1. The Government has accepted all the recommendations of the MediShield Life Review Committee on the design of the MediShield Life scheme. To ensure that all Singaporeans will benefit from this new insurance scheme, the Government will provide close to $4 billion in subsidies and other forms of financial support over the next five years.
2. The Government also welcomes the Committee’s recommendations on Integrated Shield Plans and other related issues, and will study how best to implement them.
MediShield Life Review Committee Recommendations
3. The Government thanks the Committee for its hard work and comprehensive review of the MediShield Life scheme over the past seven months. The Committee members have brought a wide range of expertise and perspectives to their work. The Committee has also consulted widely and received diverse inputs. Their final recommendations reflect the Committee’s considered assessment of the many good ideas and suggestions received.
4. The Government agrees with the Committee’s approach in calibrating a careful balance between providing more benefits and keeping premiums affordable, while ensuring that the system is sustainable over the long term. The Committee’s proposal for MediShield Life to provide stronger protection against large hospital bills, especially at Class B2/C level, will provide all Singaporeans with better peace of mind against large healthcare bills, for life.
Government to Provide Substantial Subsidies and Support
5. MediShield Life will provide better protection, for all and for life. With better benefits, premiums will need to increase, but will be able to be fully paid for from Medisave. The Ministry of Health will ensure that Medisave Withdrawal Limits can continue to fully cover MediShield Life premiums, and the additional 1%-point Employer’s Medisave contribution from 2015 will also be sufficient to cover the increases in MediShield Life premiums for most households.
6. To help Singaporeans with their MediShield Life premiums, the Government will commit close to $4 billion over the next five years in premium subsidies and other forms of support.
7. Government support will be in the following forms:
a. Government bearing the bulk of the cost of bringing those who have pre-existing conditions into MediShield Life. Government will pay for three-quarters of the cost in the first five years (about $850 million over five years). This will ease the shift to universal coverage under MediShield Life and keep the premium impact manageable for all;
b. Premium subsidies i.e. Pioneer Generation subsidies and subsidies for lower- to middle-income Singaporeans, and Additional Premium Support on a case-by-case basis for the needy (about $430 million per year). These will remain permanent features of MediShield Life; and
c. Transitional subsidies (for all Singapore Citizens) for the first four years (about $830 million over four years).
8. Premium subsidies for the Pioneer Generation: Pioneers will enjoy special MediShield Life subsidies of between 40% and 60%. They also enjoy annual Medisave top-ups of up to $800 which can be used to pay for premiums.
9. Premium subsidies for lower- to middle-income: Up to two-thirds of all Singaporean households will be eligible for MediShield Life premium subsidies of up to 50%. The subsidy rates will be higher for those who are older, have lower income, or live in properties with lower annual value (AV). Households living in properties with AV of $13,000 or less can receive subsidies of between 15% – 50%.
a. A Singapore Citizen living in a lower-income household of four will receive up to 50% subsidy for his MediShield Life premium.
b. Permanent Residents receive half of the subsidy rates for Singapore Citizens in the same age and income/AV groups.
10. Additional Premium Support for the Needy: For the needy who are unable to pay for their net premiums after the various premium subsidies and Medisave top-ups, they can receive additional premium support from the Government, for up to full coverage of their premiums, similar to Medifund for healthcare bills. No Singaporean will lose MediShield Life coverage due to financial need.
11. Transitional Subsidies for Singapore Citizens: To ease the shift from MediShield to MediShield Life, the Government will also provide transitional subsidies for all Singapore Citizens for the first four years of MediShield Life. In the first year of MediShield Life starting end-2015, Government will subsidise 80% of the net increase in premiums (after taking into account premium subsidies), followed by 60%, 40% and 20% in the second, third and fourth year of MediShield Life respectively.
12. With the substantial Government subsidies and support, premiums will be more affordable for most Singaporean households:
a. In the first year of MediShield Life, with the premium subsidies and first year transitional subsidies, the maximum premium increase will be less than $3 per month for the lower income, and no more than $6 per month across all ages and income groups;
b. In the fifth year of MediShield Life, after transitional subsidies have been phased out, the maximum premium increase compared with MediShield premiums today will be $30 per month for the high income. Singaporeans from lower-income households will continue to benefit from premium subsidies and premium increases from MediShield premiums today will be no more than $11 per month.
c. All Pioneers will pay less for MediShield Life premiums than today.
d. For all Pioneers aged 80 and above in 2014, they will have their premiums fully covered after the premium subsidies and Medisave top-ups
13. The detailed MediShield Life premiums and Government subsidies and support measures are shown in Annex A.
14. MediShield Life will be implemented in end-2015. MOH will provide more information on the implementation details at a later date.
Integrated Shield Plans
15. The Government also agrees with the Committee’s suggestion for Government to work with private insurers to review the landscape and features of Integrated Shield Plans (IPs), including developing key features for a standard IP with B1-level coverage.
16. Singaporeans who are currently on IPs will not be disadvantaged with the introduction of MediShield Life. Given that MediShield Life will be taking on a larger share of IP payouts, MOH will work with IP providers to take this into account when they set IP premiums. The overall increase for IP premiums resulting from the introduction of MediShield Life is expected to be the same, if not lower than the increase in MediShield Life premiums.
MediShield Life – Better Protection. For All. For Life.
17. The Government will table the Report of the MediShield Life Review Committee in Parliament as a White Paper, for debate at the next Parliamentary Sitting in July 2014.
18. The introduction of MediShield Life in 2015 will be a major step in our efforts to build a strong and sustainable social safety net. It will provide every Singaporean with lifetime basic protection against medical costs for greater peace of mind. Over the coming year, the Government will step up our efforts to reach out to Singaporeans to help them understand the value of MediShield Life and the many avenues to seek help. MediShield Life will be implemented in end-2015.
MINISTRY OF HEALTH
27 June 2014