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Complete Guide To Healthcare Financing In Singapore

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

by
Angela Koo
March 25, 2021

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?

According to the Bloomberg Health-Efficiency Index 2020, Singapore is the top-ranked country of the most efficient healthcare. This means that we have one of the best life expectancy outcomes for the amount we spend on healthcare as a percentage of GDP (4.4%). In comparison, United States spends about 17.1% of GDP on healthcare and has much worse healthcare outcomes.

However, health is more than just life expectancy and Singapore is constantly evolving and improving its healthcare landscape. This would include constantly reviewing existing healthcare frameworks and introducing new policies.

Singapore’s Healthcare System

In Singapore, most of our healthcare services are provided by the public healthcare system. These include outpatient services through our polyclinics and specialist outpatient clinics as well as inpatient services through our restructured hospitals. Sub-acute, intermediate and long-term care services are provided through a mix of public and (publicly subsidised) private service providers.

Singapore’s public healthcare philosophy is anchored on the philosophy of individual responsibility and affordable healthcare for all. Our healthcare system provides universal healthcare coverage to all citizens, and adopts a multi-layered system, with participation from the individual, the government, private players, and the insurance industry. This formed by Subsidies, MediSave, MediShield Life (and other insurance) and Medifund: the S +3Ms system.

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

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

#1 Subsidies

The first tier of healthcare financing is subsidies. The Government heavily subsidises public healthcare in Singapore. These subsidies are means-tested to better support all Singaporeans of all income groups.

Inpatient treatment in restructured hospitals receives ward subsidies of up to 80%. Patients who are warded in C Wards will receive subsidies of at least 50% to 80%. The Ministry of Health (MOH) is also extending the same level of subsidies to patients warded in B2 wards by mid-2022, instead of the current 50% to 65%. The full table of subsidies can be found on MOH’s website.

Singaporeans also receive subsidies at specialist outpatient clinics (SOCs). This is currently 50% to 70% but will be changed to 30% to 70% by mid-2022. Polyclinic consultations are also subsidised with a typical consultation costing about $13.20. Medications are also subsidised at 50% for those with per capita household income (PCHI) of more than $2000 and 75% for those with PCHI of $2000 and below.

Additionally, the Government also subsidises up to 80% for intermediate and long-term care (ILTC), including ward stays at community hospitals, nursing homes and hospices.

#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 Life, Integrated Shield Plans, Eldershield and CareShield Life.

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.

With the 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.

MediSave can be used to support expenditures on other healthcare expenses such as recommended childhood vaccinations, hospitalisation, and approved outpatient treatments. Specifically, MediSave can cover maternity expenses through the MediSave Maternity Package, selected dental procedures and long-term care.

#3 MediShield Life And 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. The claim limits are sized for subsidised treatments in government restructured hospitals.

All Singaporeans are automatically covered by MediShield Life from birth, including those with serious pre-existing conditions. By risk-pooling across the entire population, MediShield Life is able to provide universal coverage for Singaporeans for life with the aim of having MediShield Life covering 9 in 10 subsidised bills. MediShield Life premiums may be fully paid from Medisave.

To further support Singaporeans, MOH regularly reviews and enhances MediShield Life coverage and premiums. Premium subsidies and rebates are provided to maintain affordability.

Singaporeans have the option to supplement the basic coverage provided by MediShield Life with integrated private insurance policies. Known as Integrated Shield plans, these are offered by private insurers and provide coverage for higher ward classes (above B2 wards) in public hospitals or treatment at a private hospital.

#4 CareShield Life/ ElderShield

CareShield Life was launched on 1 October 2020 as a long-term care insurance scheme that provides basic financial support to Singaporeans in the event of severe disability, especially during old age, and who require personal and medical care for an extended duration (i.e. long-term care).

Careshield Life provides lifetime and worldwide Coverage and lifetime payouts. Singaporeans will continue to be covered for life once you have completed paying all your premiums, which will happen in the year you turn age 67 or 10 years after you join the scheme, whichever is later. Regardless of your residence, you will remain covered, and be able to make a claim and receive payouts, if you are enrolled and continue to pay your premiums.

In order to make a claim, you need to be assessed by a MOH-accredited severe disability assessor as being unable to perform at least three out of the six Activities of Daily Living (ADLs).

Singaporeans also have the option to supplement the basic coverage provided by CareShield Life with supplement plans offered by private insurers. These plans typically offer higher payouts and/ or lower claim threshold, such as only requiring only two out of six ADLs.

ElderShield was a national insurance scheme that aims to provide basic insurance coverage to Singaporeans who are in need of long-term care support during their old age.

Unlike MediShield Life, which is compulsory for all, ElderShield is an opt-out scheme. That means all Singaporeans and Permanent Residents (PRs) can choose to opt-out of the insurance scheme if they wish to. This has been replaced with CareShield Life for new cohorts born in 1980 and after, while those born in 1979 or earlier have the option to enroll in CareShield Life.

#5 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.

#6 Community Health Assist Scheme (CHAS)

The Community Health Assist Scheme (CHAS) enables all Singapore Citizens, including Pioneer Generation and Merdeka Generation cardholders, to receive subsidies for medical and/or dental care at participating General Practitioner (GP) and dental clinics. This scheme has been expanded beyond the lower and middle income group to include all Singapore Citizens.

Using CHAS, you can also enjoy $2 to $5 fixed fee for recommended health screenings under Screen for Life.

#7 Pioneer Generation Package And Merdeka Generation Package

Additionally, Singapore seniors who qualify for the Pioneer Generation Package or the Merdeka Generation Package also receive additional benefits on top of the full CHAS benefits. These include MediSave top-ups and additional premium subsidies for MediShield Life.

#8 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.

#9 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 ends once employment ends.

#10 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!

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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DollarsAndSense.sg

Complete Guide To Healthcare Financing In Singapore

Singapore’s Healthcare System

#1 Subsidies

#2 MediSave

#3 MediShield Life And Integrated Shield Plans

#4 CareShield Life/ ElderShield

#5 Medifund

#6 Community Health Assist Scheme (CHAS)

#7 Pioneer Generation Package And Merdeka Generation Package

#8 Private Insurance

#9 Corporate Healthcare Benefits and Insurance

#10 Preventative Healthcare

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