Last week, the MediShield Life Council released preliminary proposed changes for the current round of MediShield review.
Arguably, the most significant change that got many Singaporeans and Permanent Residents concerned was the indicative revised MediShield Life premiums, which can go up as much as 35% for some age groups.
To get a better picture of how much you (or your loved ones) will be actually paying in MediShield Life premiums, we would also need to understand the various types of premium subsidies we might be eligible for.
#1 Means-Tested Subsidies Of Between 5% To 50%
Lower to middle-income families enjoy means-tested premium subsidies of between 5% to 50% to help keep premium costs manageable. This premium subsidy is a permanent scheme and does not expire.
The following are subsidy rates are for Singapore Citizens, while Permanent Residents receive half of the applicable rate for citizens.
To qualify for these subsidies, you need to have a household monthly income per capita of not more than $2,800 and living in residences with an Annual Value of not more than $21,000. You must also not own more than one property.
Based on the above criteria, up to two-thirds of Singapore Resident households would qualify for some subsidy, which is tiered based on household income per capita and age.
As you can see from the table, a Singapore Citizen under the age of 40 with a monthly household income per capita of $2,800 and lives in a dwelling with Annual Value greater than $13,000 would receive the lowest amount of premium subsidy rate of 5%.
#2 Pioneer Generation Subsidies Of Between 40% to 50%
As part of the Pioneer Generation Package benefits, members can receive between 40% to 60% in MediShield Life premium subsidies based on age, regardless of their household monthly income or the Annual Value of their home.
Based on 2020’s premium rates, this works out to between $326 to $918 in annual premium subsidies.
Furthermore, Pioneer Generation members also receive between $200 to $800 in MediSave top-ups each year, which can also be used to offset the costs of MediShield Life.
#3 Additional Merdeka Generation Subsidies Of Between 5% To 10%
Merdeka Generation members are eligible to receive additional MediShield Life premium subsidies of between 5% to 10%, on top of any means-tested premium subsidies they might be eligible for.
Furthermore, these members also receive $200 a year in MediSave top-up from 2019 to 2023, which can be used to defray the costs of their MediShield Life policy.
#4 MediShield Life Premium Rebates
To ensure MediShield Life premiums do not increase sharply (as dictated by actuarial methodology), premiums for younger cohorts have actually been marked up, at a time when they are likely to be able to afford them.
Members will then receive rebates over the years, adjusted in accordance with actual claims experience. This has the effect of allowing MediShield Life premiums to be more evenly distributed over the course of one’s lifetime.
To illustrate, here is the table of annual premium rebates for those born in or after 1950:
#5 One-Off COVID-19 Subsidy To Cushion Proposed MediShield Life Premiums Increase
We have been constantly reminded that Singapore is in the midst of the greatest healthcare and economic challenge since independence. Yet, the proposed increase in MediShield Life premiums is scheduled to take place in early 2021.
To help offset the impact of any premium increase, the Ministry of Health announced a one-off COVID-19 subsidy of 70% of the net increase in premiums (after prevailing subsidies) in the first year, which is tapered down to 30% in the second year.
This will have the effect of capping the increase in actual premiums paid for Singaporeans to about 10% in the first year.
#6 Additional Premium Support (APS) For Those With Insufficient MediSave Balances
Singaporeans and Permanent Residents who have financial difficulties and cannot afford premiums after subsidies and have limited family support who can help pay for them will be invited to apply for Additional Premium Support (APS).
This invitation will be triggered based on insufficient MediSave savings and the government not being able to deduct your MediShield Life premiums. Once you receive the invitation, you can complete the APS application form and be assessed for APS eligibility.
You can visit the MediShield Life website or call 1800-222-3399 for more information and assistance on APS.
No One Will Be Denied MediShield Life Coverage Due To The Inability To Pay
With the exception of Additional Premium Support, all other premium subsidies and rebates are granted automatically based on eligibility.
All these schemes are policy expressions of the government’s promise to keep healthcare costs manageable, and that no one will be denied coverage or treatment over financial issues.
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