straits Times, 25 March 2014

Medisave withdrawal limits: MOH replies

We thank Mr Tay Kim Lee for his feedback ("Lower Medisave withdrawal limits for IP premiums unfair"; last Friday).

An Integrated Shield Plan (IP) comprises two components - a basic MediShield component and an additional private insurance component.

Similarly, the IP premium also comprises two corresponding components.

However, a single Medisave withdrawal limit applies to the total IP premium today.

The Ministry of Health (MOH) will restructure this limit into two separate components to give greater clarity and certainty.

With the restructuring, Medisave can be used to fully cover MediShield Life premiums after the applicable subsidies, including additional premiums for pre-existing conditions, if any.

This way, Singaporeans will be assured that they can tap into their Medisave to pay for MediShield Life fully.

A new Additional Withdrawal Limit (AWL) will apply specifically to the private insurance component of IPs.

Singaporeans will continue to be able to use their Medisave to pay in full or part of this private insurance component, depending on their age and the type of coverage.

The AWL figure of $50 used in the infographic on March 17 ("Changes to Medisave") was solely for illustrative purposes.

MOH is currently studying the appropriate AWLs to set and we will have to balance between helping Singaporeans pay for their IP premiums using Medisave, and ensuring that they have enough Medisave for their other healthcare needs.

MOH will announce the actual AWLs at a later date.

We encourage Singaporeans to carefully consider the long-term affordability of their preferred plan when deciding if they should get an IP.

Lim Bee Khim (Ms)
Director
Corporate Communications
Ministry of Health

Forum Letter

The Straits Times, 20 March 2015

Lower Medisave withdrawal limits for IP premiums unfair

WHILE I applaud the implementation of MediShield Life, I cannot help but feel that this comes at the expense of Integrated Shield Plan (IP) policyholders ("Changes to Medisave"; Tuesday).

From the risk-reward perspective of the insurer, premiums would have to increase to compensate for the higher risk.

I am glad that the Government is willing to subsidise the premium hike for the first five years.

But what happens thereafter?

Currently, Central Provident Fund (CPF) members up to age 65 can use up to $800 of their Medisave funds annually to pay for their IP premiums.

So, it came as a shock to me to learn that when MediShield Life is launched, under the two-tier Medisave payment system, an IP policyholder with an annual premium of $640, for example, will have to fork out $155 in cash.

Under the current system, this $640 could have been fully deducted from Medisave.

The change is unfair to the IP policyholder who does not have any pre-existing illness and is 100 per cent covered by the IP.

What is wrong with the current system of allowing up to $800 of premiums to be deducted from Medisave?

MediShield Life should be viewed as a basic plan to complement IPs, which provide higher-quality healthcare, especially given today's chronic bed shortages.

But the changes seem to be discouraging IPs, since, when the rider is included, the policyholder will have to fork out so much more in cash than the current situation.

This could result in more people crowding public hospitals, given the lower cost there.

With MediShield Life and full-coverage IPs, there will be less need to tap Medisave to pay for medical bills.

We should be allowed to use the funds accumulating there to pay for IP premiums when MediShield Life kicks in.

Tay Kim Lee