Yesterday, the Ministry Of Health (MOH) released more updates pertaining to the rollout of CareShield Life.
For those of you who are not aware, CareShield Life will be replacing the existing ElderShield scheme and come into effect for all Singaporeans and Permanent Residents in 2020. For new cohorts who are not under the ElderShield scheme, CareShield Life is compulsory.
The latest announcements yesterday provided more information on what will happen to existing ElderShield members who wish to transfer to CareShield Life, as well as other key initiatives that will enhance Singapore’s long-term care financing system.
Before we go through the new announcements, here is a brief recap of CareShield Life.
> Lifetime payouts if you are severely disabled.
> CareShield Life kicks in from age 30 onwards, as compared to ElderShield which only kicks in at age 40.
> Payout increase over time, starting from $600 per month in 2020. However, note that upon making your first claim, payouts will stop increasing.
> Similar to ElderShield, CareShield Life premiums can be paid for using your Medisave.
We will now be discussing the latest announcements with the assumption that you already understand how CareShield Life works. If you don’t, you can read our coverage on it before coming back to this article.
# 1 Existing ElderShield Members Can Join, Starting From 2021
As announced previously, existing ElderShield members who wish to join CareShield Life can do so from 2021 onwards. This refers to those who are born in 1979 or earlier. Here are some things to know.
> You must not already be severely disabled.
> Those who are uninsured currently can also opt back into CareShield Life. There is no maximum age to join.
> Existing ElderShield members who are between the age of 41 to 50, and who are not severely disabled, will be auto-enrolled in 2021. These members can still opt out of CareShield Life, if they want. This can be done within two years.
# 2 Premiums Payable
It has been announced that CareShield Life premiums for members who are 40 in 2020 will be $300 (male) and $360 (female) per annum. For those who are 30 in 2020, premiums will be $204 (male) and $252 (female) per annum.
However, premiums for existing ElderShield members who are intending to switch to CareShield Life in 2021 will be different. That’s because this existing cohort are a diverse group.
For example, existing cohort who are on ESH400 will pay an annual base premium. This premium takes into account past premiums that they have already paid for. Similar to new CareShield Life members, the premiums payable will be till age 67, or when a claim is made.
Those who are under ESH300, or are not currently in ElderShield, will also pay an additional catch-up component in their premiums, on top of the base premium. This is to take into account the fact that they had paid lesser premiums during earlier years, but would now be enjoying the same coverage as everyone else on CareShield if they opt for it.
Currently, exact premiums payable has not been made known yet by MOH but this is expected to be available soon so that existing ElderShield members can find out how much they will be paying if they make the switch to CareShield Life.
# 3 Premiums Support Available For Existing ElderShield Members
“Participation Incentives” will be given to existing cohorts who chose to switch from ElderShield to CareShield Life. This amount given will differ, depending on the age of the individual.
|Birth Year||Participation Incentive|
|1975 to 1979||$500|
|1970 to 1974||$1,000|
|1965 to 1969||$1,500|
|1960 to 1964||$2,000|
The participation incentive will be spread equally over 10 years and is used to offset annual premiums payable for that year. This participation incentive will be applicable for Singapore citizens from existing cohort who join CareShield Life in the first two years, starting from 2021.
In addition to the participation incentive, additional subsidies will also be given to lower and middle-income individuals. This subsidy applies to both existing and future cohorts.
# 4 Inclusive Underwriting
Unlike ElderShield, which was administered by private insurers, CareShield Life will be administered by the Singapore government.
MOH has already said that its underwriting process for CareShield Life would be more inclusive. Every person who is not severely disabled can join CareShield Life in 2021. This is a much more lenient underwriting criterion compared to private insurers.
# 5 Any ElderShield Supplements That You Bought Continues To Be Relevant
For ElderShield members who are currently on ElderShield supplement plans, it’s worth noting that the new CareShield Life plan does not supersede the coverage that you are already enjoying from the supplement plans that you may have bought from a private insurer.
What this means is that if you do intend to switch to CareShield Life in 2021, your supplement plan bought under ElderShield continues to be relevant. So, you can continue to pay the premiums required and enjoy the relevant coverage it provides, on top of what you get under CareShield Life.
So, there is no need to call your insurance agents in panic just yet.
# 6 MediSave Withdrawals For Long-Term Care
From 2020 onwards, severely disabled Singapore residents (i.e. those who are claiming either from CareShield Life or ElderShield) will be able to make cash withdrawals from their MediSave account, or their spouse’s MediSave.
This is a new initiative to allow Singaporeans to use their Medisave savings to supplement their long-term care needs.
Up to $200 per month ($2,400 per year) can be withdrawn as cash, subject to a minimum Medisave balance of $5,000.
|Medisave Balance||Monthly Withdrawal Quantum|
|$20,000 and above||$200|
|$15,000 and above||$150|
|$10,000 and above||$100|
|$5,000 and above||$50|
# 7 ElderFund
An assistance scheme called ElderFund will also be available to help lower-income Singaporeans (aged 30 and above) who are severely disabled, and who need additional support for the cost of long-term care from 2020 onwards.
This scheme will provide a monthly payout of up to $250 per month, and is targeted towards those who are not able to join CareShield Life, or have low Medisave balances and insufficient savings for their long-term care needs.
CareShield Life Is Just (One) Part Of The Solution To Address The Cost Of Long-Term Care
In our view, the inclusive nature and lifelong payouts provided by CareShield Life are good enhancements compared to the old ElderShield scheme.
At the same time however, the payout from CareShield Life, starting at just $600 per month, is unlikely to be sufficient on its own to cover for the full cost of long-term care that a family incurs when a household member is severely disabled.
This is why new initiatives, such as being able to withdraw up to $200 per month from our Medisave account, buying a supplement plan from a private insurer, and having your own cash savings are all important parts of the solution that we should not be ignoring, even as we tackle the inevitable cost of long-term care that we all might face one day.
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