MEDISHIELD LIFE SCHEME (AMENDMENT) BILL 2ND READING – CLOSING SPEECH BY MDM RAHAYU MAHZAM, MINISTER OF STATE, MINISTRY OF HEALTH

Introduction

1. Mr Speaker, I thank the Members for their questions and comments on the MediShield Life Scheme (Amendment) Bill.

2. Members have also raised questions on the changes to the MediShield Life that were announced last month as part of the 2024 review. Let me briefly address these questions, before moving on to the comments relating to the Bill.

MediShield Life 2024 Review

3. As the Members have pointed out, this review of MediShield Life is a significant one. The Government has accepted the recommendations made by the MediShield Life Council and we will be making three changes to the scheme:

a. First, we will ensure MediShield Life coverage remains adequate for Singaporeans, given the rise in healthcare costs. We are most concerned about major health episodes that result in large medical bills and cause financial strain. Therefore, MediShield Life’s claim limits will be increased to better protect Singaporeans against such bills.

b. Second, healthcare is increasingly delivered outside of the hospital, in the community and home settings. This is more convenient for patients and their family members. To support this shift, we will enhance outpatient coverage significantly to include treatments such as for depression.

c. Third, technological advancements have enabled the emergence of novel drugs such as Cell, Tissue and Gene Therapy Products. While these have the potential to cure serious diseases, many of them are very expensive. Insurance, like MediShield Life, is a suitable way to finance such treatments which are costly but have a low incidence rate. Therefore, MediShield Life’s coverage will be extended to selected high-cost treatments that are clinically- and cost-effective.

4. With the enhancements in coverage, it is inevitable that premiums have to go up. However, the Government is committed to helping Singaporeans manage the premium increase and will provide an additional $4.1 billion in support measures, comprising MediSave top-ups and premium subsidies, for the next three years. This will more than offset the total increase in premiums of $1.8 billion over the same period. For more than nine in ten Singaporeans, the additional support will more than offset the premium increase over the next three years.

5. Members have raised comments in three broad areas:

a. Affordability of healthcare for patients;

b. Affordability of premiums for policyholders; and

c. Sustainability of the scheme.

6. Let me deal with each of these in turn.

Affordability of healthcare for patients

7. First on affordability of healthcare for patients. Ms Ng Ling Ling, Ms Jessica Tan, and Dr Wan Rizal asked how the MediShield Life Council had selected the new areas that MediShield Life coverage would be extended to in this review, and whether other areas such as pre- and post-hospitalisation treatments or mental health services were considered for coverage in the review.

a. In general, the Council prioritised treatments that had significant affordability gaps, were suitable for risk-pooling, clinically- and cost-effective, and supported the shifting of care to lower-cost settings. This includes expansion of coverage to repetitive transcranial magnetic stimulation which is used to treat depression. We will also be raising the MediShield Life psychiatric ward limits by about 40%, from $160 per day to $230 per day.

b. In making recommendations on where to enhance or extend coverage, the Council strikes a fine balance between improving patient affordability and premium impact.

c. That is not to say that patients do not have support for their pre- and post-hospitalisation needs such as consultations or scans, when seeking subsidised care at our public healthcare institutions. Patients can already access a combination of subsidies and MediSave, where applicable, for these. Likewise for other mental health services.

8. Ms Ng Ling Ling and Ms Jessica Tan also asked about the impact of the deductible changes on patients, especially the lower income.

9. The inpatient deductible has not been adjusted since the introduction of MediShield Life in 2015. With rising medical bills, the deductible has become less effective in sieving out smaller more affordable bills that can be paid for by MediSave. The revision in deductibles will refocus MediShield Life’s coverage on larger medical bills, which in turn will moderate the premium impact. With significant enhancements to outpatient coverage and home-based medical care, we will also introduce a new outpatient deductible of $500. This will keep the scheme focused on larger outpatient bills and ensure premiums remain sustainable.

10. The Government will raise MediSave withdrawal limits in tandem with the MediShield Life changes, to help patients pay for the higher deductibles.

11. I understand the Members’ concern about the lower-income households and seniors who may not have sufficient MediSave. The MediSave top-ups by the Government will provide some help for these more vulnerable groups. I also wish to assure the House that Singaporeans who face difficulty affording their bills after subsidies, MediSave and MediShield Life, can apply for financial assistance such as MediFund. No one will be denied access to appropriate healthcare due to an inability to pay.

Affordability of premiums

12. Second, on premium affordability.

13. Ms Ng Ling Ling asked how vulnerable groups such as the lower-income, elderly, and those with chronic conditions, will be supported in affording their premiums. I wish to assure the Members that we have taken special care to support them.

a. As announced by the Government earlier, premium increases will be capped at 35%, which mostly benefits older age groups. Premium increases will also be phased in evenly over the next three years to help all policyholders.

b. On top of this, older Singaporeans in lower- to middle households will also benefit from the means-tested premium subsidy enhancements that were recently announced. They will receive higher means-tested premium subsidies of up to 60%, from up to 50% today.

c. Seniors, including those with lower MediSave balances, will also benefit from additional MediSave top-ups provided by the Government which can be used to pay their MediShield Life premiums. These include an increase in annual MediSave top-up for the Pioneer Generation by up to $300, bringing their maximum annual top-up to $1,200; an enhancement of the one-time MediSave Bonus under the Majulah Package for Young Seniors by $500; and an additional MediSave Bonus of $500 for Young Seniors and the Merdeka Generation with lower MediSave balances.

d. Lower-income Singaporeans who require more support paying for the premiums after subsidies and top-ups may also be invited to apply for Additional Premium Support (APS), which will fully cover their premiums for the next two years.

e. With this package of support, most seniors, regardless of income, will have their premium increases fully offset over the next three years. In addition, the MediShield Life premiums of older Pioneer Generation seniors will continue to be fully covered.

14. Mr Yip Hon Weng, Ms Jessica Tan, and Mr Gerald Giam also asked how lower-income individuals who are living in or owning properties with high annual value, or AV, will be supported.

a. It is true that such individuals receive lower means-tested premium subsidies on account of their higher AV properties. This is because those who live in properties with a higher AV would generally be better off than those who live in properties with a lower AV. While this approach is not perfect, it strikes a balance between being more precise in assessing applicants' means, while keeping the process simpler for most applicants.

b. However, the Government periodically reviews the eligibility criteria for subsidies so that Singaporeans with greater needs can continue to receive the support they require. For instance, the AV thresholds were recently raised this year. With this, those staying in or owning these lower-value private properties can still qualify for premium subsidies.

c. Those who need more help or are facing extenuating circumstances may appeal for more assistance, which would be assessed on a case-by-case basis. Let me assure Members that no one will lose MediShield Life coverage due to an inability to pay premiums.

Sustainability of the scheme

15. Lastly, sustainability of the scheme.

16. Ms Ng Ling Ling and Dr Wan Rizal have commented about rising healthcare costs and the impact to the long-term sustainability of the MediShield Life scheme, especially with the expansions of MediShield Life coverage. This is indeed an area that the Government is committed to addressing. We have implemented various strategies on this front.

17. First, we have been re-designing the healthcare system to better support right-siting of care from our acute hospitals to other settings such as the outpatient, community and home settings where one can receive the same care at lower costs. Our enhancements to MediShield Life coverage through the recent review will also support patients in accessing care at such settings.

18. Second, we have been applying Health Technology Assessments to more high-cost technologies and drugs. This allows us to rigorously assess that a new treatment is clinically- and cost-effective before we extend financing coverage to it. This also allows the Government to negotiate for more competitive prices from industry, moderating the cost impact to our system.

19. Third, and most important, is our increased focus on staying healthy. This is why we have Healthier SG, which is our national initiative focusing on preventive health and chronic disease management. We have introduced premium discounts in this review, to complement our national efforts to incentivise healthier living, where Healthpoints can be redeemed for MediShield Life premium discounts.

20. I am glad that Ms Ng Ling Ling is supportive of this idea, and has raised useful suggestions such as broadening the range of activities that qualify for incentives and implementing a system to encourage sustained activity. We will take all of these into account as we study the outcomes of this pilot, before deciding whether to make the scheme permanent.

21. I thank Members for their support of the MediShield Life changes. These will go some way in providing relief for Singaporeans amidst rising healthcare costs.

a. Premiums will need to go up, but we have provided a significant package of support that offsets premium increases for more than nine in ten Singaporeans over the next three years.

b. The Government will continue to work with the MediShield Life Council to review the scheme regularly, to ensure that it remains a source of assurance for large healthcare bills and that its premiums remain affordable for Singaporeans.

c. At the same time, we will continue to press on with our efforts to keep our healthcare system sustainable for many years to come.

22. I will now move on to address Members’ questions and comments on the MediShield Life Scheme (Amendment) Bill.

23. Let me address them according to the three areas of amendments we are making to this Act.

Expand coverage to new models of care

24. First, on supporting the expansion of coverage to models of care received outside the physical premises of providers.

25. As mentioned earlier, we will enhance MediShield Life to cover more types of care, such as home-based medical or telehealth services delivered outside of the traditional hospital setting. This will allow more patients to receive the care they need in a more convenient way.

a. Going forward, we expect to see the emergence of more care models where treatment or services are completely delivered outside of a physical medical institution. These care models may eventually become the standard of care. The MediShield Life Council will review the coverage of MediShield Life from time to time, and recommend to the Government if it would be appropriate for the scheme to cover treatments and services offered under these models.

b. This Bill will provide flexibility for MediShield Life to cover such treatments and services in future, where we so decide to, which will allow patients to make claims for these treatments and services.

c. To Mr Yip Hon Weng’s query on how patients can know which services are claimable under MediShield Life, I would like to share that new approved medical treatment or services, including home care and telehealth services, will be publicised through the MediShield Life Council’s report, on the MediShield Life website, and be stated clearly in the MediShield Life Scheme Regulations 2015.

26. In addition, the expansion of the scheme’s coverage will be complemented by amendments setting out the framework for approvals, and suspensions and revocations of approvals, of medical institutions under the scheme.

27. Mr Gerald Giam spoke about the criteria for approval of medical institutions. This framework will allow the Ministry of Health (MOH) to continue safeguarding and ensuring the appropriate use of MediShield Life monies, while maintaining a clear and robust framework for managing medical institutions participating under the scheme.

a. For instance, to be approved, the medical institution will need to have a valid license issued under the Healthcare Services Act 2020. The scope of the medical institution’s approval under the scheme is also tied to the specific licensable healthcare services that it is authorised to provide by its licence, as well as their respective service delivery modes.

b. The key appointment holders of the medical institution, as well as any medical practitioner that is employed or engaged to provide the approved medical treatment or services in that medical institution must also not be found to be in breach of certain requirements, such as being convicted of an offence involving fraud or dishonesty.

c. The Minister for Health may also impose conditions of approval, which could include requiring the medical institution to ensure that MediShield Life claims are submitted in accordance with the relevant claim rules.

28. Mr Yip Hon Weng raised concerns about the broad powers for approvals, suspensions and revocations, and how they will affect patients currently receiving treatment and services. Similarly, Mr Neil Parekh also asked how the conditions of approval would apply and be communicated, whether there would be continuity of coverage for insured persons under the new framework, as well as the processes in place for the approval or rejection of applications, or for appeals related to revocations. Let me touch on all of these issues together.

29. First, as stated in my opening speech, the Minister is empowered to grant approvals to medical institutions under the new amendments. Unless there are extenuating circumstances, medical institutions that have existing approvals as of the date immediately before the amendments come into effect, can be approved in respect of approved medical treatment or services that are or are part of their existing licensable healthcare services and respective service delivery modes. Hence, to address Mr Yip Hon Weng’s and Mr Neil Parekh’s concerns about continuity of care, we do not expect the care of existing patients to be disrupted by this transition.

30. Second, enforcement measures can now also be tailored to respond to specific medical institutions, or specific treatments or services offered by them that fail to comply with the requirements or their conditions of approval under the MediShield Life Act.

31. With this, when we take action against the medical institution for other treatment or services which are not provided in compliance with the Act, we can still safeguard the patient’s ability to continue making claims for approved medical treatments or services that are provided in compliance with the Act.

a. Let me illustrate how this works. A single medical institution today may be delivering multiple care models or treatment through different licensed healthcare services or different service delivery modes.

b. Today, enforcement measures taken against an approved medical institution in a non-compliant area would involve suspending or revoking the approval of the entire medical institution.

c. The amendments, however, will allow the Minister for Health to suspend or revoke the approval given in respect of a specific medical treatment or service provided by a medical institution. This could be when a non-compliant service delivery mode is used by the medical institution. The approval for the medical institution to submit claims for other treatments or services via other delivery modes remain valid, and patients can still be covered by MediShield Life.

32. Mr Yip Hon Weng asked if there would be transitional arrangements in situations where approvals to medical institutions are suspended or revoked, to avoid disruptions to ongoing care of patients.

a. The amendments require medical institutions providing any non-compliant medical treatment or services to inform all patients of the suspension or revocation of approval of such medical treatment or services immediately.

b. Claims made by patients for such treatment or services provided before the suspension or revocation will continue to be processed without issue.

c. The Minister for Health can also permit claims for such treatment or services provided during the suspension or after the revocation, if necessary, to safeguard the patient’s interest. This power to safeguard MediShield Life monies will be exercised judiciously, to minimise any undue care disruptions to patients.

33. Third, let me assure Members of the House that there are safeguards in place to ensure accountability and due process.

a. To Mr Neil Parekh’s question, the conditions for approval will be made clear to medical institutions, and we have provided clear grounds for when approvals may be suspended or revoked under the Act. These include circumstances where the approval has been obtained fraudulently or if the licence granted to the medical institution under the Healthcare Services Act 2020 to provide the licensable healthcare service that the approved medical treatment or services is or is a part of has also been revoked or suspended.

b. For these reasons, we do not think it ideal to include statutory consultation requirements before restricting service delivery modes, as Mr Yip Hon Weng has suggested. In cases where patient safety is at risk or where the provider has committed fraud, restrictions of coverage will likely need to be immediate.

c. That said, any restriction of service delivery modes will be exercised judiciously and only applied where the conditions of approval have been breached. In addition, in suspending or revoking an approval, the medical institution concerned must be given written notice and a reasonable opportunity to make representations as to why the approval should not be suspended or revoked, which is already our practice today.

34. Dr Syed Harun also asked that we engage private medical practitioners to support them in navigating these changes. Indeed, private providers are an important part of our healthcare ecosystem. We will continue to partner and educate them on these changes.

35. Altogether, the amendments in this category allow MediShield Life to be more flexible and responsive to the evolving healthcare landscape.

Strengthening provisions to support premium recovery efforts

36. The Act also needs to be amended to better support premium recovery.

37. For a universal scheme like MediShield Life, premium recovery is necessary to discourage policyholders who can afford to, but wilfully decide not to fulfil their premium obligations. This in turn keeps the scheme sustainable.

a. Without a robust set of premium recovery measures, it is entirely possible that premium defaults could go up, translating to bad debts which could materially impact the Fund and result in higher premiums for all.

b. This would be unfair to policyholders who have paid their premiums and undermines collective responsibility.

38. Over the years, the premium default rate, which is the total premium debt as a proportion of the total premiums payable, has remained low, below 1%. This means that the vast majority of policyholders are able to pay their premiums. This is made possible through a comprehensive support system to help Singaporeans, especially those of less means, with their premiums, thereby reducing the likelihood of individuals defaulting in the first place. I had covered these in detail earlier in my speech.

39. Even with these support measures, there will be a small group of individuals who do not fulfil their premium obligations. When deduction of the premium from the policyholder’s or his designated payor’s MediSave fails, the Government embarks on a series of premium recovery measures.

a. Family members, such as parents and spouses, will be identified to pay for their loved ones’ premiums using MediSave, on an opt-out basis. Those notified may choose to cancel this payment arrangement if they do not wish to help with their family members’ premiums.

b. Eligible individuals will also be invited to apply for Additional Premium Support. MOH works with the Ministry of Social and Family Development to conduct proactive outreach to low-income, elderly individuals who may need help with their APS applications.

c. Quarterly reminder letters are also sent to remind policyholders to top up their MediSave accounts, change the premium payor or arrange for monthly instalment payment plan for their owed premiums.

d. Significant efforts are made to ensure that those who are genuinely in need receive support to pay their premiums. Only when these efforts are exhausted, would premium enforcement commence.

Introducing provisions relating to service of documents

40. Before any enforcement action can be taken against defaulters, a demand note must first be served.

a. A demand note notifies defaulters of their outstanding premiums and gives them sufficient time to pay their premiums, before interest and penalties are imposed and further enforcement measures like agent appointments are taken. These measures take reference from income tax recovery measures and are already provided for in existing legislation.

b. The Inland Revenue Authority of Singapore (IRAS), which is a prescribed recovery body under the MediShield Life scheme, sends the demand notes via mail, as provided for under the legislation.

41. However, there are some defaulters who are difficult to reach via post.

a. This includes (i) individuals who do not update their residential or correspondence addresses with the Government after they renounce their Singapore citizenship or lose their Permanent Residency status; as well as (ii) individuals residing overseas in areas with unreliable postage services.

b. As demand notes are often not successfully delivered to such individuals, enforcement against this group is limited in effectiveness.

42. Therefore, the Act amendments provide for more avenues through which demand notes may be served, including via digital means. So, to address Mr Gerald Giam’s concern, this is actually on top of existing means such as the physical mail. This maximises the likelihood that recovery bodies can serve demand notes on defaulters who do not maintain a valid postal address. We will leverage on two additional avenues:

a. One, the Bill will provide for demand notes to be served via email.

b. Two, the Bill will also empower the Minister to make regulations to allow demand notes to be served via existing electronic service platforms. This could include IRAS’ myTax portal and the Central Provident Fund Board’s (or CPF Board) my cpf portal. We will work with both agencies to explore the feasibility of tapping on their electronic service platforms.

43. This is a fair approach:

a. Singaporeans already use these portals to manage their tax- and CPF-related matters, and it is reasonable for the Government to make contact with them through such channels.

b. We will explore with IRAS and CPF Board on the feasibility of sending notifications through SMSes and emails, to ensure demand notes are brought to the attention of the recipients.

Enabling access to means information for premium recovery efforts

44. As I mentioned earlier – everyone must pay their premiums as part of our collective responsibility to one another, and to ensure the sustainability of the scheme. This is why we have a strong set of recovery and enforcement actions in place.

45. However, we are mindful that some Singaporeans may face difficulties paying for their premiums due to complex circumstances. Hence, we adopt a compassionate stance towards premium recovery and enforcement. This way, we do not inadvertently cause hardship to those who are unable to meet their premium obligations. For example, we withhold enforcement from vulnerable groups as such elderly above the age of 85 years old.

46. One proxy for an individual’s ability to pay their premiums is their means information. The proposed amendment will support the use of means information to enable a calibration of our premium recovery and enforcement efforts when it comes to Singaporeans with genuine difficulty in affording their premiums.

47. Mr Yip Hon Weng asked about how such means information could be used, the criteria used to calibrate enforcement efforts, and whether such criteria would reduce accessibility for individuals that do not meet the bar.

48. Mr Gerald Giam also raised concerns that some Singaporeans with complex circumstances may face difficulties paying premiums, and this is precisely why we are creating this avenue to allow for a more calibrated approach. I would like to assure the Member that the intent of this amendment is not to withhold subsidies and support from Singaporeans. On the contrary, it is meant to help Singaporeans – by ensuring that premium enforcement measures are targeted at those who have more means, while calibrating enforcement measures for those who have less means.

49. Means information is used to derive per capita household income (or PCHI). This is aligned to many other government schemes that differentiate subsidies based on PCHI to ensure that resources are targeted at those who need more support. We acknowledge the Member’s concern that this may not differentiate retired seniors with different financial situations, including those who are asset-rich and cash-poor.

50. This is why we have APS, which serves as a discretionary safety net, to give support to those who may have fallen through the cracks and face genuine difficulty affording their premiums.

a. Eligibility for APS is assessed holistically with appeals considered on a case-by-case basis, taking into consideration the unique social and financial circumstances and needs of individuals.

b. Individuals receiving APS will have their outstanding premiums, as well as premiums for the next two policy years fully covered. Premium enforcement would not apply to them.

c. For individuals who do not qualify for APS, we will exercise flexibility for those with extenuating circumstances, on a case-by-case basis. For instance, we may delay premium enforcement until their financial circumstances improve. If some require a longer time to pay their premiums, they may contact the CPF Board, which oversees premium collection, to work out an instalment payment plan.

51. For premium enforcement, we work with the MediShield Life Council on detailed criteria as well as the appeal guidelines for cases at the margins, to ensure enforcement does not unfairly penalise such groups. Let me take the chance here to reiterate that no one will lose MediShield Life coverage due to an inability to pay premiums.

Improving administration of the scheme

52. Besides refining provisions to support premium recovery efforts, we are also making some amendments to clarify and strengthen existing administrative processes.

Enabling premiums to be specified on MOH’s website instead of legislation

53. One such amendment is allowing the MediShield Life premium schedule to be specified on a website rather than in legislation. Mr Yip Hon Weng asked about the potential impact of such a move on our less digitally savvy seniors.

54. Let me clarify that this amendment is not meant to change anything about how premiums are communicated to Singaporeans. All policyholders will continue to receive a premium notification letter which details their premiums payable and premium subsidy entitlements for a given policy year. These will continue to be delivered through mail, SMS or email, depending on the policyholder’s contact information available to the CPF Board. So Singaporeans, including seniors, already have many platforms through which to access information about premiums, and this amendment will not change this.

55. Instead, this amendment is simply intended to allow MediShield Life premiums to be published on a website instead of through legislation. In enabling this, we will significantly streamline the administration of the scheme. This is also the approach already in place for other healthcare schemes such as CareShield Life, for which premiums are available online instead of through legislation.

56. Mr Gerald Giam spoke about the stability and predictability of premium rates. The premiums are already published on the website today, and we have also given advance notice for the next policy cycle – it is actually three years’ worth of premiums, in the press release and also in the Council’s report. To also address another administrative point that Mr Gerald Giam raised on individuals who unknowingly provide false or misleading information – actually, such conduct does not amount to an offence under the Act. In addition, we fully acknowledge the need to help Singaporeans, especially our seniors, understand the key healthcare policies such as MediShield Life, and changes that are made to them from time to time.

a. In addition to ongoing efforts to raise awareness and improve public understanding of MediShield Life, MOH is also working closely with various community partners like Grassroots Leaders and Silver Generation Ambassadors to engage Singaporeans on the recent changes to MediShield Life.

b. Such efforts allow us to reach more citizens, including seniors, and ensures that no one is left behind.

Conclusion

57. Let me conclude. The debate has largely focused on how we can ensure that MediShield Life continues to adequately protect Singaporeans against large medical bills, while ensuring that the scheme remains sustainable and premiums affordable for all Singaporeans. This has always been our objective from the initial launch and subsequent reviews of the MediShield Life scheme, and the design of the Act which provides us the legislative framework to operationalise it.

58. This Bill will strengthen the legislative framework to help us better achieve these objectives by:

a. Enabling MediShield Life to provide adequate protection as the healthcare delivery landscape evolves from hospitals to community and home settings;

b. Providing a clear and robust framework to manage medical institutions participating under MediShield Life to ensure that the appropriate use of MediShield Life monies, especially as MediShield Life coverage expands to new treatments and services; and

c. Facilitating the implementation of premium enforcement measures to ensure that everyone pays their premiums as part of collective responsibility to one another and to ensure the sustainability of the scheme.

59. I thank Members for their support of this Bill.

60. Mr Speaker, I beg to move.