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BHS increase to $52K from 1 Jan 2017

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Old 31-12-2016, 03:47 AM   #31
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You can call MediShield Life by its real name, or you can be childish.
So what would you call an insurance that you pay $600 every year but you can only claim back $530?
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Old 31-12-2016, 07:20 AM   #32
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So what would you call an insurance that you pay $600 every year but you can only claim back $530?
Not MediShield Life. MediShield Life pays up to $100,000 per year per policyholder.

Please run the numbers for a 10 day hospital stay, other things being equal, and then get back to us.
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Old 31-12-2016, 08:05 AM   #33
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It makes perfect, medical actuarial sense, at least if you want to plan ahead (not a bad idea). If Singaporeans suddenly start having more and smarter babies (or if the nation imports many more), then the premiums (taxes) could be reduced, or payout ratios improved, or covered benefits expanded, or some of all of the above.

Assuming the first principle (rapidly graying population), you could probably do it that way if you also:

(a) Returned the funds to Medisave (or never took them out in the first place), including any premiums paid in cash;
(b) Increased Medisave Account caps (the BHS) a bit faster;
(c) Required inherited Medisave Accounts to go into the heirs' Medisave Accounts (instead of as cash payouts), or toward medical charities.

But there'd still be some distributional problems with that substitution. Not everybody has a Medisave Account of moderate or greater size.

The bottom line is that, if you've got a graying population (we do), then medical spending is almost certainly going to have to grow as a share of the national economy, even if you want to maintain only equal per capita services. (And that's not a given either. Example: the HPV vaccine, recently improved. GARDASIL 9 costs a few hundred dollars per person -- age 9 or 10 is the perfect time to vaccinate -- but probably prevents about 2/3rds of all cervical cancers decades later. And may allow less frequent gynecological checkups -- with 6 month longer gaps between checkups, for example. It's helpful to men, too, in reducing certain less common forms of cancer. Some governments are subsidizing that new vaccine in universal vaccination programs. Singapore is not, not yet. Should Singapore? It can afford it, and her people would be better off, but public medical spending would have to rise even faster to make it happen.)

Yes, you could put the whole financing system on a strict "pay as you go" model, and make MediShield Life inflows equal outflows every year. But the problem with that is that the public has to ride a more sharply rising cost curve year to year, with faster MediShield Life premium increases, well above the rate of general inflation. It's a choice, and the government has made a considered one, if nothing else.
Thanks for your reply.

I do understand the constraints involved in the planning and implementation of a programme of such a scale. The large number of variables means that it is almost impossible to achieve a nett zero situation where premiums paid are exactly equal to the pay-outs made. It would not be realistic to expect such an ideal situation happening in practice although we should strive towards it all the time.

Nevertheless, the points that I wish to highlight and which I feel have not been adequately addressed can be summarised as the following:

i. our Medisave accounts are meant to provide us (CPF members) a financial buffer during hospitalisation and other medical emergencies

ii. the funds parked in these accounts, though not directly accessible, still belong to us and are considered part of our assets

iii. interest is currently payable on these funds at a rate of 4% or more per year

iv. MediShield Life premiums are paid from our Medisave accounts in the course of each year and are pooled by MediShield Life

v. funds withdrawn from our Medisave accounts for such premiums do not generate interest from the point of withdrawal onwards

vi. there have been surpluses achieved by the MediShield Life programme so far where total pay-outs have been less than total premiums paid by us

vii. surpluses point to premiums having been excessive due to a conservative stance adopted during the programme implementation

viii. save for a generic cookie-cutter "plan for rainy days" response to queries by some CPF members, there are still no clear plans on how these surpluses are to be utilised moving forward

Do you feel that it may be more equitable to have a year-end exercise where excess premiums paid are refunded to the individual Medisave accounts in proportionate amounts including potentially immense amounts of interest that would have otherwise been incurred (and could have been incurred on compounding basis in future) had these funds not been withdrawn?

Such an arrangement would support the original main objective of Medisave.
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Old 31-12-2016, 08:29 AM   #34
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Medisave is a protection net. If you have critical medical condition, it may wipe out your whole savings plus whatever asset you have.

This happen frequently in China due to lack of social protection system and huge population base.

It can happen to anybody, the person who replied here are fortunate ones that do not have any medical condition at all. A simple surgical operation is enough to wipe out quite a substantial amount in medisave(assume no medical insurance coverage).
Cancer treatment can cost even more, up to few hundred thousands. So having sufficient protection at reasonable cost is important.

Medisave can be used to pay medishield life and that channel back to a commom pool to be used. It is a social safety net.
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Old 31-12-2016, 08:33 AM   #35
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Compare with other countries if possible.

By introducing medishield life, the government has effectively solving the problem from the root.
Next time the frequency people asking for donation due to medical condition will be reduced significantly.
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Old 31-12-2016, 09:01 AM   #36
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Medisave is a protection net. If you have critical medical condition, it may wipe out your whole savings plus whatever asset you have.

This happen frequently in China due to lack of social protection system and huge population base.

It can happen to anybody, the person who replied here are fortunate ones that do not have any medical condition at all. A simple surgical operation is enough to wipe out quite a substantial amount in medisave(assume no medical insurance coverage).
Cancer treatment can cost even more, up to few hundred thousands. So having sufficient protection at reasonable cost is important.

Medisave can be used to pay medishield life and that channel back to a commom pool to be used. It is a social safety net.
Regardless of the financial costs, I believe no one likes to suffer from sickness.

However medical emergencies do happen and as you have said, it is very important to protect oneself against any financial devastation. The worst thing that can happen is when one is ill in both body and finances.

I agree with your points to a certain extent, at a very high-level. Drilling down to the details though, do you feel MediShield Life provides sufficient protection?

Personally I have experience with the costs involved with cancer and fully understand the justifications for insurance and financial protection.

However, tapping on that personal experience, there are a few points that I would like to raise:

a. the root of the issue of high medical costs does not start in the consumption end of the equation, it lies in the supply end

b. there has been a progressive exodus of many experienced specialists from public healthcare to the private sector

c. this affects the robustness and thus attractiveness of public healthcare

d. many medical conditions nowadays require specialist attention which public healthcare in Singapore does not have the experience and expertise to treat effectively - from sarcomas to neuroblastomas, the list is growing longer by the day

e. this exodus is not just a short-term ailment. It produces long-term effects because the effective transfer of relevant knowledge has to start with a group of mentors who have first-hand experience and know-how. Without these mentors, the chain of knowledge transfer and thus the growth of public healthcare are broken

f. this starts a vicious cycle when patients flock to private healthcare, not for the comfortable wards and beds, and definitely not the fact that they are insured to the hilt. Instead, they head towards private healthcare because the people who have the knowledge and experience to treat their illnesses have moved there

g. the second part of the vicious cycle comes in when private healthcare costs (and margins) rise in response to this burgeoning demand, more public healthcare specialists turn private due to the better remuneration and bonuses, and the gap between private and public healthcare consequently worsens

It would be futile trying to attack rising medical costs by tackling the demand-end of the equation because Singapore is highly accessible to the affluent from the region and the world. It would be necessary to target the supply-end in order to reverse the vicious cycle that our healthcare system is in at the moment.

1. make public healthcare competitive where sufficient specialists with the required experience knowledge are available to treat patients effectively

2. invest in bringing (and keeping) specialists within public healthcare and make this available to Singaporeans only. Provide reasonable and competitive remuneration and provide bonuses tagged to the success rates of patient recovery

3. impose a dynamic surcharge on overseas patients who come to Singapore for medical treatment and directly channel the revenue from such taxation to the support of public healthcare infrastructure. The higher the demand from overseas, the higher the surcharge goes

While the initial costs to the government may seem high, this will throw a cog in the wheel of the present vicious cycle by stemming the outflow of public healthcare specialists to the private sector.

Patients that have access to cost-effective public healthcare will no longer flood the private healthcare sector. This results in overall reduced demand and provides a reality check for unsustainable private healthcare price tags.
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Old 31-12-2016, 09:06 AM   #37
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Compare with other countries if possible.

By introducing medishield life, the government has effectively solving the problem from the root.
Next time the frequency people asking for donation due to medical condition will be reduced significantly.
I do not understand the need for us to compare our systems with other countries that are facing even worse problems. In constantly doing such comparisons, we end up patting ourselves on the backs for just average (and sometimes sub-par based on absolute terms) performance and consequently there is no hunger for further improvement.

Why don't we just focus on the fundamentals and get our systems to function better progressively instead of telling ourselves that we are much better than our neighbours and peers?

This applies not just to our healthcare systems.
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Old 31-12-2016, 09:28 AM   #38
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Do you feel that it may be more equitable to have a year-end exercise where excess premiums paid are refunded to the individual Medisave accounts in proportionate amounts including potentially immense amounts of interest that would have otherwise been incurred (and could have been incurred on compounding basis in future) had these funds not been withdrawn?
First of all, who said the premium surplus isn't collecting interest?

OK, stepping back for a moment here, Medisave alone -- especially but not only for less affluent Singaporeans -- cannot possibly cover catastrophic medical needs. If nothing else, insurance must cover those needs, the needs individuals themselves cannot bear alone. In the modern world, with modern medicine, and the reasonable medical expectations of a now developed society, $10 and an aspirin simply isn't enough. A program with individual savings alone, spent individually, can't work. There has to be at least a catastrophic insurance component.

So the government (rightly) juiced up the catastrophic medical insurance component, primarily with MediShield Life. But that wasn't/isn't free. So it mandated premiums, made those premiums only partially age and preexisting condition rated (young, healthy adults subsidize everyone else, including their older selves), subsidized premiums for certain groups (e.g. poorer Singaporeans), and required participation (to avoid adverse selection and "death spiral" problems). All of that makes public policy sense. We can quibble about levels -- I think MSL ought to be more generous, with a higher average premium, and with more progressive tax financing -- but the core principles are perfectly sound.

Another decision the government made was to set the premiums conservatively, with a forecast surplus, partly because they couldn't fully predict how medical consumers and providers would react and partly because of demographic destiny. That, too, seems prudent. If the government had mandated that you buy MSL (the base plan) from one of three designated private insurance carriers, then (more or less) you would have had the new U.S. system in basic construction. The private carriers expect profits, so that (and more) is where surpluses would go. But more importantly you'd get wild price fluctuations as the underwriters try to gain experience in the market, with associated difficulties especially for people on fixed incomes. And that's exactly what happened in the U.S., although the U.S. has more generous subsidies for lower income households in order to soften the sharp premium increases. (Insurers underpriced due to white hot competition, and now they're correcting. Much more turmoil is likely with the new Republican/Trump Administration since they're utterly fanatical and non-reality-based, but that's another topic.)

Anyway, Singapore didn't do that. Singapore set MSL premiums conservatively, and now a surplus is accumulating. It's accumulating in public hands, not in corporate profits eventually returned to private shareholders. Or, to borrow an earlier remark, the surpluses aren't going into a black hole. Once the government gains some more MSL actuarial experience, in order to get a more precise handle on the magnitude of the surplus, they have two basic options. One is simply to hold premiums to smaller price increases than realities would normally require. Indeed, that was planned all along, to do some of that. So instead of 7% average annual premium increases they might be 2%, or whatever. That's good for every MSL participant, but it's particularly good for elderly Singaporeans of more modest (but unsubsidized) needs, those who pay the highest premiums. Another possibility is to reduce that surplus in the form of more generous coverage benefits. And, I suspect, that was/is the plan, too. As people discover the ins and outs of MSL they're discovering where the gaps are, where benefits aren't generous enough. I expect some gap filling over time.

To summarize, if you value relative premium and benefit stability amidst a graying population (and most people do, especially the elderly), then having some premium surplus to start is a great way to start. I can't disagree with that. The U.S. analogy is instructive again, with U.S. Medicare. Medicare is enormously popular in part because it's more stable. Currently the Medicare trust fund has enough surplus to hold the whole program steady for another decade plus, with no benefit or premium changes (beyond what's already baked in). So participants can set their household budgets and live their lives without extra worry. The next administration threatens to upend that stability, but that's also another topic.

Last edited by BBCWatcher; 31-12-2016 at 09:33 AM..
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Old 31-12-2016, 09:47 AM   #39
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I do not understand the need for us to compare our systems with other countries that are facing even worse problems.
It is unreasonable and unrealistic to expect any government to outperform all 200 other governments on a sustained basis and by a large amount. Context is important.

And it's not necessarily true that other countries have worse problems. Singapore is facing enormous challenges, most especially in its globally lowest (or nearly so) birth rate. Singapore is going to have an extremely old population, and medical needs will rise rapidly. It's Singapore's demographic destiny. If Singapore is doing better than countries that don't have this demographic problem, that's important perspective.

As an analogy, no, I don't think Singaporeans should be disappointed that their government hasn't built Changi Spaceport yet, with daily Singapore Spacelines two hour nonstop service to London, New York, and Paris. Strive for improvements, sure, but also be realistic.

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Old 31-12-2016, 09:55 AM   #40
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Actually government already started to tackle supply end cost for government hospitals and this can be seen from only mild increase in medical cost over the last 3 years. The problem actually lies with private hospitals. The cost has been spiraling up for the past few years. They can charge high and lure experienced doctors to join private sector by offering shorter working hour and more holidays.
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Old 31-12-2016, 09:57 AM   #41
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The reason why I quoted other countries are simply because I feel that Singapore system is already one of the best: doesn't overburden public fund and adequate protection for residents.

It is already much better than neighboring countries imo.

I do not understand the need for us to compare our systems with other countries that are facing even worse problems. In constantly doing such comparisons, we end up patting ourselves on the backs for just average (and sometimes sub-par based on absolute terms) performance and consequently there is no hunger for further improvement.

Why don't we just focus on the fundamentals and get our systems to function better progressively instead of telling ourselves that we are much better than our neighbours and peers?

This applies not just to our healthcare systems.
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Old 31-12-2016, 11:59 AM   #42
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First of all, who said the premium surplus isn't collecting interest?
I am sure it is collecting interest but definitely not for us whose Medisave accounts the premiums have been and will continue to be withdrawn from. This is one of the factors for improvement that I am highlighting and that I feel should be addressed sooner than later.

OK, stepping back for a moment here, Medisave alone -- especially but not only for less affluent Singaporeans -- cannot possibly cover catastrophic medical needs. If nothing else, insurance must cover those needs, the needs individuals themselves cannot bear alone. In the modern world, with modern medicine, and the reasonable medical expectations of a now developed society, $10 and an aspirin simply isn't enough. A program with individual savings alone, spent individually, can't work. There has to be at least a catastrophic insurance component.
Insurance has become necessary in today's world, this I do not disagree with you. However insurance is not a miracle salve as you do also realise. Instead, it is but a stop-gap measure while the policy-makers of Singapore (and the world at large) struggle with rising costs due to imbalances created by global fiscal conditions that came about from bad fiscal policies (inflation, rich-poor divides, to name a few).

That MSL fits nicely into this picture cannot be disputed. It is the poster-child insurance programme that has been painted to be beneficial to the less affluent (usually the elderly and destitute).

However, one cannot treat only the fever and not the sickness. MediShield Life is like paracetamol. It addresses the fever (individual having to pay for high healthcare and medical costs) but not the underlying causes (trend of rising costs, non-competitiveness of public healthcare).

In the context of our discussion, we are not talking about MSL solving the root causes of the healthcare issues we are facing as a society but whether even as fever-treatment, MSL is optimal and effective i.e. does it bring the fever down sufficiently at a justifiable cost to the patient?

My view is that it does not lower the fever sufficiently because the individual patients still end up out-of-pocket in spite of the increased premiums that have been paid, and that it is not cost-effective because the substantial surplus that the programme has achieved reflects the fact that we have been over-paying in terms of the premium amounts. Thus there is still room for major improvement.

So the government (rightly) juiced up the catastrophic medical insurance component, primarily with MediShield Life. But that wasn't/isn't free. So it mandated premiums, made those premiums only partially age and preexisting condition rated (young, healthy adults subsidize everyone else, including their older selves), subsidized premiums for certain groups (e.g. poorer Singaporeans), and required participation (to avoid adverse selection and "death spiral" problems). All of that makes public policy sense. We can quibble about levels -- I think MSL ought to be more generous, with a higher average premium, and with more progressive tax financing -- but the core principles are perfectly sound.
As part of the public consultation for MSL, did the government consider the possibility of tapping on existing large insurance bases e.g. directly function as an insurer through reinsurance with obvious advantages such as lower premiums due to the increased base size?

Another decision the government made was to set the premiums conservatively, with a forecast surplus, partly because they couldn't fully predict how medical consumers and providers would react and partly because of demographic destiny. That, too, seems prudent. If the government had mandated that you buy MSL (the base plan) from one of three designated private insurance carriers, then (more or less) you would have had the new U.S. system in basic construction. The private carriers expect profits, so that (and more) is where surpluses would go. But more importantly you'd get wild price fluctuations as the underwriters try to gain experience in the market, with associated difficulties especially for people on fixed incomes. And that's exactly what happened in the U.S., although the U.S. has more generous subsidies for lower income households in order to soften the sharp premium increases. (Insurers underpriced due to white hot competition, and now they're correcting. Much more turmoil is likely with the new Republican/Trump Administration since they're utterly fanatical and non-reality-based, but that's another topic.)
As mentioned in my earlier reply, I understand that it is not possible to achieve the perfect situation where premiums paid are exactly equal to the pay-outs. However, what I am uncomfortable about is how the relevant authorities have not convincingly and conclusively addressed:

i. that we have overpaid on our premiums and thus lost out individually on that and the interest that would have been earned in our Medisave accounts

ii. their concrete plans on how the surplus will be utilised instead of holding the surplus without actual realisable plans for the use of the funds

Anyway, Singapore didn't do that. Singapore set MSL premiums conservatively, and now a surplus is accumulating. It's accumulating in public hands, not in corporate profits eventually returned to private shareholders. Or, to borrow an earlier remark, the surpluses aren't going into a black hole. Once the government gains some more MSL actuarial experience, in order to get a more precise handle on the magnitude of the surplus, they have two basic options. One is simply to hold premiums to smaller price increases than realities would normally require. Indeed, that was planned all along, to do some of that. So instead of 7% average annual premium increases they might be 2%, or whatever. That's good for every MSL participant, but it's particularly good for elderly Singaporeans of more modest (but unsubsidized) needs, those who pay the highest premiums. Another possibility is to reduce that surplus in the form of more generous coverage benefits. And, I suspect, that was/is the plan, too. As people discover the ins and outs of MSL they're discovering where the gaps are, where benefits aren't generous enough. I expect some gap filling over time.
Are these your conjecture or are they plans revealed by the relevant authorities? What I am trying to say here is that if they intend to hold the surplus, it would be fair to expect a reasonably thought-out plan directly from them (and not hypothetical conjecture by members of the public) on how the surplus will be utilised moving forward to provide fair compensation to those who have already paid the premiums.

To summarize, if you value relative premium and benefit stability amidst a graying population (and most people do, especially the elderly), then having some premium surplus to start is a great way to start. I can't disagree with that. The U.S. analogy is instructive again, with U.S. Medicare. Medicare is enormously popular in part because it's more stable. Currently the Medicare trust fund has enough surplus to hold the whole program steady for another decade plus, with no benefit or premium changes (beyond what's already baked in). So participants can set their household budgets and live their lives without extra worry. The next administration threatens to upend that stability, but that's also another topic.
You have pointed out the weakness in the approach of generating and holding surplus in any national health insurance programme. Who dictates how the surplus will be used and how it should be held? If there is no legislation in place to specify these, then there is also no guarantee that the surplus can continue to be well-managed and safeguarded against abuse in future. Even with legislation, certain major events such as change of government (in Singapore's context) present risks to such an approach.

The bottomline is that I am concerned by the taking of the ability to manage my own monies out of my own hands at various levels (the first by moving it compulsorily into Medisave, and then by taking it out of Medisave and shifting it into the surplus of the MSL).
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Last edited by HappyOz; 31-12-2016 at 12:03 PM..
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Old 31-12-2016, 12:11 PM   #43
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The reason why I quoted other countries are simply because I feel that Singapore system is already one of the best: doesn't overburden public fund and adequate protection for residents.

It is already much better than neighboring countries imo.
I would disagree with you on the two points that you highlighted:

a. doesn't overburden public funds - do we draw the line where the premiums paid out of our Medisave accounts are considered private funds and not public monies?

b. adequate protection - speaking from personal experience, the coverage provided by MSL is far from sufficient to shield one from financial devastation.

As for comparing with peers and neighbours:

Does the gold medallist in the Olympics stop trying to improve himself once he has shown himself to be the best amongst his peers in that session?

Frankly I feel that the notion of "I am better than the neighbours and therefore I am doing well" sounds like an excuse for paltry performance and is not good for the continued development of any person or nation.

I have scoured the historical records of speeches made by our old guard in the 70s and 80s - Goh Keng Swee, Toh Chin Chye, S Rajaratnam, and even Lee Kuan Yew - and did not hear them spouting anything close to this kind of comparison with our poorer neighbours.
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Old 09-02-2017, 08:23 AM   #44
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Any new figure next year?
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Old 09-02-2017, 10:32 AM   #45
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Any new figure next year?
Last year, they announced the 2017 BHS only in Nov...
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