New CareShield Life Scheme: Higher & Lifetime Payouts, with Government Subsidies

Government Accepts Recommendations of ElderShield Review Committee

            The Government has accepted the recommendations of the ElderShield Review Committee (ESRC) on changes to the scheme to better address the long-term care needs of our ageing population.

2          The introduction of the enhanced scheme – CareShield Life – will be a major step in supporting the basic long-term care needs of Singapore residents with severe disability. Compared to ElderShield, CareShield Life will have higher and lifetime payouts.

3          The Government plans to implement CareShield Life in 2020 for future cohorts. Those aged 30 to 40 in 2020¹ will be the first cohorts to join the scheme.  Subsequent future cohorts² will join the scheme when they reach the age of 30. The Government will provide premium subsidies and financial support to ensure that the scheme is affordable and nobody will lose coverage because of an inability to pay.

4          Existing cohorts³ can choose to join the scheme from 2021. The Government is also looking into measures to encourage and support existing cohorts of Singapore residents to join CareShield Life.

5          The Government thanks the ElderShield Review Committee for its hard work and comprehensive review. The Committee members have contributed their diverse expertise and perspectives to the deliberations. They have also invested significant time to consult extensively, study other countries’ experiences and considered the feedback and suggestions which they received.

6          The Committee’s recommendations will offer better protection and greater assurance for Singapore residents. They will provide future cohorts, regardless of financial ability and health, with universal coverage and protection. The CareShield Life payouts will complement Government subsidies, personal savings, and family support for long-term care. The recommendations are well thought through and strike a good balance between enhancements in the scheme benefits, and ensuring premium affordability and long-term scheme sustainability.

Government will Provide Subsidies and Financial Support 

7          Lifetime coverage and higher payouts that increase over time will need to be supported by higher premiums. For the first five years of scheme implementation, payouts and premiums will both increase by 2% per year. Subsequent adjustments will be reviewed regularly by an independent CareShield Life Council.

8          Singapore residents will be able to use their MediSave to pay for the full amount of premiums under CareShield Life. For future cohorts of Singapore residents, the Government will also provide the following premium subsidies and support (see Annex A for details):

• Permanent means-tested subsidies for lower- to middle-income Singapore residents: Up to two-thirds of Singapore resident households will be eligible for CareShield Life subsidies of up to 30%.

• Transitional subsidies for the first five years from scheme launch: Singapore Citizens will receive up to $250 in subsidies spread over the first five years of the new scheme to help them pay for the premiums of the new scheme. 

• Additional premium support: For those in financial need who are unable to pay for their net premiums after premium subsidies, they can receive Additional Premium Support from the Government. 

9          With these measures, CareShield Life premiums will be affordable for all Singapore residents. No one enrolled in CareShield Life will lose coverage due to financial difficulties.

Government will Develop Measures and Incentives for Existing Cohorts

10        Existing cohorts will be given the option to join CareShield Life.  The Government will develop measures and incentives, including permanent means-tested subsidies and additional premium support, to encourage existing cohorts of Singapore residents to join CareShield Life. For those who are unable to join or choose not to join the new scheme, the Government will consider other forms of support to help them with their long-term care needs.   

MINISTRY OF HEALTH

27 MAY 2018

¹ Those born between 1980 and 1990, inclusive.

² Those born from 1991 onwards.

³ Those born before 1980.

ANNEX A

Table A-1: Permanent Means-tested Subsidies for Singapore Residents¹

¹ Subsidy rates are applicable to Singapore Citizens who live in residences with an Annual Value of $13,000 or less. Those who live in residences with an Annual Value between $13,001 to $21,000 will receive 10 percentage points less than these subsidy rates. Those who live in residences with an Annual Value above $21,000 or own multiple properties will not receive these subsidies.

² Individuals with monthly PCHI above $2,600 will not receive these subsidies.

³ Permanent Residents receive half of the subsidy rates applicable to Singapore Citizens.

Table A-2: Schedule of Transitional Subsidies for Singapore Citizens from Future Cohorts

⁴ Transitional subsidies will be provided for all Singapore Citizens from future cohorts over the first five years of scheme launch, i.e. from 2020 to 2024.

Table A-3: Estimated Monthly Payouts for CareShield Life

⁵ Based on the ElderShield Review Committee’s recommendations, CareShield Life payouts will increase over time, supported by regular increases in premiums. Monthly payouts shown are based on Government’s commitment to a payout increase of 2% per year, for the first five years of CareShield Life from 2020 to 2024. This will need to be supported by premium increases of 2% per year. Premiums and payouts may be adjusted to account for claims experience and long-term changes in disability and longevity trends.

6          Lifetime coverage and higher payouts that increase over time will need to be supported by higher premiums. For the first five years of scheme implementation, payouts and premiums will both increase by 2% per year. Subsequent adjustments will be reviewed regularly by an independent CareShield Life Council.