Medisave contribution may go up to cover costs

Medisave contribution may go up to cover costs

SINGAPORE: Medisave contribution may go up as the need for long-term care increases with Singapore's aging population.

Health Minister Khaw Boon Wan said the current contribution rate of 6.5% to about 9% does not build up enough reserves to pay for both big medical bills and long-term care.

Medisave has been around for 25 years and was originally meant to pay for major hospital stays but its use has since been expanded to include some outpatient payments.

Mr Khaw said the current contribution rate is not enough to cover long-term healthcare bills.

"We've never priced that into Medisave contribution rate. So that's a topic almost certainly I see a need for discussion during the upcoming Budget Debate," he said.

Speaking on the sidelines of his visit to the Bloodbank@HSA on Thursday, Mr Khaw said the increase in contribution rate will depend on what the Members of Parliament are ready to support.

Meanwhile, more money will be injected into the common health subsidy pool for citizens.

This follows the ministry's decision to reduce health subsidies given to permanent residents (PRs) from January 1 next year. The idea is to further sharpen the distinction between Singapore citizens and PRs.

The Health Ministry said in a statement: "Citizens enjoy heavy subsidy in Class B2 and C wards. PRs receive significant subsidy while foreigners are not subsidised at all. The subsidy distinction reflects the privileges of citizenship, but there is scope for refinement."

PRs now get 10 percentage points less in subsidy than citizens. This will go up to a 20-point difference by 2012.

With the revision, citizens are still entitled to an 80% subsidy for a Class C ward. But PRs will be entitled to 60% of cost, down from 70%.

And Mr Khaw explained how the cost savings from the move will be used.

"Our data suggests that about 6% of our patients are PRs, so this reduction in subsidy for them, will save us about seven million dollars a year, which we would then use to top up our growing subsidy for citizens."

The minister said that it is only right for citizens to enjoy more subsidies than non-citizens.

Mr Khaw added that the move will mean PRs have to make some adjustments like getting additional health insurance.

"If you're not already insured with a private shield, then you should seriously think about taking up one because your basic MediShield is really aimed at the B2, C subsidy rates. So now that your subsidy will be less, I think you need to augment it with a private shield."

To help the PRs affected by the policy to ease into the adjustments, the reduction will be carried out in stages.

From January 1 next year, the subsidy for PRs in the public hospitals (Class B2 and C wards) and specialist outpatient clinics will be reduced by 5 percentage-points.

From July 1 next year, another 5 percentage-point reduction will apply in the public hospitals and specialist outpatient clinics.

Also from July 1 next year, the subsidy for PRs in the intermediate and
long-term care sector like community hospitals and nursing homes will be reduced by 5 percentage-points.

From January 1, 2012, another 5 percentage-point reduction will apply in the intermediate and long-term care sector.

By 2012, there will be a 20 percentage-point difference in healthcare subsidies between citizens and PRs.

- CNA/ir