CareShield Life and Long-Term Care Bill

Thank you, Mr Deputy Speaker, and I thank the various Members in this House for having spoken up in support of the Bill – Members from all sides of this House. I will round up this debate on behalf of Minister Gan.

As Minister Gan has outlined, Singaporeans are living longer and healthier. However, many of us will face the risk of severe disability and require long-term care at some point in our lives. Therefore, it is important that we protect ourselves and our families. I would like to assure Members that even as we enhance our long-term care financing system, implement the CareShield Life Scheme, we are and have been enhancing existing infrastructure and the eco-system for care. We have been rolling out services to support Singaporeans in old age and we have more than doubled in this respect the home care and day-care places since 2011. We continuously look at key aspects of ageing and also the related issues around successful and active ageing, including, as Mr Perera has exhorted, the use of technology.

I thank the Members for the various suggestions, questions and queries in the course of this debate. I will like to use the opportunity to round up the debate and address those queries by focusing on the core principles behind the design of this financing scheme. I will anchor the response around the key principles of inclusiveness, affordability and sustainability.

Let me start with inclusiveness. An inclusive long-term care financing system is one that supports all Singaporeans and enables them to afford essential basic long-term care. The design architecture of the Scheme must be to achieve that goal – to support Singaporeans and be able to do so while keeping premiums affordable.

First, in terms of coverage, the Bill reinforces and strengthens inclusiveness by making CareShield Life universal for future cohorts of Singaporeans born in or after 1980. Such a design is essential to protect vulnerable groups, such as the lower income and those with pre-existing disability.

For older existing cohorts of Singaporeans, which are those born in 1979 or earlier, we have kept CareShield Life optional for them as we acknowledge that the profile of this cohort, this group, is a lot more diverse. Many have previously decided to opt out from ElderShield, or may have made other long-term care financing arrangements of their own. In addition, the older cohorts would also have fewer economically active years left to spread out their premiums, and hence face higher entry premiums. Given that the Scheme remains optional for these cohorts, members of these cohorts will need to assess their own preparations, their own provisions for long-term care, when deciding whether or not to join CareShield Life.

To address Dr Chia Shi-Lu's point, we will provide ample Government support and incentives to encourage their participation in CareShield Life.

I would also like to assure Mr Png that those who are not severely disabled in existing cohorts can still join CareShield Life when it is launched in 2021. Mr Png also sought clarifications on clause 6(4). Let me explain that. This clause is used to cater for exceptional situations such as when someone had submitted an application for CareShield Life and it is being processed but, in the interim, fell into disability before the Scheme was effected or valid for this person. This clause allows the Minister to use flexibility to still provide CareShield Life cover on compassionate grounds. So, it is used in those limited exceptional circumstances and certainly not to be used arbitrarily.

As CareShield Life remains optional for existing cohorts, we will not be able to cover those in the existing cohorts who are already severely disabled, and I think Mr Png understands this point. Miss Cheryl Chan had raised this as well and I also hope that this addresses the point because if you cover everyone who is already severely disabled, that has an immediate impact on the premium that has to be borne by the remaining persons who subscribed onto the Scheme at that stage.

These individuals with pre-existing severe disabilities will be able to make claims immediately under the Scheme and so it is going to impact on the way in which you price the premiums for the rest of the members and also have an impact on whether their peers decide to join the Scheme or not. This is not a sustainable insurance scheme design. However, we will assist these Singaporeans with pre-existing disability in other ways and I will elaborate on them.

Prof Fatimah Lateef and Mr Christopher de Souza asked how ElderShield and ElderShield Supplement coverage will be affected. As Minister Gan has explained, ElderShield policyholders who decide not to join CareShield Life will remain covered by their existing ElderShield policy. I would also like to clarify that ElderShield Supplements will continue to be administered by the private insurers. ElderShield Supplement policyholders will remain covered by their existing Supplement policy, regardless of whether they upgrade to CareShield Life or not.

Dr Lee Bee Wah asked about encouraging existing cohorts who would not be auto-enrolled onto CareShield Life to join CareShield Life. I will reiterate what Minister Gan has shared, individuals born between 1970 and 1979 who are ElderShield policyholders and are not severely disabled will be offered the convenience of auto-enrolment. For those born in 1969 or earlier they will not be auto-enrolled, as their individual circumstances are far more varied, as I have explained.

In particular, there is a significant number of ElderShield 300 and uninsured individuals in the older existing cohorts, who will have to pay a catch-up component to join and get onto CareShield Life. They may thus prefer to have the option to choose to join CareShield Life at their instance instead of being auto-enrolled and that is the thinking behind the scheme mechanism.

Nevertheless, I agree with Er Dr Lee’s point that it is important to outreach to these groups too to help them understand, to raise awareness and certainly we are of the view that if we design a scheme that is good and well, it is of no use if people do not understand it and do not know it. So, I accept Er Dr Lee's point and I also in return urge all Members of this House to use opportunities that you have on the ground in your events to explain the policy, to explain the scheme design and to reach out and explain and deal with queries that your residents may have.

Ms Irene Quay and Ms Anthea Ong have asked about the schemes available to help younger severely disabled Singaporeans, in fact below the age of 30, including newborns and whether it is possible to extend CareShield Life to these people. CareShield Life is primarily designed to provide financial support for Singaporeans who become severely disabled during old age, which is when Singaporeans are most likely to need long-term care and support.

Notwithstanding that, we have other schemes available which are outside the scope of the current Bill but let me just outline some of them to help the younger severely disabled Singaporeans.

First, MediShield Life will help to support their bills for inpatient and selected outpatient treatments. They can also benefit from other assistance schemes such as the Assistive Technology Fund and the new Home Caregiving Grant, which I think Ms Ong mentioned, which does not have an age criterion. In addition, hospitals such as KKH and NUH offer programmes such as subsidised therapy services to help parents with children who need that specialised care. Finally, Government-funded safety nets such as MediFund and ComCare will also continue to provide additional assistance to needy Singaporeans.

On that score, I would like to assure Prof Fatimah that overseas Singaporeans can avail themselves of CareShield Life. They will be able to file CareShield Life claims from abroad wherever they may be, and to receive payouts to support their care costs in those chosen countries.

The second aspect of inclusiveness lies in making the claims process accessible and as seamless as possible, which several Members have raised queries and concerns about. Let me give Members a broad sense of the measures that we will be taking or have taken.

Beyond what Minister Gan has mentioned about increasing the number of accredited disability assessors to about 300, progressively expanding the types of disability assessments that can be accepted for claims and also proactively reaching out to disabled individuals to inform them of their eligibility for claims, we will also be waiving the first assessment fee for CareShield Life claims to further reduce any hesitation or reluctance that an individual policyholder might have in making the claim.

I would like to also assure Miss Chan that only one assessment is required, and furthermore, the same assessment can then be made for other schemes as well; other different multiple schemes.

In addition, policyholders need not pay for assessment fees for periodic disability reviews. Such periodic reviews are, however, important to ensure that we continue to make payouts only to policyholders who are and remain severely disabled, but to address Dr Neo's concern, we will be adopting a more targeted approach for periodic disability reviews. For example, policyholders who have been assessed to be clearly permanently disabled may then be exempted from further reviews.

I would like to assure Ms Ong that we understand and we accept her suggestion that we should indeed be assessing what an individual does, instead of what an individual can do. So, the focus is on the ability or inability to do something.

In particular, we have been working with experts to improve the disability assessment framework, to explicitly recognise the impact of cognitive impairment on physical ability. This is in line with requests from a number of Members for CareShield Life to also assist those who may have that mental condition or the cognitive impairment.

To elaborate on this, a policyholder may well be physically able to perform the various Activities of Daily Living (ADLs), but requires significant prompting or reminding as he is unable to remember what those steps might entail or how that is to be done. Under the current framework, assessors who may not be sure how to assess this policyholder might well classify him as not being disabled, being able to perform the ADLs since he can physically complete them.

Under the new framework and revised training curriculum, assessors will be guided with more information, more teaching and learning, and will be more explicitly guided on the aspects that should be taken into consideration if a policyholder is suspected to be cognitively impaired, including whether the policyholder's problem-solving ability and memory impacts his or her ability to actually carry out the physical acts of the ADL. This will result in cognitively impaired policyholders being able to more consistently qualify for CareShield Life claims.

Members have expressed concerns about vulnerable Singaporeans who may not be able to navigate the long-term care financing and social support landscape on their own. Again, as I said earlier, we understand this and we want to ensure that Singaporeans know and understand the schemes well – know how to make the claims, know when it applies to them and know what kind of claims to make.

AIC, which administers all of MOH's disability schemes, and in particular the Silver Generation Office under AIC, will be our key partner in providing Singaporeans with guidance on the disability schemes they are eligible for, and also how to apply.

To embed more touch-points in the community, we will create four more AICare Link touch-points co-located at Silver Generation satellite offices, and this will be done by end-2019.

At the same time, we will improve our coordination with the Social Service Offices and other Government touch-points within the community, so that our support for vulnerable Singaporeans is more cohesive and also resides more closely to where the residents and the policyholders might be. We will also continually review our various initiatives to consolidate and, as far as possible, simplify them. We encourage Members to continue to refer needy individuals – and I think we heard some stories earlier – refer them to us, give us some specifics and we will reach out and see how we can assist.

Third, we recognise that not everyone can afford or will be covered by ElderShield or CareShield Life. Members have asked for more to be done to help such seniors who need financial support for their long-term care needs.

The CareShield Life and Long-Term Care Bill facilitates this by providing for cash withdrawals from MediSave for long-term care. That is a more recent advent and one which we believe strikes the right balance.

The Bill also sets up the Long-Term Care Support Fund, which the Minister for Finance has committed to set aside $5.1 billion to service this Fund. ElderFund, the discretionary scheme for the lower income who are severely disabled, will be supported by this Long-Term Care Support Fund. Dr Lily Neo asked for more details on the eligibility criteria.

As Minister Gan has explained, this Scheme is targeted especially at Singaporeans who are unable to join CareShield Life, have low MediSave balances and also face financial difficulties in meeting their long-term care needs.

We recognise that individuals' circumstances from person to person may vary widely, and hence ElderFund is a discretionary scheme designed to take into account different circumstances as being applied to different persons. Singaporeans who are unable to meet their long-term care needs even after relying on other sources of financing can be considered for ElderFund.

In response Dr Chia's query on how we review ElderFund, we will review the adequacy of ElderFund payouts over time as we have more experience and we will also look at it in conjunction with several other factors that we determine the adequacy of the payout.

These new schemes and initiatives provided by this Bill should, however, not be seen in isolation, but instead, should be seen as complementary to the existing Government subsidies and assistance schemes. I have outlined a few such as ComCare and MediFund earlier.

Our system is designed to support all Singaporeans, regardless of their income levels. So, it is that to which I now turn on the question of affordability, the second key principle behind the design architecture of the Scheme.

Affordability involves keeping CareShield Life premiums affordably priced, whilst at the same time also providing premium assistance to those Singaporeans who need it.

There are several points. First, to ensure that CareShield Life premiums remain affordable, the ElderShield Review Committee had recommended that the CareShield Life Scheme focus on providing basic coverage for Singaporeans’ long-term care needs.

One of their recommendations was to keep the existing ElderShield claim criteria, which is the inability to perform at least three out of six activities of daily living (ADLs), a point that we have heard many Members touch on earlier.

Ms Ong, in particular, asked if CareShield Life payouts could be tiered based on the extent of disability. We have previously considered this. I think Ms Ong would also know that lowering the claims criteria to two ADLs would immediately increase the CareShield Life premiums of a 30-year-old policyholder by about one-third. That is anything in the order of 25% to 33% of increment, just by dropping down to two ADLs.

The premium increase for CareShield Life would likely be significantly and also exponentially higher if the claims criteria is then further lowered to one ADL, given the higher incidence and length of disability. Not only will there be more persons with one or two ADLs, as opposed to three, but the period of support, which is for life, will also be for longer. Both will have an impact on the amount of premium that will have to be collected.

The Committee had also recommended that CareShield Life payouts start at $600 per month, and increase over time. Dr Neo asked, and I think many others as well, such as Mr Chen Show Mao, if the payouts could be higher.

CareShield Life payouts already start at an amount which is, at present, significantly higher than the current ElderShield scheme. Increasing the starting payouts from $600 to, say, $800 a month would also increase premiums for a 30-year-old policyholder by around a third. So, recall I said at the start that we have to find a design architecture for the Scheme that is affordable and that meets the interest of basic long-term care of Singaporeans.

In addition, as Members would know, CareShield Life payouts are set to increase at 2% per year for the first five years of scheme implementation. Assuming a continued increase of 2% per year after that – so that is 2% thereafter after the five years – a 30-year-old joining the Scheme in 2020 may receive around $1,200 per month should he become severely disabled at age 67 or later. So, that is the projection that we take into account and also to keep up with the value of money over time.

So, for those reasons, we have kept the focus on basic long-term care needs, and looked at other ways to provide additional support. And I urge Members to remember that the payout from CareShield Life is intended and it is designed to be complementary. It complements the other pillars of financing support, not replace and not take over, and also not put in place and reduce others; it is to complement as an add-on. Lower and middle income Singaporeans, including those with moderate disabilities, will be supported with subsidies of up to 80% for residential and non-residential care services, and can also receive other disability grants.

For example, the existing Pioneer Disability Assistance Scheme and the new Home Caregiving Grant, which will be launched at the end of this year, will provide support for persons with moderate disability. So the threshold will be different from what is otherwise required in the CareShield Life Scheme.

In response to Dr Neo's query on the disability criterion and assessment process for the Home Caregiving Grant, I should explain that the Home Caregiving Grant is targeted at precisely that, the moderately disabled Singaporeans who require some assistance with at least three ADLs. This is less stringent than the severe disability claims criteria for CareShield Life and the current ElderShield, where a higher level of dependence is required for each ADL.

Dr Chia and others in this House asked about the type of Supplements that will be offered by private insurers and whether MediSave can be used to purchase the Supplements.

Singaporeans can purchase Supplements from the private insurers which currently provide coverage starting from two ADLs, and also a higher payout. So you can choose either one or both of these Supplements.

As with ElderShield Supplements, Singaporeans can use up to $600 of their MediSave annually, per insured person, to pay for CareShield Life Supplement premiums.

Dr Neo asked if the Government could administer these Supplements. As I explained earlier, our approach for the Government in this Scheme is to provide basic coverage, whilst at the same time allowing the private sector to innovate in the provision of supplementary coverage. We believe that there are benefits to be reaped, for instance, in the diversity and type of products that are being offered, by allowing private insurers to compete in this space beyond the basic tier.

Second, in response to Prof Fatimah's query, we keep premiums affordable by starting earlier. So, that is one principle behind why 30 and not 40, which is ElderShield. A 30-year-old would have been working for some years at that age, and starting premium payment at that stage lengthens the payment duration and also reduces the annual premium payable, making CareShield Life premiums more affordable and more within reach, including for a person who has started work for some time at around 30.

Third, we allow the use of MediSave for CareShield Life premiums, similar to the approach for MediShield Life and ElderShield today.

In response to Prof Walter Theseira's point, we allow the use of MediSave but judiciously, because we recognise that it may be difficult for individuals to save and plan ahead for long-term care.

We facilitate them starting these preparations early, by allowing individuals to tap on their existing savings in MediSave as another financing source, instead of requiring them to use only cash which, as the Member knows, will cause a strain in their cashflow. This also helps to buffer individuals against the vagaries of life, sometimes from unintended or temporary unemployment.

As a safeguard, we only allow MediSave to pay fully for basic healthcare and long-term care insurance. For additional coverage, we have set withdrawal limits to protect MediSave adequacy. This is in line with the discipline that Professor Theseira spoke about in the way in which we use MediSave to fund these schemes.

Mr Png also asked whether permitting MediSave uses for CareShield Life premiums would affect adequacy. The current MediSave contribution rates allow most working households in future cohorts and auto-enrolled existing cohorts to pay for CareShield Life, MediShield Life premiums and other healthcare needs from their monthly MediSave contributions.

Fourth, I would like to assure Members that the Government is committed to keeping the premiums affordable through the provision of subsidies. This includes permanent premium subsidies for lower and middle income policyholders. Ms Jessica Tan, Miss Cheryl Chan and Dr Chia Shi-Lu asked some questions about this. In addition, we will also provide incentives to encourage existing cohorts to join the scheme, and these incentives are netted off against their premiums. Younger cohorts will also receive transitional subsidies.

While at Mr Leon Perera's point, I would like to clarify clause 15 of the Bill that allows the offsetting of premium subsidies from premium refunds, for administrative ease. So, let me just illustrate it with a scenario. For example, if an auto-enrolled policyholder decides to opt out before the deadline of end 2023, which Minister Gan outlined, the premiums he had paid will be fully refunded and the mechanism that is being used is designed in clause 15. Any premium subsidies and incentives he received previously will then, of course, also be offset from this refund. So, you do not retain the subsidies whilst at the same time choosing to exit from the Scheme.

Separately, if the Council considers at its regular adjustments to consider premium rebates, for instance, in that situation, if there is a premium rebate to be paid to a policyholder, the rebate computation will not take into account the subsidy that has been given. So, if part of what you have been paying as a premium is assisted through the subsidy, then, the rebates that are given will not take that into account in giving the rebate to the policyholder. Instead, the rebate will be retained in the fund, for the benefit of all the other policyholders; and that, we believe is the fairest arrangement.

Mr Png also asked if the savings from Government administration have already been reflected in the CareShield Life premiums. Let me confirm that the CareShield Life premiums from existing cohorts are based on the expected expenses under Government administration and would thus have also reflected the savings that we expect to see from such administration.

In any case, any further savings will be fully returned to policyholders such as in the form of higher payouts or the premium adjustments that I just spoke about. In short, the Fund is not for profit and should there be any surpluses, it will be put back into the Fund for the benefit of all policyholders.

Next, I would like to assure Members that no one will lose coverage due to his or her inability to pay, but it has to be a genuine inability to pay, not just a refusal.

The Government will provide Additional Premium Support to Singaporeans who cannot afford CareShield Life premiums even after premium subsidies, MediSave and family support.

Dr Chia had a question about Additional Premium Support criteria for both CareShield Life and MediShield Life and whether we intend for it to be the same. An individual's additional premium support status will be shared across both CareShield Life and MediShield Life so that an individual would not be put through the task of having to apply for Additional Premium Support twice over.

Let me turn now to the third key principle which is that of sustainability. I think Members would agree that we must ensure that the long-term care financing system that we put in place must remain sustainable and must work in the long term. This is so that our children and the generations beyond that will not be unnecessarily and unduly burdened by the needs of the current generation. Let me elaborate with reference to a few points.

First, CareShield Life and ElderShield are designed to be self-sustaining schemes. So, that again is in the policy design. It is in fact hard wired when into the design of the schemes. So, as a result, these schemes are heavily pre-funded, with CareShield Life premiums payable until age 67 or spread over 10 years for older existing cohorts, and ElderShield premiums payable until age 65. This means that each cohort saves up for their own long-term care needs, and taps on these savings in their senior years, thereby minimising inter-generational transfers across cohorts. CareShield Life and ElderShield premiums are set based on this pre-funding principle, and in line with internationally-accepted industry standards and principles.

Several Members – Ms Anthea Ong, Ms Irene Quay and Ms Tin Pei Ling – have asked about gender-differentiated premiums. In particular, Ms Quay expressed concern that gender-differentiated premiums could start the trend of potentially differentiating premiums in future by reference to other factors, such as race and so on. We have explained this previously the actuarial basis for this feature, but we do recognise there are other factors at play. Let me just quickly recap it and address the points raised by Members.

Actuarially, it is recognised that women live longer, are more likely to experience severe disability, and live longer in severe disability. Let me just outline this with reference to some statistics and numbers using Singaporean-based profile and information.

In 2017, the average life expectancy at birth for women is 85.2 years as compared to 80.7 years for men. As individuals are more likely to become severely disabled in old age, women have a higher probability of becoming severely disabled in their lifetime. Three in five healthy women at age 65 are expected to become severely disabled, compared to two in five healthy men at age 65.

In addition, when disability happens, women are also likely to remain in disability for a longer period of time than men. Women aged 60 are expected to spend 7.8 years requiring assistance with any of the ADLs, compared to 2.6 years for men. And those are based on a study done in Singapore of Singaporean numbers. This means that women stand to receive more benefits from CareShield Life if you look at it across the spectrum, and hence, their actuarially priced premiums are higher.

We could average out the premiums across genders. I think some Members have alluded to that. But this only works if it was a fully universal scheme where there is no option.

As CareShield Life is optional for existing cohorts, gender-neutral premiums could well encourage male policyholders to stay on ElderShield and buy gender-differentiated Supplements from the private insurers, which may now then appear cheaper. As Members know, the ElderShield premiums are gender-differentiated. Conversely, female policyholders would now find CareShield Life a much better deal than the existing gender-differentiated ElderShield. This increases the risk of gender skewing in the risk pool as more women than men would join the CareShield Life Scheme. The gender-neutral premiums would become increasingly unsustainable and premiums would have to increase, possibly approaching the level women would have had to pay anyway under a gender-differentiated scheme, but without covering a significant proportion of men.

In response specifically to Ms Irene Quay's query, I should explain that actuarial differences in claims experience by gender is well-established both locally as well as globally. However, there is limited data to support such differences based on other factors such as race or genetic factors, which is why we look at this as an actuarial factor. So does ElderShield and ElderShield is supported by a series of other private insurers. In addition, I would also like to note that ElderShield Supplement premiums are not differentiated by race or genetic factors, the same factors that Ms Quay has outlined. And my Ministry will not allow insurers to do so. Hence, the concerns I have just explained with regard to gender would not apply, and there is no impetus for us to differentiate CareShield Life premiums using these factors.

Nonetheless, Members have raised fair concerns about affordability for women, and I think those are fair points, and the need for greater inclusiveness for a national scheme. But let me explain it this way. If you have seen the numbers that I have outlined, I would suggest that greater inclusivity also means ensuring that the actuarial integrity of the scheme in itself should be the proper basis for designing the scheme's terms and that in the long term ensures a fair long-term sustainable outcome.

We will, however, address affordability separately, including the points raised by Members, through the provision of means-tested premium subsidies and Additional Premium Support. The means-tested premium subsidies are intentionally designed to be based on a percentage of premiums so that lower and middle-income women will receive larger dollar quantum. So, in absolute dollar terms, the Government subsidises women more compared to the men in their age cohort and of the same income levels.

I would also suggest to Members in this House that a gender-neutral premium, or gender-neutral scheme design, might at first blush appear inclusive. But if you take into account the factors that I have outlined, looking at that in terms of the payouts and the expected payouts and for the period of those payouts, then in the longer term it would likely lead to women from existing cohorts opting into CareShield Life, and men choosing to stay away. We would then have a gender-skewed coverage, and this would have the unintended effect of further worsening national solidarity over the Scheme, in the longer term.

Dr Chia Shi-Lu, Mr Png Eng Huat and Mr Leon Perera amongst others asked what information about the administration of CareShield Life, the management of the insurance fund, and the premium pricing methodology – what information will be available. Let me assure Members that the Scheme will be transparent. Minister Gan has explained earlier, the accounts of the CareShield Life and ElderShield Insurance Fund will be made public. We will also publish relevant information on the premiums collected and payouts made for the CareShield Life and ElderShield Insurance Fund on an annual basis. The public can be assured that the information shared will be similar to that for MediShield Life, and the CareShield Life Council will also consider what other information might be useful having regard to industry norms.

As we explained in Parliament in July last year when we debated the White Paper, premium pricing is an extremely complex exercise, and, in coming up with a scheme design, MOH has engaged professional actuarial consultants to construct an actuarial model to do so. For example, underlying assumptions include mortality and morbidity assumptions, and how these change over time and over age for the population. Given these complexities, instead of just publishing a large number of actuarial tables, it is a lot more meaningful to release relevant information in a manner that can be easily understood and reviewed by a layperson.

I think Mr Png had a query on the US numbers; he had the 52% numbers. The query, I think, centred on the statistic that in the US, 52% of elderly would require long-term care assistance and asked whether this was taken into account. This along with information coming out from the UK and Japan was not taken into account in computing the premium in this case. On the assumptions backing one in two that was shared previously – and I think that was the point Mr Png also raised – MOH had engaged the professional advice of actuaries to compute this estimate, using the assumptions, parameters and the model that I spoke about earlier.

The projections are based on ElderShield claims experience but also draw information from a wider range of cross-sectional and longitudinal sources, given the limited experiences at older ages. As shared previously, the actuarial pricing data we look at includes insurance schemes in the US, Taiwan and South Korea. It does not mean we used their data wholesale. It looks at the models they have there, looks at our claims experience with ElderShield, draw them together, use the models and get the expertise of the actuaries and provide the scheme design.

At the end of the day, I should emphasise that if the actual claims experience was better than expected – in other words to take Mr Png's point – if we were more conservative with designing the scheme, that if the premiums collected are more than what is needed, then any surpluses from any of these excess premiums will be fully returned to policyholders, for their benefit. The Council could recommend for the surpluses to be returned in a number of ways such as higher payouts over the years, reduced premium increases over the years, or premium rebates. We intend to give the Council the flexibility to study factors and to make recommendations so that they adequately respond to changing circumstances and the needs on the ground.

I should also outline that there is a publication by the Singapore Actuarial Society that is now available publicly. It provides a broad explanation of the key pricing assumptions and risks for long-term care insurance, the challenges for pricing long-term care insurance, the concept, the thinking behind the models and also, advantages of pre-funding for long-term care insurance. If Members are interested, this technical paper was recently released by the Singapore Actuarial Society.

Mr de Souza asked about inter-generational equity given that monies for both CareShield Life and ElderShield schemes will be placed in the same insurance fund. Let me assure the Members that moneys for the schemes are placed in a common insurance fund for capital and administrative efficiency. For example, Government capital injections into the insurance fund, which are meant to support tail-end risks, can benefit the capital needs of both schemes. However, monies maintained for CareShield Life and ElderShield will be tracked and accounted for separately. I would like to emphasise that monies collected for one scheme will not be used to fund the other scheme.

Secondly, we will establish the CareShield Life Council as a key safeguard over scheme sustainability in the long term. The CareShield Life Council will be independent and will review and make recommendations for both the CareShield Life and ElderShield schemes.

As Minister Gan had explained earlier, one key role of the Council will be to make recommendations to the Ministry on the adjustments to CareShield Life premiums and payouts to ensure sustainability. In response to Dr Chia’s question on how often the premiums and payouts will be reviewed, let me assure Dr Chia that the Council will monitor the disability trends and claims experience of the schemes closely and on a regular basis. Let them decide how regular they feel they need to and it is possible that the review regularity may be more in the earlier years, as we start the administration of the scheme. We will then determine the exact cycle for the adjustments thereafter, in consultation with the Council.

To enable the Council to perform its functions, the Council will comprise individuals with different, diverse backgrounds, ranging from healthcare practitioners, medical social workers, auditors, investment professionals, union members and also, an actuary who is a Fellow of the Singapore Actuarial Society, as Ms Quay has suggested. The Council will also be supported by independent, external actuarial consultants.

Third, again similar to MediShield Life, the Bill also includes provisions for premium payment enforcement to enable us to take action against wilful CareShield Life premium defaulters.

The principle behind this is clear. You have to be fair to all policyholders and individuals do need to play their part by keeping up with and paying the CareShield Life premiums. Enforcement provisions are therefore necessary to ensure that wilful defaulters pay their premiums, instead of having their premiums unduly borne by other policyholders.

Fourth – and Mr de Souza raised this point – we intend to take a strong hand against fraudulent assessments and misuse of payouts. The Bill provides that maximum fines and penalties for the offences of fraudulent assessment and misuse of payouts will be twice the maximum fine and penalty for the offence of false declaration. This is commensurate with the more severe nature of these offences and also having regard to the fact that a nominated payee is acting on behalf of someone who is disabled.

To Dr Chia’s query on how we can further guard against fraudulent claims, let me assure Members that regular audits will be conducted. No audit will be 100% foolproof, but audits will be done, patterns will be studied, to sieve out potential fraudulent claims. So, for instance, we might look at cases where a claimant who was assessed to be severely disabled and then subsequently assessed not to be not disabled at all, within a short period of time. These markers will allow my Ministry to look into further cases and investigate them.

To Miss Chan’s query on whether we will audit nursing homes or service providers who have access to their patients’ payouts, let me first clarify that these providers generally only have access to the payouts if the policyholder or the care-giver had nominated these providers to receive the payouts on their behalf.

Where the policyholder lacks mental capacity to do so or/and is destitute, the nursing home can act on his behalf to apply for payouts, but this will be on very exceptional circumstances. Let me assure Miss Chan that we will audit providers who receive these payouts to ensure that they are using the payouts in the interest of the policyholder and towards the policyholder's care.

We would like to make clear that the audit and enforcement framework is not intended to penalise bona fide assessors or care-givers. Sometimes, genuine bona fide mistakes are made, and sometimes, to answer Mr de Souza, what might be a reasonable position. One could consider a situation where a care-giver living with a policyholder who uses part of the benefits for household expenses of the policyholder’s family, when the policyholder's needs are already well taken care of. So, in other words, part of the same household, needs are already taken care of, and the funds which are fungible are applied for another reason when the basic needs of the policyholder are already taken care of. So, in those situations, we do not intend to penalise the care-giver.

To Mr de Souza's other query, it is indeed our intent to return payouts to policyholders in the event of misuse.

The fines and penalty structure meted out under clause 50(2) of the Bill is to be paid to the Consolidated Fund – the fines go into the Consolidated Fund. However, clause 50(3) provides for the Courts to order the errant payee to refund payouts he or she has received into the CareShield Life and ElderShield Insurance Fund. So, those wrongfully received payouts will be put back into the Fund for the administrators to consider giving to the proper payee.

These monies can then be paid to that person or a nominated payee at the directions of the policyholder or the policyholder’s care-giver.

Like Ms Joan Pereira and Dr Chia, we do take a serious view on data confidentiality and the safeguards in the Bill reflect this, as Minister Gan has elaborated upon earlier. Some Members were concerned about the security of the CareShield Life IT system. We will design and build the system to stringent security standards, for example, by restricting system access to only approved users, encrypting data sent across organisations, and also monitoring and tracking system activity.

Fifth, we must ensure that MediSave monies remains adequate to meet an individual’s healthcare needs in old age. We all want to do a lot; we all want more payouts; we all want less premium, and we want there to be lower ADLs. That I think is a summary of the debate that we had today. But remember what I said at the outset, it must be designed for a broad majority of Singaporeans and kept affordable, and I think that has to be the design intent. I would also like to borrow Prof Theseira's point, so eloquently put, that we do have to use these schemes judiciously, we have to have an internal discipline to what can or cannot be used out of MediSave.

Members have raised several queries on the withdrawals from MediSave for long-term care. And some have also asked for the criteria to be relaxed and so that we can extend the withdrawals to that of severely disabled children, parents or siblings. And yet others in this House have expressed concerns over the sufficiency of MediSave, given the increased flexibility.

It is important to remember that MediSave's primary purpose is to help Singaporeans save up during their working years for their healthcare needs in the old age. As a general broad proposition, I think that would find no quarrel. Expansions or increases in MediSave usage will obviously impact adequacy for other healthcare needs, and they have to be considered carefully, as Prof Theseira has outlined.

As a first step, MOH has extended MediSave cash withdrawals to the severely disabled in view that their care needs are typically higher – more intensive and higher. As we recognise that the amount withdrawn can be significant depending on the length of the disability, we have started by proceeding cautiously by limiting the use of MediSave withdrawals for long-term care to the member or the member’s spouse only. This ensures that the MediSave adequacy of the severely disabled member’s children and their ability to afford current and future healthcare expenses are not impacted. So, that is also a cross-generation issue that Mr de Souza alluded to earlier.

Singaporeans who are in financial need and have low MediSave balances may apply for other Government schemes, such as ElderFund, to obtain additional support for their long-term care costs.

Mr de Souza, I think, asked about $5,000 – why $5,000 as a floor for MediSave withdrawal. It has been set to ensure that Singaporeans have some savings to help pay for their other healthcare bills, whilst at the same time allowing immediate access to MediSave for long-term care needs. It is really about striking the right balance between the two competing interests.

Next, we have planned ahead, with the Minister for Finance, setting aside the monies for the Long-Term Care Support Fund in advance.

Let me just respond to Dr Neo's and Prof Fatimah's question on how long the monies in the Long-Term Care Support Fund is designed to last for. I would like to explain that the majority of the monies in this Support Fund will be directed to existing cohorts as they are older and they are expected to form the majority of CareShield Life policyholders at the start. The majority of ElderFund beneficiaries are also expected to be in these cohorts given the higher prevalence of disability in old age.

This Support Fund is sized to be more than adequate for these cohorts as they age into their silver years. So those are the parameters, and this is the cohort that we intend to look after with this Fund. Nonetheless, as we progress and as there are more information and more claims experience, we will review the adequacy of the Long-Term Care Support Fund on a regular basis.

Sir, I have covered the three key principles undergirding the design of our long-term care financing system and the various safeguards and supporting provisions in the Bill. All three principles are essential for us to deliver a financing support system that can benefit all Singaporeans, regardless of income levels or disability status, for generations and, we hope, generations to come.

Let me turn now to the last topic on communication and outreach efforts. Members have asked about our communication and engagement efforts on the new schemes, and our efforts to explain the importance of planning ahead for long-term care.

Since May 2018, we have in fact been busy engaging the public on these enhancements to our long-term care financing system.

The Ministry has held over 60 public briefings and engagement sessions to-date and will continue to do more and spread information on this and educate the public, explain queries and help them with looking at their own landscape and deciding whether or not CareShield Life is suitable for them. This is on top of the numerous briefings which I am sure all of us in this House would have diligently done at our grassroots events over the weekends and so on. And I ask as I did earlier, that this continue.

As the Minister has mentioned earlier, CareShield Life will be launched around mid-2020 for Singaporeans born in or after 1980. Given that these cohorts are younger, our engagement efforts for them will also have to be tailored to media platforms that are typically used by that generation of people. So, social media, for instance.

We aim to progressively launch CareShield Life for existing cohorts born in 1979 or earlier from mid-2021.

We will commence engagement efforts for these cohorts closer to the launch in 2021.

Other than mass outreach in this fashion, the Silver Generation Ambassadors will also conduct face-to-face engagement with older Singaporeans in the existing cohorts. I hope this assures Members that the Ministry's efforts to ensure that Singaporeans from the existing cohorts are aware of the scheme’s benefits and will be able to make a considered decision on whether to join CareShield Life.

Of course, in all of our engagement efforts, we will not just be explaining the features of CareShield Life.

As Ms Tin pointed out, we will need to address the "why", and that I think is equally important. We have to explain why this is useful, and why planning for long-term care is important.

We also need to set out holistically how the different pillars of long-term care financing support work together so that people, just as Members in this House have, will have a holistic view of the different schemes, the different support structures that exist in this space.

We should also explain how different types of basic insurance schemes such as MediShield Life, the Dependants’ Protection Scheme, and CPF LIFE – they all serve a different aim and purpose, and perhaps a different constituency of people, but they are all complementary in this landscape.

Finally, Mr Deputy Speaker, let me conclude. As Singaporeans live longer, our healthcare system has to evolve to better serve the needs of Singaporeans.

We have put in place measures to help Singaporeans remain healthy for as long as possible, and on that I thank Dr Lee for so warmly embracing HPB's efforts. They will continue to do so. We do believe that going upstream to ensure that we keep the healthy well for as long as possible, should be the next bar.

At the same time, we will continue to invest in infrastructure and the services, as I outlined in the start of my speech, to support those who fall into disability. At the same time, we have built up our long-term care financing eco-system, with the introduction of various new schemes, based on the key principles of inclusiveness, affordability and sustainability.

The CareShield Life and Long-Term Care Bill contributes to that effort, strengthens the landscape in that space and enables the key pillars of this financing framework to be put together. As we continue to build on those efforts, I would like to urge the Members of this House to give your support to the CareShield Life and Long-Term Care Bill. Mr Deputy Speaker, on that, I beg to move.