BHS increase to $52K from 1 Jan 2017

luvalist

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Oh well, gotta continue to save...

From Jan 1, 2017, the Basic Healthcare Sum (BHS), the estimated savings required for basic subsidised healthcare needs in old age, will be raised to S$52,000 for those who turn 65 years old in 2017, and it will be fixed for the rest of their lives. Those aged 66 and above in 2017 have their BHS fixed at $49,800 for their cohort.

http://www.todayonline.com/singapore/cpf-interest-rate-unchanged-q1-2017
 

luvalist

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I'm surprised the increase is more than its 4% interest

Yeah slightly. prob to the nearest '000.

Then I realised for those who already hit the last cap (49,800), once the interest comes in, can almost met the BHS again. so can continue the overflowing. :zonia:
 

doody_

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Medisave is a black hole... money goes in and gets stuck for life. No flexibility in usage as it can only be used for medical needs.
 

BBCWatcher

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Yeah slightly. prob to the nearest '000.
Bingo, you got it.

49849 would round down to 49800. 51149 would round up to 52000. If the underlying increase was actually 49849 to 51149 then that's about +2.61%. So, in all likelihood, $52,000 is the result of a 4% increase with both the prior and new numbers rounded to the nearest $100 increment, and with the to-the-penny underlying amounts calculated from a base year figure.
 

BBCWatcher

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Medisave is a black hole... money goes in and gets stuck for life.
No, that's not correct. Compulsory MediShield Life premiums drain some of your MA every year. If you have dependents, their premiums typically do, too. Those premiums, if nothing else, unstick those funds.

No flexibility in usage as it can only be used for medical needs.
And medical insurance.

Nobody has zero medical expenses. MediShield Life premiums, if nothing else, make sure of that. Assuming adequate emergency funds on hand, and assuming the MA isn't too big (it can't be -- it's capped at the BHS), and assuming you're happy with the yield (>4%, plus the tax savings), at least for that (extremely safe) portion of your total portfolio, the lack of flexibility shouldn't matter too much precisely because you're invariably going to have medical expenses. "Gee, you have to save something for future food consumption. That's not flexible!" Uh, OK, I suppose it isn't, but I plan to eat next year, next decade, and beyond.

Also, if you terminate your citizenship or permanent residence, Medisave funds are immediately, optionally available for withdrawal for any purpose. It's a choice.

When you die, if there's money left over in your MA, it goes to your nominated heir(s). And you should nominate somebody, or some organization, to receive every penny of your remaining CPF. You might end up in a black hole, but your CPF monies don't.
 

antonpoh

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Cpeef like to put this on their website.

MediSave-01_17Jun_zpsed33f06c.jpg


But MA mostly use to buy insurance or pay Medishit Life.

Outpatient claims can only use $200/yr from MA.. and 52k can last aro 260yrs. :s22:
 

BBCWatcher

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Outpatient claims can only use $200/yr from MA.. and 52k can last aro 260yrs. :s22:
No, you forgot the MediShield Life premiums in that calculation. By age 150 the annual premium is pretty high. ;)

There's another part you forgot (as a "young invincible"?): outpatient claims aren't the only medical expenses! As an example (and you might not remember), was your very first day spent at the cinema or in a maternity ward at a hospital?

But OK, go howl at this moon if you want. Here on Planet Earth people really do need medical care. It's probably about 5% of total GDP in Singapore now, and that ain't zero. When you do that math, $52K is a very reasonable number. (And most people don't get that high, unfortunately.)
 

henrylbh

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Nobody has zero medical expenses. MediShield Life premiums, if nothing else, make sure of that. Assuming adequate emergency funds on hand, and assuming the MA isn't too big (it can't be -- it's capped at the BHS), and assuming you're happy with the yield (>4%, plus the tax savings), at least for that (extremely safe) portion of your total portfolio, the lack of flexibility shouldn't matter too much precisely because you're invariably going to have medical expenses. "Gee, you have to save something for future food consumption. That's not flexible!" Uh, OK, I suppose it isn't, but I plan to eat next year, next decade, and beyond.

Also, if you terminate your citizenship or permanent residence, Medisave funds are immediately, optionally available for withdrawal for any purpose. It's a choice.

When you die, if there's money left over in your MA, it goes to your nominated heir(s). And you should nominate somebody, or some organization, to receive every penny of your remaining CPF. You might end up in a black hole, but your CPF monies don't.

My father's MA is about 9k mainly from government.

He never use medisave before except for the first time last year when he was 88yo!!!.

And now he has to pay MSL of 615 (if no further increase) from his MA annually!!! But that's a blessing to me as I have not bought him any medical insurance, even though I have never incurred any medical bill on his health.
 

kehyi4

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re BHS increase, MOH has said that:

"The BHS will therefore be adjusted yearly in January to keep pace with the growth in Medisave use by the elderly." Source

It's not a straightforward 4% increase every year.
 

luvalist

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Medisave is a black hole... money goes in and gets stuck for life. No flexibility in usage as it can only be used for medical needs.

even medical needs also got limits. sigh.

So I just hope to quickly max the requirements so that money flow to other account.
 

BBCWatcher

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My father's MA is about 9k mainly from government.
OK, so it's mainly a gift from other taxpayers (some foreign). There's nothing bad in that!

He never use medisave before except for the first time last year when he was 88yo!!!.
OK, but you can't expect the government to have a national program with near-universal participation based on the medical experiences of one lucky 88 year old. Who won't be lucky forever (we all die, eventually), and medical spending is heavily concentrated at end of life. Not in every individual case, of course. It's possible to die suddenly, skip medical care (and medical expenses), and proceed directly to the funeral. Or not.

And now he has to pay MSL of 615 (if no further increase) from his MA annually!!!
Yes, paid mostly out of a gift from other taxpayers in his case.

But that's a blessing to me as I have not bought him any medical insurance, even though I have never incurred any medical bill on his health.
And that's a key point. MA isn't only about the account holder. It's about his/her heirs, too. If somebody you care about (parent, grandparent) exhausts his/her savings -- easy to do with just a short time in the hospital or hospice -- then who takes care of mom, dad, grandpa, or grandma? The kids or grandkids, usually. So their income and wealth is impacted.

So if you have nobody (or no cause) you care about beyond yourself -- no children, no grandchildren, no charity -- then I suppose you could complain about MA (but demand free medical care anyway ;)). But again, government can't make a national program only for the minority with no intergenerational or other legacy considerations. And denying necessary medical care to Singaporeans is not something anybody rational wants. So, there's a medical financing system, and part of it is MA.

Another possible choice is to do what a lot of other countries do, have at least a single government payer (paid out of general tax revenues), and just pay the medical expenses for all medical care deemed necessary, probably with modest co-pays (reduced or waived for lower income Singaporeans). That'd be another option. It'd be simpler, at least. But the government hears a constant barrage of "personal responsibility" advocates -- as if a virus knows how careful you've been in your investment portfolio! -- and so we've got personal Medisave Accounts, and an extremely basic and compulsory MediShield Life. And clearly the government still can't make everyone happy. ;)
 
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antonpoh

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My father's MA is about 9k mainly from government.

He never use medisave before except for the first time last year when he was 88yo!!!.

And now he has to pay MSL of 615 (if no further increase) from his MA annually!!! But that's a blessing to me as I have not bought him any medical insurance, even though I have never incurred any medical bill on his health.

For those at 88yo he may pay Medishit Life $615/yr but can only claim $530 from MSL. The rest use MA to pay. :s22:

BD01DDEE-A5F0-4AA1-93D3-B46DC1D39FD1_zpskkqmd6hq.jpg
 

elnewbie

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If one doesn't make a nomination, then the funds will go to the Public Trustee who will administer in accordance to intestacy law. AND...there's an admin fee of approx 1.5% of the funds that will be charged. So if you have a modest balance of $200k in your CPF, that's $3k just because you didn't fill in a nomination form.

No, that's not correct. Compulsory MediShield Life premiums drain some of your MA every year. If you have dependents, their premiums typically do, too. Those premiums, if nothing else, unstick those funds.


And medical insurance.

Nobody has zero medical expenses. MediShield Life premiums, if nothing else, make sure of that. Assuming adequate emergency funds on hand, and assuming the MA isn't too big (it can't be -- it's capped at the BHS), and assuming you're happy with the yield (>4%, plus the tax savings), at least for that (extremely safe) portion of your total portfolio, the lack of flexibility shouldn't matter too much precisely because you're invariably going to have medical expenses. "Gee, you have to save something for future food consumption. That's not flexible!" Uh, OK, I suppose it isn't, but I plan to eat next year, next decade, and beyond.

Also, if you terminate your citizenship or permanent residence, Medisave funds are immediately, optionally available for withdrawal for any purpose. It's a choice.

When you die, if there's money left over in your MA, it goes to your nominated heir(s). And you should nominate somebody, or some organization, to receive every penny of your remaining CPF. You might end up in a black hole, but your CPF monies don't.
 

BBCWatcher

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For those at 88yo he may pay Medishit Life $615/yr but can only claim $530 from MSL. The rest use MA to pay. :s22:
Which is the correct MediShield Life math for the 5 day hospital stay of that nature in that specific example. It's not the correct math for a 6 day stay.

So is your proposed alternative that the government increase general tax rates, or expand the personal income tax to cover passive income, or some of both, in order to fund a single payer, universal (citizens and PRs) program that pays all medical expenses for all medically necessary care, with modest co-pays that are partially or fully waived for Singaporeans of modest means? Then we wouldn't need Medisave Accounts and MediShield Life. There'd be a different, more globally typical medical financing system.

What do you think?
 

havetheveryfun

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Which is the correct MediShield Life math for the 5 day hospital stay of that nature in that specific example. It's not the correct math for a 6 day stay.

So is your proposed alternative that the government increase general tax rates, or expand the personal income tax to cover passive income, or some of both, in order to fund a single payer, universal (citizens and PRs) program that pays all medical expenses for all medically necessary care, with modest co-pays that are partially or fully waived for Singaporeans of modest means? Then we wouldn't need Medisave Accounts and MediShield Life. There'd be a different, more globally typical medical financing system.

What do you think?

I think u are not getting his point. if u pay $600 for insurance but can only claim up to $400, then might as well not pay for insurance and just pay for the $400 out of ur own pocket ?
 

frenchbriefs

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wow fookers!!!!boycott cpf and medishield!!!

i have a question,if u have substantial insurance premiums and have been paying $200 to $400 premiums all ur life,why do u still need to pay to medishield?why do u need so many components,government subsidy with taxpayers money,private insurance coverage and medishield just to provide complete healthcare coverage in this country?is the garmen trying to sucker our money?im not surprise considering how many ways the garmen is already suckering our money.HDB for one.
 

luvalist

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not everyone has insurance mah...

on a side note, I realise the interest will be credited on 31 Dec but BHS increase is from 1 Jan onwards. Will that mean interest still flow back to SA (as it hit 2016 cap)? But doesn't matter, we will know in 1- 2 days' time
 

BBCWatcher

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What are your thoughts about the Medishield Life program collecting more premiums than the total pay-out in 2016?
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.

Do you feel it will be fairer to return to participating members the collective excess in amounts proportionate to the payments made since monies that move out of the Medisave accounts do not generate interest?
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.
 
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