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Your Complete Guide To Healthcare Financing In Singapore

Health is wealth. What happens when you lack one, or both?

 

There is a saying in Singapore that one cannot afford to fall sick. However, if one were to need healthcare, how does one pay for it?

Fortunately, Singapore ranks as having one of the best healthcare outcomes for amount money we spend. In fact, a 2014 report by the Economist Intelligence Unit (EIU) found that Singapore spent US$3,290 per capita on healthcare, which was 46% less than Japan (ranked 1st), but had better healthcare value for money spent than the US (ranked 33rd), which spent US$9,216 per capita. A 2014 Bloomberg report also found that Singapore had the world’s most efficient healthcare system.

So, how does Singapore do it? Singapore adopts a multi-layered system, with participation from the individual, the government, private employers, and the insurance industry.

In this article, we will examine each of these components and see how they work together to pay for Singaporeans’ healthcare.

Since the government provides a broad, basic foundation, we will examine government schemes first, so that private insurance and other individual measures can be understood in the context of how they work hand in hand with existing government support.

The Singapore government’s multi-layered approach to healthcare. (Source)

#1 Subsidies

The government provides subsidies based on means-testing to pay for healthcare, which supports Singaporeans in having access to the same high standard of care, regardless of their income. Singaporean patients earning less than $3,200 enjoy up to 80% in subsidies from the government when they stay at a ‘C’ Class ward in a government hospital. You can look at the full table here.

There are subsidies that cover primary care, hospitalisation and day surgery, treatment at specialist outpatient clinics, and intermediate and long term care, which includes home care, day rehabilitation centre programmes, and nursing homes.

#2 Medisave

Medisave is a mandatory national individual health savings scheme under the Central Provident Fund (CPF) umbrella. It allows Singaporeans to build up savings for their own future medical needs, the medical needs of their immediate family members, as well as pay premiums for Medishield.

Contribution rates for Medisave start at 8% and progressively rise to 10.5% as a person ages, in line with higher expected healthcare expenditure in one’s later years. Usage of Medisave funds is governed by limits placed on the usage of your Medisave funds.

Thanks to Medisave Grant for Newborns, each Singaporean baby is now a CPF member at birth! The grant ensures that newborns have enough to pay for their Medisave Life premiums from birth till age 21. It can also be used supports expenditures on other healthcare expenses such as recommended childhood vaccinations, hospitalisation, and approved outpatient treatments.

Read Also: What Is Medisave And Why It Is Important In Singapore?

#3 MediShield Life/Eldershield/Integrated Shield Plans

MediShield Life is a compulsory national basic health insurance that helps to pay for large hospital bills and selected costly outpatient treatments such as dialysis and chemotherapy for cancer. It is basic in the way that it is designed to cover for subsidised treatments in the public hospitals.

All Singaporeans are automatically covered by MediShield Life from birth, including those with serious pre-existing conditions. MediShield Life premiums may be fully paid from Medisave.

Medishield allows for risk pooling and mitigation of financial risks of catastrophic illnesses.

Singaporeans have the option to supplement the basic coverage provided by Medishield with integrated private insurance policies. Known as Integrated Shield plans, these are offered by private insurers and can only be accessed by Singaporeans who are already in the Medishield scheme.

#4 Medifund

Medifund is a government endowment fund meant for helping needy Singaporeans. Medifund is likened to a safety net that catches Singaporeans patients who can’t afford to pay their medical bills in spite of government subsidies, Medisave funds, MediShield Life, and private insurance.

#5 CHAS and Pioneer Generation Package

The Community Health Assist Scheme (CHAS), provides lower to middle income families with varying amount of subsidies at participating private General Practioner and dental clinics.

Singapore pioneers who qualify for the Pioneer Generation Package also receive additional benefits on top of the CHAS.

#6 Private Insurance

Private insurance serves to supplement and increase coverage for patients, as well as allow for claiming insurance when seeking treatment in private hospitals. These are varied in their types and are covered extensively here on DollarsAndSense.

#7 Corporate Healthcare Benefits and Insurance

At times, corporate or group health insurance is provided by one’s employer. These can be a very attractive perk, especially for companies that are able to negotiate for a good rate. Do note that coverage under these company-provided insurance schemes end once employment ends.

#8 Preventative Healthcare

In his National Day Rally 2017, PM Lee Hsien Loong announced that Singaporeans above the age of 40 will soon able to get medical checkups at just $5, instead of $100, which is what it usually costs. Such efforts are part of preventative medicine.

Over the years, there have been efforts to encourage Singaporeans to eat healthier and exercise more. When the ActiveSG programme was launched, every Singaporean was given $100 in ActiveSG credits. Each year, physically able NSmen have the obligation to pass their Individual Physical Proficiency Test (IPPT) and enjoy some monetary incentives for doing so too!

Read Also: 6 Ways It (Literally) Pays To Be An NSman

Here’s wishing you the very best of health. But should you need it, proper prior planning will ensure you have peace of mind knowing that your healthcare costs can be taken care of.

 

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