Comments, opinions and an occasional ramble
Means testing just means we should be more proactive
It appears that few are disagreeing with the means testing proposal by MOH to determine the level of subsidy Singaporeans should receive in the event of hospitalisation. The main concern, as usual, is whether the middle-class folks will be heavily burdened as a result.
Actually, I think the middle-class folks are unduly worried. Sure, hospitalisation can be expensive business but it need not be if one takes up private medical insurance. And, comprehensive private medical insurance for hospitalisation isn’t unaffordable for middle-class folks in Singapore, at least not yet.
We already have Medishield for basic hospitalisation coverage. Middle-class folks should ‘upgrade’ their Medishield through the Private Medical Insurance Scheme (PMIS) and take up an additional private plan to complement Medishield. The market is quite competitive (see this PDF document that compares the various products on the market) so premiums are affordable for middle class folks.
Personally, I’ve signed myself on PruShield Premier plus PruShield Extra. It currently costs me about $450 a year, with about one-third of it coming out of my Medisave account. It’s a small price to pay for a peace of mind. PruShield Premier allows me to go to a private hospital and the benefits are as charged, meaning there’s no cap. With Prushield Premier alone, I’ll have to co-pay a small portion of the expenses (deductibles and co-insurance) so I added PruShield Extra which takes care of that. So, in the event that I’m hospitalised (which I have not experienced and I hope not to experience), my insurance takes care of every single cent of my hospital bill.
There are many other similar products out there on the market (see this link for a list of insurers) and it’s perhaps a good time for middle-class folks who are not yet covered to start reviewing their coverage. Means testing will not be a problem for middle-class folks if they know how to cover themselves with private medical insurance. Since Medisave can be used to pay for private medical insurance, it makes even greater sense to get one.
Means testing simply means that we have to be more proactive in ensuring adequate personal medical coverage. I heard over the radio today that the Life Insurance Association is going to engage the health ministry in talks to discuss the impact of means testing on insurers, as well as to explore ways to encourage Singaporeans to take up private medical insurance. Since means testing have grabbed the attention of Singaporeans, I think now is the best time to broadcast the importance of private medical insurance.
| Print article | This entry was posted by Aaron Ng on 10/01/2008 at 11:38 am, and is filed under Perspective. Follow any responses to this post through RSS 2.0. You can leave a response or trackback from your own site. |
about 4 years ago
Aaron,
I’m not too optimistic about the whole thing. Means testing has not started yet and I doubte that the $450 per year is enough as insurance. That was what the Americans thought when they started moving away from public hospitals to private care – initially it starts small and spirals out to be expensive. I was in US some years ago and I paid U$250 per month for medical insurance. It is probably higher now.
The means testing results in a number of things:
1. More resources moving to for profit private hospitals instead of public hospitals. This will put more pressure on costs to go up especially since Singapore is a medical hub. You will start to compete with rich tycoons from indonesia and oil shieks from middle east.
2. In US 40 million people cannot afford insurance for various reasons. You could be born with some congenital health problems, be unemployed for long stretches etc. A system that depends on insurance has many holes….and many will be left out even if they are disqualified due to means testing.
3. The introduction of a middle man – insurance companies – will mean additional costs. Insurance companies are not charities, they doing this for profits. Insurance companies also employ experts to structure products that will prove complex for the ordinary person – alot of holes to fall through. Example “exclusion of pre-existing” conditions from Aviva claims. They can add alot of fine print to deny claims and enhance profits. The cost for our society will go up.
We cannot assume things will not change much after the govt introduce means testing. I’m also very happy with the current system NOW- my insurance cost is low, I can afford it. But already the Life Insurance Association of Singapore is going to meet the Health Ministry and are preparing to restructure their products expecting cost for Singaporeans to go up. Means testing itself may look okay now based on current cost of treatment …..but you think things will stay the same? The spiral is about to start. All examples around indicate that when the govts reduce subsidised care and resources move to the private sector cost of healthcare to our society will go up. You will pay alot more for insurance. Right now a 1 day stay in ICU at a private hospital is upwards of $1000…and when the cost of a triple bypass gets to $100K how much insurance do you think you need?….May years ago when the govt started GST ….”only 3% what is the big deal”…that was the starting point!!!
about 4 years ago
Lucky,
Yes, I agree that cost of health insurance will eventually go up. However, it is still cheaper to be covered by health insurance compared to paying the full bill, even if health insurance premiums go up. I agree wholeheartedly that there are people who will be left out and this is something the government should address but my concern really are those who can afford insurance (even if premiums go up) but are not getting themselves covered.
With regards to your example of USA, I think that situation is unlikely to occur in Singapore because of the presence of Medishield. If the cost-benefit ratio of private medical insurance is less than that of Medishield, I’ll just switch back to Medishield. So, private insurers are kind of limited in how much more they can charge. Of course, if there are changes in Medishield, then we are all screwed no matter what.
about 4 years ago
Lucky,
I forgot to address the part on insurance companies not being charities. Yes, you are right that they are profit-seeking and there are lots of exclusion clauses, such as existing conditions. Some of these issues can be tackled, though. For example, I’m loading up as much insurance as I can comfortably afford now because I’m perfectly healthy. I’ve never been hospitalised, never had any major illness and my health check results are always excellent. Since I have no existing conditions, I should take advantage of it to increase coverage. I am applying the same strategy for my wife and in future, for my kids as well. Of course, if my future kids have congenital problems, there’s nothing I can do. I can only plan to the best of my ability and I think that’s better than no planning, no?
about 4 years ago
You’re a very responsible citizen. I guess if one is willing to cover by paying for insurance and can afford it he should be alright. You can find Americans who are “alright” under their system.
The govt still has control over how many private hospitals, how many medical tourist that will strain our system. I really prefer the system stay as it is. People who opt for “C” should be allowed to do so even if they are “middle” class – the middle class is financially strained anyway these days. Even if a person has $300K savings, if he is the sole bread winner he might want to preserve as much cash as possible.
If the govt push through with this system they should exempt means testing for people who do not qualify for insurance due to pre-existing conditions, congenital medical problems etc. If they can’t do that, the should put a cap on the maximum bill for these people e.g. $30K or $50K. Otherwise, we can end up penalising responsible people who are middle class, can’t get insurance due to congenital problems ending up with bills of $100k-$200k.
The means testing logic is also incorrect – how do you know how much a person can afford without taking into account the final bill. How do you know he has the “means” without knowing what the bill is?
I cannot accept something that is so fundamentally flawed!!!!
about 4 years ago
Lucky,
Actually, it’s more of self-interest than being a responsible citizen. I worry that I will saddle my next-of-kin with huge debts to pay off so I rather cut down on some less than necessary expenditure to pay for my own comprehensive coverage.
Indeed, you have a very valid point that private medical insurance might exclude certain groups of middle-class people because of exclusion clauses (otherwise they have to pay premiums that might be unaffordable). Some scheme should be in place to ensure such people still get some form of subsidy.
As for means testing logic, you have a point as well. It doesn’t mean that someone who lives in a 5 room flat earning $8,000 a month can easily afford a $100,000 medical bill. And, earning $8,000 and living in a 5 room flat doesn’t mean one is well-off if that person has to take care of 2 aging parents, 3 schooling kids and a homemaker spouse. I do wonder if the number of dependents are considered in means test.
about 4 years ago
Means testing (be it for medical, ERS, NSS etc) is flawed if we base it on housing type. For medical it is more scary. Lucky is correct to say that people with congenital or pre-existing health conditions are not covered by most insurance companies unless you pay over the top premiums not affordable by the ordinary folks.
Means testing based on housing type has caused us much pain.
My 3 brothers, nephew and I (all singles) are living in a pte condo. We did not end up like this because we are rich but because of 1) brother is a coach driver 2) nephew is multi handicapped
Brother works long hours and sometimes sleeps in his coach and zips home to freshen up whenever possible so as to be alert in his driving. Many times for a 5-10 minute shower, he has been slapped with a $80 fine each time. He can only park his coach at designated carpark a good distance away.
Nephew is deaf, mute and austistic and works in a MINDS sheltered workshop. His mum is dead and his dad is unable to care for him; that’s why we took him in. He is the last to leave and the first to return home. We leave him at void deck to wait for his van which results in him getting bullied sometimes, getting wet by standing in the rain due to his autism. I worry constantly. Other than the workshop he is cooped up in our previous HDB flat.
That’s why we moved to a condo in 2004 where there is free surface parking for brother’s coach and nephew can wait for his van or move around safely.
Given a better choice we would still opt for a frugal lifestyle.
We remain simple folks.
Though home is a condo, our joint incomes are not high. Housing type classification is really deceiving. We are certainly not rich – nephew is given an allowance of $110 by the workshop and we have to pay $105 for the van so basically he is a liability. Yet he gets no help – no workfare, least ERS, NSS (brother also affected). All because of housing type. As if this is not bad enough, now means testing even for medical.
And for his care-giver (me) – cannot get tax income relief for handicapped because he is not my son, cannot get maid waiver (maid is a need and not a luxury because nephew returns home before we do and dinner to be ready for him etc)
We tried to get help and each time after listening to our story they can only conclude we are a pitiful and unique case but the law cannot be changed. No wrong door policy? I beg to differ.
about 4 years ago
Read today’s papers on how medifund / CDC funds are made difficult to be disbursed, as far as possible to prevent a crutch mentality. I see the same thing here. Soon C class ward will only for those who are lower class, so be prepared to be made a virtual bankrupt before C class ward (or medifund) kicks in. It can only get worse. What Lucky says is true- means testing, afford what bill? $200,000 bill? pay in instalments till you are bankrupt before you can touch medifund? No wonder Dover Hospice got out of this scheme. Praise the lord for the people donating to such a cause as Dover Hospice!
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