Thursday, 1 February 2018

ElderShield review committee proposes severe disability insurance scheme be made compulsory with coverage starting from age 30 instead of 40

* ElderShield to be renamed CareShield Life with higher, lifetime payouts from 2020 -27 May 2018

Review Panel wants to expand ElderShield coverage in interim recommendations
It proposes making scheme compulsory for future cohorts and starting premiums earlier
By Linette Lai, Health Correspondent, The Straits Times, 31 Jan 2018

ElderShield coverage should be made compulsory for all - including those with pre-existing disabilities - according to the committee reviewing the insurance scheme for people with severe disabilities.

It recommended that people start paying premiums at the age of 30 rather than 40, and suggested that the Government, rather than private insurance providers, administer the scheme. It also called for the claims process to be simplified.

The committee gave its interim update yesterday, with the full set of recommendations expected to follow by the middle of this year.

If accepted, its proposals will apply only to Singaporeans aged 30 to 40 who are joining ElderShield for the first time. People who have previously opted out will not be made to go back on the scheme.

"We want ElderShield to be a social safety net, and we all have a collective responsibility to take care of those with disabilities," said Mr Chaly Mah, who chairs the ElderShield Review Committee.

In a Facebook post yesterday, Senior Minister of State for Health Chee Hong Tat said an enhanced ElderShield scheme would enable Singaporeans to "pool our risks and resources in preparation for old age".

"It is an important pillar of Singapore's social safety net as our society ages," he said. "The Government will look at providing premium subsidies to keep the premiums affordable for lower-and middle-income Singaporeans."

Currently, all Singaporeans join the scheme automatically when they turn 40, and are covered by one of three private insurers - Aviva, Great Eastern or NTUC Income - but they are able to opt out.

Although the opt-out rate in recent years has been about 5 per cent, more than a third of people opted out when the scheme started in 2002.

Money is paid out when people cannot perform three of the six "activities of daily living" on their own. These are washing, dressing, using the toilet, feeding oneself, moving around indoors and getting from the bed to a chair or vice versa.

Mr Mah, who is also the chairman of the Singapore International Chamber of Commerce and the Singapore Accountancy Commission, said: "It is clear to us that the average Singaporean does not understand the risk of severe disability... When you underestimate this risk, it is easy to take the decision to opt out."

Yet half of Singaporeans who are healthy at the age of 65 are at risk of developing a long-term disability over their lifetime, according to Health Ministry estimates.

The committee said it is looking at the size of payouts and the duration for which they are given out, which could be different from now. Premiums could also increase.

Premiums differ depending on a person's age when he signs up for the scheme. But if one chooses to drop out halfway, he might not be entitled to any payouts.

People felt having the Government as a single administrator would make the claims process easier to navigate, said Ms Chan Chia Lin, who chaired the government administration sub-committee. "The feedback was that being a national scheme, it should be administered in a non-profit manner," added Ms Chan, who is the director of private investment firm Holywell.

The committee also wants to make the process of making claims easier, after receiving feedback that it can be challenging.

"All this heightens the stress of the patient and the caregiver, and we want to tackle this," said Dr Loh Yik Hin, chief executive of St Andrew's Community Hospital who chaired the sub-committee for claims assessment.

FAQ on ElderShield and proposed changes
By Linette Lai, Health Correspondent, The Straits Times, 31 Jan 2018


Both ElderShield and MediShield Life are insurance schemes. But ElderShield is for people with severe disabilities, while MediShield covers large hospital bills.

As a general rule, the total and permanent disability insurance cover offered by private companies ends at age 65.

With ElderShield, you stop paying premiums after age 65. You can continue to make a claim at any age afterwards, but the benefits will last only up to six years.


All Singaporeans are automatically enrolled into ElderShield when they turn 40, although those with pre-existing severe disabilities will not be covered.

To make a claim, you must be unable to perform at least three of the six activities of daily living: Washing, dressing, feeding yourself, using the toilet on your own, moving around indoors on your own, and getting yourself from a bed to a chair or vice versa.

Download the claim form from your private insurer's website and then get an accredited doctor to give an assessment of your disability. The first payout will be given after your claim is approved.


It wants to make ElderShield compulsory for everyone who comes on board, and lower the age for joining from 40 to 30. It also wants the Government, rather than private insurers, to administer the scheme. It called for the claims process to be made easier.


Currently, people on the scheme get a maximum of $400 a month for six years, at most. People have pointed out that this is not enough, although the review committee has not made any recommendations yet on this issue.


The committee suggests that it be made compulsory for everyone once they hit 30 as part of "collective responsibility". This includes those with pre-existing disabilities, which is not the case now.

People can opt out of ElderShield now. But if the committee's suggestions are accepted, they can no longer do it.


No, you will not be made to join. If the committee's proposals are accepted, the scheme will be made compulsory only for people joining it for the first time.

Plan to improve ElderShield will boost social safety net: Experts
But they highlight issues that must be ironed out, such as affordability of premiums and need to educate people
By Linette Lai, Health Correspondent, The Straits Times, 31 Jan 2018

The proposed changes to ElderShield - Singapore's disability insurance scheme - will strengthen the country's social safety net, said experts.

But at the same time, certain issues - such as the affordability of premiums and convincing people of the need to review the scheme - have to be ironed out before any changes are made, they added.

Yesterday, the ElderShield Review Committee released a set of four recommendations on how to improve the scheme. These include lowering the age at which people join the scheme and making it compulsory for everyone in the group to come on board - even those with pre-existing disabilities.

The 14-member committee also proposed that the Government take over as administrator and that its claims process be simplified.
It came up with these suggestions after 26 focus group discussions with more than 800 Singaporeans, including financial advisers, academics and community groups.

At these sessions, people also discussed whether ElderShield payouts should be increased or their duration extended.

Those on the scheme now get a maximum of $400 a month for six years at the most.

The Health Ministry said that between 2002 and the end of 2016, ElderShield paid out about $114 million in claims.

The committee has not yet made recommendations on these issues. It has also not said how the proposed changes could affect premium costs.

Dr Marissa Lee Medjeral-Mills, executive director of the Disabled People's Association, said that the Government should waive premiums for those who have severe pre-existing disabilities.

They are often unable to secure employment, "and those that do are often not paid as much as able-bodied employees", she said.

"This means they are less likely to be able to build savings, or have enough in their Medisave accounts to pay an ElderShield premium."

She added that their relatives, after helping them over the years, may also not have enough in their Medisave.

Associate Professor Angelique Chan, a sociologist who specialises in ageing research, added that people also need to understand that disability is not confined to a minority.

"Once we educate people about the high probability of being disabled themselves, they will be able to see the logic," said Prof Chan, executive director of the Centre for Ageing Research and Education at Duke-NUS Medical School.

She is doing a study, involving more than 5,000 people, that projects that the average 60-year-old woman will live 26 more years, eight of which will be spent disabled in some way.

A man of the same age will, on average, live 22 more years and spend three years of that time disabled.

The Health Ministry estimates that half of the Singaporeans who are healthy at the age of 65 are at risk of a severe disability later.

In fact, lowering ElderShield's enrolment age "makes sense... from a risk-pooling perspective", said insurance economist Joelle Fong, an assistant professor of economics and public policy at the Lee Kuan Yew School of Public Policy.

"It allows more Singaporeans to be covered at a younger age, and helps spread premiums and risk across a bigger pool of policyholders."

ElderShield premiums can be expected to go up with higher payouts: Experts
Ageing population means more payouts, especially amid rising healthcare costs
By Linette Lai, Health Correspondent, The Straits Times, 1 Feb 2018

The proposed expansion of the national disability insurance scheme will offer a better safety net for an ageing population, but people should expect their premiums to go up as payouts rise, said experts.

While the committee reviewing ElderShield has yet to make its final recommendations, experts said an ageing population means more payouts, especially amid higher healthcare costs.

In fact, higher premiums are "inevitable", said Dr Loke Wai Chiong, healthcare sector leader for Deloitte South-east Asia and Singapore. Speaking of the country's "silver tsunami", Dr Loke said premiums will go up "due to the risk pool diminishing in size with lower birth rates, causing the risk borne by insurers to go up".

In Parliament last year, Health Minister Gan Kim Yong said $2.6 billion in ElderShield premiums was collected between 2002 and end-2015, and around $100 million was paid out in claims.

While premiums collected may be far in excess of payouts thus far, the gap has been shrinking and will continue to close, he said.

Recommendations made on Tuesday by the ElderShield Review Committee included removing the option to opt out, thus making the scheme compulsory for new cohorts, and lowering the enrolment age from 40 to 30.

Committee chairman Chaly Mah said it had received feedback that payouts should increase because of rising healthcare costs.

"We are looking at the premium structure at the moment," he told reporters on Tuesday. "As you all know, there is no free lunch."

Experts said a change in the scheme's age criteria could help to mitigate the rise in premium costs.

Said Ms Woo Shea Leen, who is insurance leader at PwC Singapore: "Bringing forward the enrolment age will help slow down the increase in premiums associated with the rising cost of healthcare."

Currently, premiums depend on biological sex and the age at which a participant joins the scheme.

A man who joined at age 40 in 2009 and remained healthy until he turned 65 would have paid $174.96 every year for 26 years. This amounts to about $4,550.

If he had to make a disability claim later on, he would get monthly payouts of $400. Assuming he got these payouts for the maximum of six years, this would come up to $28,800.

Ms Lim Shujun, who is an actuary and director at financial advisory firm InsureDIY, said: "There are products already in the market that can pay much higher benefits - for example, up to 80 per cent of your pre-disability income and for a longer duration. Of course, these are more expensive."

She added that ElderShield benefits and payouts must be improved in order for the scheme to meet Singaporeans' needs. "But this should be balanced with the need to keep the scheme affordable for the lower income," she said.

Ultimately, ElderShield - like MediShield Life for large hospital bills - is meant to provide only basic coverage, said experts.

Assistant professor of economics and public policy Joelle Fong, who is from the Lee Kuan Yew School of Public Policy, said: "I believe it is designed to be an inexpensive, bare-bones severe disability insurance scheme for everyone."

She added: "Of course, to have a meaningful scheme, monthly payouts should also be adequate."


What you should know about ElderShield
A panel has proposed changes to the scheme; experts weigh in on what enhancements they would like to see
By Lorna Tan, Invest Editor/Senior Correspondent, The Sunday Times, 4 Feb 2018

The ElderShield insurance scheme, which offers protection against severe disability, is getting a makeover.

The committee reviewing it has suggested making it compulsory for all and lowering the age at which people join the scheme.

Financial experts welcomed the changes that are under way, especially the proposal to cover those with severe, pre-existing disability.

"With medical technology advancement, we are expected to live longer. However, we are not sure how many will be healthy years. We may need assistance as we age and that will require financial resources," said Mr Alfred Chia, chief executive of SingCapital.

Mr Daniel Lum, director of product and marketing at Aviva Singapore, said if someone is left wheelchair-bound after an accident or illness, the monthly payouts from ElderShield would pay for long-term costs such as daily care, special aids and home modifications.

"This relieves the need to rely on one's family for financial support, which - in the light of Singapore's low replacement levels - may be increasingly hard to achieve."

However, ElderShield is just meant to be a basic coverage. This explains why Mr Chia, 50, has opted to purchase a supplementary plan - on top of his basic ElderShield 300 plan - to obtain higher payouts that will continue for as long as he lives.

When he was 40, he bought the Aviva MyCare plan - with an annual premium of $736.60, of which $600 is payable through Medisave - which comes with lifetime cover. In the event of a claim, he will receive monthly payouts of $2,000 for life. The premiums are payable annually and will cease if a claim occurs.

Similarly, Mr Christopher Tan, 47, chief executive of Providend, also owns an Aviva MyCare plan. He said he did not opt out of ElderShield as he wanted to maximise the use of his Medisave when it came to his severe disability coverage.

Central Provident Fund (CPF) members can pay the annual premiums of their basic ElderShield plan from their Medisave account. They are also allowed to withdraw up to $600 annually from their Medisave for ElderShield supplements.

Most financial experts agreed that ElderShield should be made compulsory for all future cohorts with no opt-out allowed, so as to increase the risk pool and widen the safety net.

The 14-member committee also proposed that the Government take over as administrator from the three private ElderShield insurers.

This will give the scheme economies of scale and allow it to be operated on a non-profit basis.

According to estimates from the Ministry of Health (MOH), half of Singaporeans who are healthy at the age of 65 are at risk of developing a long-term disability over their lifetimes.

The review committee will also look at the size of payouts and their duration, which means premiums could increase. That's why making the scheme compulsory makes sense - otherwise people could be tempted to opt out and premiums could become unaffordable.

The Sunday Times highlights what you should know about ElderShield.


Launched in 2002, the severe disability insurance scheme was designed to provide basic financial protection to Singaporeans who need long-term care.

In the event of a successful claim, ElderShield policyholders will receive monthly cash payouts for a period, depending on the plan. Those with supplementary plans will have enhanced cover.

All Singapore citizens and permanent residents with Medisave accounts are automatically enrolled in ElderShield at the age of 40, unless they opt out.

The three private insurers appointed by MOH to run ElderShield are Aviva, Great Eastern (GE) and NTUC Income.

Existing illnesses, such as diabetes, are not excluded for those who are auto-covered at the age of 40. However, if you opt out and wish to opt in later, you will be subject to a medical assessment, during which your application may be rejected by the insurer if you have pre-existing illnesses.


Severe disability is the inability of an individual to independently perform at least three of the six activities of daily living (ADLs), with or without mobility aids such as walking aids and wheelchairs.

The activities are washing, dressing, feeding oneself, using the toilet, moving around indoors, and being able to get between a bed and a chair.

Do note that if you are severely disabled prior to your ElderShield enrolment, you cannot make any claims. Make a declaration when you receive your "welcome letter" and any premiums collected from you will be refunded.


There are two basic ElderShield plans.

ElderShield 300 was the default plan for people who joined the scheme between September 2002 and August 2007, with a monthly cash payout of $300 for up to five years.

For ElderShield 400, which was the default plan after September 2007, the monthly cash payout is $400 for up to six years.

For both basic plans, the premium payments cease after age 65, but you can continue to make a claim for severe disability at any age afterwards.

While the basic ElderShield coverage is the same across the board, each insurer's ElderShield supplementary plans offer differentiated and unique benefits, including higher monthly payouts and for longer durations.

For instance, Aviva's ElderShield supplements (MyCare and MyCare Plus) are designed to offer both higher benefits (up to $5,000 monthly payout benefit) as well as a longer payout period (for a lifetime).

For Aviva MyCarePlus and GE ElderShield Comprehensive, claims are triggered when the policyholder is unable to perform two out of six daily activities.

Income's PrimeShield offers a lump sum payout in the event of severe disability equal to three times the monthly payout and a get-well benefit that is also a one-time payout if you recover from severe disability, said Mr Andrew Yeo, Income's general manager for life and health insurance.


Mr Chia hopes the basic ElderShield scheme can lower its claims threshold to two out of six daily activities and a reduced premium for enhanced coverage as well, with a wider pool of lives insured.

Mr Brandon Lam, Singapore head of the financial planning group at DBS Bank, wants more flexibility to be given to ElderShield policyholders to choose higher payouts, if they want more comprehensive cover; to increase the payout duration (from up to six years) and to raise the CPF annual withdrawal limits for ElderShield.

GE's managing director of group marketing, Mr Colin Chan, said any future increase in premiums should be kept affordable for all.


Mr Chia said it is a trade-off between the quality of care you want and what you pay. It makes sense to purchase such coverage when you are younger as you can then lock in the lower premium till the age of 65.

Aviva's Mr Lum suggested that customers look for a plan that covers the aspects they might be concerned about. For example, some customers with children may desire a dependant benefit (which provides a one-time payout if you have children below aged 21), while others may be concerned about the payout amount and period.

Ms Catherine Lum, Providend's insurance specialist, said it is prudent to ask yourself what would be your choice of caregiving, how much you require for the monthly benefit, and how long you are prepared to pay premiums.

Mr Chan said: "As ElderShield currently covers three ADLs, customers may wish to consider ElderShield supplement plans that allow claims to be triggered at an earlier onset of disability (such as the inability to perform two ADLs). More comprehensive coverage has to be balanced against premium affordability."

Instead of looking at each need separately, Mr Lam said he would advise the customer to do a holistic financial review of his circumstances and what he would like to achieve in his retirement years. This would let him plan his resources to reach his financial goals.


Download the claim form from your private insurer's website and get an accredited doctor to assess your disability.

The disability assessment can be done either by visiting the appointed assessor (a fee of $50), or at home via a house call ($150).

If your ElderShield claim is approved, your insurer will reimburse the full cost of the assessment fee to you. You will receive the first payout within 90 days of approval.


To find out, log on to the CPF Board website with your SingPass. Select "My Messages" and check under the "Healthcare" section. If you are covered under ElderShield, this section will also let you know the insurer you are covered under.


So far, ElderShield has been profitable for the three insurers. In Parliament last year, Health Minister Gan Kim Yong said $2.6 billion in ElderShield premiums was collected between 2002 and end-2015, and around $100 million was paid out in claims.

While premiums collected may be far in excess of payouts thus far, the gap has been shrinking and will continue to close, he said.

Mr Lum said MOH made a specific provision in the ElderShield contract for insurers to return part of the accumulated surplus to existing policyholders, if claims turn out to be lower than projected.

He added that Aviva provided a premium rebate in September last year for eligible customers. Recently, Income also gave a rebate to eligible ElderShield customers.

"The ElderShield scheme is still in its early days and long-term claims data and experience have yet to be developed. It is essential to bear in mind that there are real risks of claims rising in the future," said Mr Lum.

Proposed changes to ElderShield put strain on young adults

The ElderShield Review Committee has recommended that ElderShield enrolment be made compulsory, and for people to start paying premiums at the age of 30 (Panel wants to expand ElderShield coverage; Jan 31).

As a young, soon-to-graduate university student about to enter the workforce, I believe I speak for many of my peers when I say we are deeply concerned.

The Government seems to have a distressing enthusiasm for policies that shift the financial burden to the young.

Through MediShield Life, the young Singaporean adult already pays relatively high premiums to subsidise healthcare for the elderly. And the intention behind these changes to ElderShield is to do more of the same. We also have no assurance that we will receive the same benefit in 50 to 60 years' time.

While the intent to take care of the elderly and disabled in Singapore is obviously a noble one, it is disheartening when one considers these changes in the context of the many challenges facing the young adult today: a high cost of living, ever-rising property prices, a difficult job market and rising taxes.

In 1990, a five-room Housing Board flat cost about $70,000. Today, a five-room flat costs more than $350,000 - a five-fold increase.

Instead of recognising these challenges, the country seems bent on alienating its youth with such policies.

May I suggest that the solution is not to spend more, but to spend wisely? For example, the Pioneer Generation Package is estimated to cost about $9 billion, but its handouts do not discriminate between the 75-year-old business tycoon with multiple properties and the 75-year-old who is destitute and homeless. This makes no sense.

I believe that if Singapore can reallocate its resources more wisely, we will not have need for the kind of divisive policies currently being proposed.

Nicholas Soh
ST Forum, 2 Feb 2018

Proposed ElderShield changes make it easier to pay premiums

Mr Nicholas Soh shared his concern that ElderShield and MediShield Life shift the financial burden to the young (Proposed changes to ElderShield put strain on young adults; Feb 2).

Premiums paid by the young in national insurance schemes like MediShield Life and ElderShield are not used to subsidise the elderly.

In ElderShield, an individual pays premiums from age 40 to 65 currently and remains covered for life, even after premium payment stops.

Lowering the inclusion age for ElderShield distributes an individual's premium payment over a longer period during his working years to pay for his own future needs when he grows old. This will make annual premiums more affordable.

The Review Committee is reviewing the ElderShield scheme so that it can better serve as an important element of our social safety net.

The Ministry of Health has indicated that it will look at providing means-tested premium subsidies for lower-and middle-income Singaporeans under the new scheme.

MediShield Life and ElderShield, therefore, help each generation of Singaporeans fund their own healthcare and long-term care needs, and reduce inter-generational transfers.

Without such schemes, taxpayers who are younger will pay for the care of the old who have left the workforce.

As we prepare ourselves for an ageing population, it is important to ensure that an individual's own needs are adequately funded through a net of support, including insurance.

Chaly Mah
Chairman, ElderShield Review Committee
ST Forum, 6 Feb 2018

Best way for society to advance is together

There seems to be a belief that disproportionate burden has been placed on the young to support those who need help (Proposed changes to ElderShield put strain on young adults, by Mr Nicholas Soh; Feb 2).

I am sure all will agree that the best way for us to advance as a society is together.

The liberal, autonomy-centred view, which values the self, needs to be replaced by a more inclusive, communitarian view, where interdependency is valued over independence.

In comparison with other developed countries, we are already paying minimal taxes.

In fact, we can do more to support people to lead full and independent lives.

For instance, while we have done much to be inclusive towards people with disabilities, we still have a long way to go to develop support systems that enable these people to contribute in their own meaningful ways.

A quality of life study by the National Council of Social Service released last year found that six in 10 people with disabilities believe they cannot achieve their hopes and dreams.

We should do more to ensure equitable distribution of income, growth and opportunity, even for those with disabilities and the seniors.

It is perhaps in such a light that I, as a young adult, would place recent developments in strengthening the social security net for all Singaporeans.

After all, we must remember that as we discuss policies that might cause concern to the young, we will all grow old, or might not be able to work, and will have to depend on others for support.

The folk tale, The Old Man And His Grandson - about an old man who was ill-treated by his family because he was old and useless, and his grandson who reminded the adults that they, too, will grow old - comes to mind.

Indeed, it is disheartening to hear of talk about "divisive policies", which alienate people who need care.

A society where interdependency is valued is the only future we must strive for.

Zhuang Kuansong
ST Forum, 5 Feb 2018

In insurance pool, young are risk-sharing with their future selves

In any insurance pool, such as Singapore's ElderShield, the presumption is that, simply by nature that the aged succumb to sickness more readily, the young who are low-cost consumers will subsidise the elderly (Proposed changes to ElderShield put strain on young adults, by Mr Nicholas Soh; Feb 2).

This is true for any given year, except that over the whole life cycle, the young are actually risk-pooling with their future, similarly decrepit, selves.

It makes good sense to buy medical insurance in a big national pool, where premiums are low, when the young are still disease-free and insurable.

Time does fly, and the invincibility of youth and the sense of indestructibility will evanesce, to be replaced with a sense of despair - if insurance protection was not sensibly participated in from a young age, leading to medical treatment foregone.

While it is true that our young have to struggle hard in the midst of global competition, previous generations also faced seemingly insurmountable trials and tribulations.

No generation has inalienable rights to a cushy lifestyle without it being earned, and no amount of captious cavilling against governments will commute this.

The Pioneer Generation Package is not an example of profligate governmental spending.

The recognition of the service and sacrifice that our forebears made to advance Singapore to its present stature is not dependent on how innovatively the pioneers made use of their opportunities.

It is churlish to begrudge honest success.

Yik Keng Yeong (Dr)
ST Forum, 5 Feb 2018

The ElderShield Review Committee released an interim report last month. One writer found it disappointing while another found it sensible and prudent.

Scheme should not be compulsory
By Salma Khalik, Senior Health Correspondent, The Straits Times, 8 Feb 2018

The ElderShield Review Committee's interim report released last month may have addressed some big issues, but it was rather disappointing in not grappling with what people were really concerned about.

ElderShield is a disability insurance that pays people who need help with at least three daily living activities - such as eating, bathing and going to the toilet - $400 a month for six years.

The committee was set up in late 2016, so it has been working on this for more than a year.

Yet all it has come up with was to suggest that people should join at a younger age (30 years, as opposed to 40 years today); that it should be made compulsory; that the Government should take over the running of the scheme and help poorer people pay their premiums; and for the claims process to be easier.

While some may say that these cover the big issues, in fact the committee has not addressed what most people were waiting to hear:

• Will payouts be higher than the current $400 a month, which many have complained is not enough even to hire a helper?

• Will payment go on for more than six years, when data shows that one in three lives 10 years or more after disability has set in?

Will premiums go up, or remain as it is at $174.96 a year for men and $217.76 for women, given that people will pay premiums over a longer period of time since the starting age will drop to 30 years?

• Will there be any change to the conditions that entitle people to start collecting from the long-term care insurance?

To be fair, the ElderShield review report was an interim one, and fuller recommendations are expected at mid-year.

In contrast, the MediShield Life Review Committee produced its full report in under a year. And its task was arguably more difficult, given the complexities of big healthcare bill coverage.


So let's look at what the ElderShield Review Committee has recommended:

• That the Government helps the poor pay premiums.

This is a good idea. The Government already does this for MediShield Life (the national health insurance plan used mainly for hospital care), so such subsidy will likely be forthcoming. This is especially since government aid will be needed, should the poor, who can't afford ElderShield premiums, not get any insurance payout to help them over this difficult time of their lives.

But how much aid should the Government provide and for whom? Since premiums, which come from Medisave, come up to less than $20 a month, only the very poor will need help.

• That the claims process be made easier.

Today, there is a panel of about 140 general practitioners who get to decide who qualifies for ElderShield, when they assess people for their ability to dress, walk around at home, get out of bed, go to the toilet, eat, as well as transfer, for example, from bed to wheelchair.

The committee suggested hospital professionals such as occupational and physiotherapists be also allowed to decide on a person's disabilities. This is a good suggestion, and something that should have been done long ago.

It should not be limited to acute hospitals, but include also community hospitals where most people who need assistance with daily living go for rehabilitation. In fact, such assessments should be extended to professionals at day care centres, since they would know when an elderly client deteriorates to the point where help is needed.

• That the Government take over the running of the scheme.


While the reason for this is to remove the profit motive so that more of the premiums will be used for payouts, I question the wisdom of such a move.

Having the Government take over won't make the scheme more sustainable if the premiums and payouts are the same, as are the assessors. The assessors are independent healthcare professionals. They are the ones who decide if a person qualifies for aid, not the insurance company.

Would removing the profit insurers get from running the scheme lead to more money in the payout pool?

That's difficult to say since the Government does not have the expertise insurers have, so it might even end up costing more for the Government to run ElderShield.

And even if it doesn't, surely the Government can't be expected to take over the running of everything just because it would do it for no profit?

• Have people start contributing at a younger age.

The idea is that a longer period of payment would reduce the amount needed to be paid out annually. People pay premiums till the age of 65. Starting at the age of 40 means paying premiums for 25 years while starting at 30 means total premium will be paid over 35 years.

Given these precedents, it is obvious that there are some people who really do not want to be on some schemes, no matter how sensible it appears for everyone to participate.

On a national level, these are good schemes that benefit society as a whole. But not everything that is for the general good should be forced on all. Otherwise, we might as well stop selling sugar and salt, soft drinks, cigarettes, white rice and the like because these are known to be bad for one's health.

Paternalism has to stop somewhere.

By all means, explain, persuade and encourage them to join in. But don't take the decision out of their hands.

People should be given the freedom to decide for themselves if they want to join ElderShield at the age of 30, or later - as is currently possible - and pay higher annual premiums because of their delay. Or not to join at all. They will have to live with their decision. If they suffer for it, so be it. It was their choice.

ElderShield can shape provision of eldercare services
By Jeremy Lim, Published The Straits Times, 8 Feb 2018

The government-appointed ElderShield Review Committee unveiled its interim findings last week and offered three major policy recommendations - make ElderShield compulsory a la MediShield Life, lower the age of commencing premium payments to 30 years from the current 40, and transfer administration of the scheme from the three private insurers currently to the Government.

While experts praised the recommendations for actuarial thoughtfulness and "nation building" underpinnings, dismay was the reaction of some Singaporeans.

One Singaporean, bemoaning the plight of the young, wrote to The Straits Times Forum page lamenting the Government's "distressing enthusiasm for policies that shift the financial burden to the young".

The review committee was quick to respond, with its chairman clarifying: "Premiums paid by the young in national insurance schemes like MediShield Life and ElderShield are not used to subsidise the elderly."

What was less highlighted was the data also released by the committee on the magnitude of disability in Singapore today: One in two healthy people aged 65 runs the risk of being severely disabled before death; the median duration of disability (before presumably death) is four years and, finally, 30 per cent of those severely disabled remain so for more than 10 years.

These statistics are important in considering the design of ElderShield and whether a classical commercial insurance construct is even the optimal way to finance long-term care.

Insurance is ideally about financial protection through risk pooling against occurrence of an uncommon but expensive event. If the event is common, one should just save for it; if inexpensive, then pay out-of-pocket as the costs of administering an insurance scheme would outweigh any benefits from risk pooling. The classic example is travel insurance: Many would purchase for peace of mind, but only a small minority would make a claim. And because of the unlikelihood of a claim, premiums can be priced low and all purchasers can enjoy peace of mind.

Now bring together the statistics shared by the committee and the principles of commercial insurance, and the limitations show up.

In the ElderShield context, claims are likely to be common. In fact, perhaps as many as half the policyholders will submit claims and draw down from the pooled funds.

Second, unlike in the case of travel insurance where a one-off payout should address the claimant's woes, ElderShield will need to provide for a claimant until death or recovery. Based on the committee's data, roughly one in three will require in excess of a decade of payouts. The current scheme unfortunately ceases payments in the sixth year, and changes here will be necessary.

Seen in this light, the committee's recommendations are eminently sensible and prudent.

Starting young and making the scheme mandatory increases the risk pool and the total amount of funds available. Is this about the young funding the health needs of the elderly? Not at all. The recommendations, if fully accepted by the Government, will effectively change ElderShield into a quasi "savings scheme", albeit mandatory with some degree of risk pooling. As one Straits Times Forum writer puts it, this is about setting aside for one's "future self".

The third major policy recommendation was to transfer administration of the scheme to the Government, positioning ElderShield as a "key pillar of our social safety net".

The committee put forward that doing so would provide the Government greater flexibility to provide subsidies for premiums as well as for future scheme enhancements, while ensuring overall long-term financial sustainability. The social intent aside, the financials support this recommendation.

According to recent figures, between 2002 and end-2016, ElderShield collected $2.7 billion in premiums but paid out only $114 million in claims.

The eye-watering balance of nearly $2.6 billion is, however, not profit for the insurers but monies set aside for future claims as the population ages.

If the actual experience in the decades ahead turns out to be more positive than projected, due to improved health or changes in policy enabling support through other schemes, a government administrator would have the flexibility to offer premium rebates or lower premiums for a period of time.

A government scheme can and must be not-for-profit, but one run by commercial entities cannot be so.

The analogy with MediShield Life at the beginning of this article should not only be on the financing end of the equation.

The revised ElderShield ("Life"?) will become one of the largest buyers of long-term care services in the country. As MediShield Life does, it should consider using its purchasing power on behalf of policyholders to shape the delivery landscape.

While the details are still being worked out, MediShield Life, by setting claim limits and by aligning to the guidance of the Agency for Care Effectiveness, can encourage providers to offer more appropriate and appropriately priced services for the greatest societal and patient benefits.

The current ElderShield scheme construct is, however, that of a cash payout, and levers of policy and influence may lie with the Ministry of Health and its agencies directly rather than with ElderShield.

In any event, the point is that a universal ElderShield, coupled with the full impact of demographic transition, will create substantial demand and ability to pay for long-term care services, and perhaps a somewhat more vulnerable population of buyers.

The Government will need to ensure the supply side of long-term care matches in quantity, type and price what Singaporeans need; it is the responsible parallel to financing reforms.

Finally, even as Singapore works through the right financing and delivery models for long-term care, Senior Minister of State for Health Amy Khor's words in Parliament earlier this week are worth keeping close to heart: "Helping our elderly with their healthcare costs is a joint responsibility with the Government... This is a hallmark of a caring and inclusive society."

The writer is a partner in Oliver Wyman's Asia-Pacific healthcare practice.


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