CareShield Life

Mr Speaker, many of us may take our health for granted. But I would submit that many of us may take our mobility and individual independence for granted even more so.

This morning, many of us would have gotten out of bed, had our breakfast, dressed ourselves, maybe even gone in to have shower, did some toileting, but we do not often give these actions a second thought. But we can lose all of these and become disabled and dependent, sometimes suddenly, catastrophically, such as after a stroke. My late grandmother was 70 years old and she was one of the most active individuals I have ever met. She was still working and she would always walk instead of taking the bus. One afternoon, after an afternoon nap, she found that she could no longer do any of these things. She could not walk by herself, she could not take a bus, she could not feed herself or even go to the toilet by herself. And this was all in a matter of a few seconds.

Or it could happen after a terrible accident, such as with a spinal cord injury. Sometimes, the disability may come slowly, insidiously, such as with chronic nerve or muscle diseases and sometimes through mental problems, such as dementia. But all of these could lead us to greater dependence on other people for our everyday activities.

So, Mr Speaker, I feel that the enhancement of ElderShield to CareShield Life is timely and significant, as it constitutes an important piece of our social safety net, which until now, I would submit, has been deficient, in terms of the adequacy of our national long-term disability insurance system.

In January this year, the Government Parliamentary Committee (GPC) for Health submitted its recommendations on enhancing ElderShield to the Ministry of Health (MOH), and we note that our recommendations are broadly in line with those made by the ElderShield Review Committee.

I would like to begin by quoting from our paper, by stating the principal considerations for our recommendations.

One, Prime Minister Lee Hsien Loong described ElderShield as the “one remaining piece” that is needed to consolidate the progressive enhancements to our social safety net. Hence, the GPC believes that in order for it to fulfil its function as a cornerstone of our social security apparatus, ElderShield coverage for our population should be universal.

Two, as for any social welfare programme, a careful balance has to be struck between increasing and expanding benefits so that the programme remains relevant and useful, and yet keeping the scheme both affordable and sustainable for the long term.

Three, if ElderShield is to be universal with mandatory enrolment, then the GPC believes that the Government will have to provide targeted financial assistance to ensure that all Singaporeans will be able to participate in this social security programme, which is designed to increase peace of mind in the event of severe disability.

I have three comments and clarifications.

One, the GPC concurs that payouts be adjusted to keep pace with general and medical inflation and, in order for this to be financially sustainable, CareShield Life premiums will also need to be adjusted.

Could the Minister elaborate on the mechanism through which payouts and premiums are determined and adjusted to ensure that the system remains fiscally relevant yet affordable for all Singaporeans? For instance, when will we know that $600 a month is no longer adequate, and how much should the minimum payout be revised to?

Two, in our report, we recognised the actuarial basis for the higher premiums that women pay but would like to repeat our call that this gender differentiation be removed, in line, for example, with other insurance programmes, such as medical and hospitalisation insurance, such as MediShield.

I note also that Singaporean women tend to have lower average MediSave balances than men, so I hope that consideration be given to provide additional premium support for women as well.

Three, I hope that the Government will remain focused on investing or continuing to invest in Intermediate and Long-Term Care (ILTC) infrastructure and manpower and focus on keeping such services affordable. CareShield Life is a means of financing ILTC for the severely and permanently disabled, but such services are also necessary for those who are less severely disabled, or thankfully only temporarily disabled.

If we do not keep ILTC costs in check, then payouts will be unable to keep up, and CareShield Life will become ineffective. I hope the Ministry will also share with this House how it intends to keep ILTC costs affordable for all, and also the support care within the community.

The prospect of becoming significantly disabled in our lifetime is very real and, by some estimates, may be as high as one in two, but this risk is often underestimated or discounted, and quite understandably, particularly by the young. I hope that, as with the rollout of MediShield Life and the PG Package, the Government will have a comprehensive communications plan to help Singaporeans understand the scheme better. I believe there have been cases in the past where ElderShield policyholders who are able to actually make claims when they became disabled, have not done so because they were simply not aware that they could do so, or even that they were on the scheme.

Finally, I hope that the Ministry will leave no stone unturned to encourage those who are currently not included but eligible for CareShield Life to join the scheme, by not only providing incentives but also making the process as smooth as possible. For those who are already disabled but cannot be covered by CareShield Life, I am sure the Government will continue to provide the necessary assistance and support to them. I support the Motion.

Mr Speaker, Sir, as many Singaporean families can attest to, financing of long-term care is costly. This is unlike hospitalisation for emergencies or acute conditions requiring a person to be in the hospital for a relatively short period of time. Once the acute stage has passed, a person usually requires some step-down care for a number of years. This can be unaffordable to families, necessitating a broad-based financial support scheme.

To this end, I agree that ElderShield, in its current form, is not adequate. ElderShield was designed to cover “severely disabled” persons, defined as persons unable to do at least three of the six activities of daily living (ADLs), that is, washing, dressing, feeding, toileting, walking and transferring. With this strict qualification criteria, the persons eligible to make ElderShield claims are those who face significant costs of treatment, care and medications. The current payouts of $300 to $400 per month are too small to give families the peace of mind they need.

Today’s debate is important, as CareShield Life is an opportunity to demonstrate our values. As we battle inequality and disturbing signs of an economic class divide, new policies for risk-pooling and mutual support will be increasingly necessary. In this regard, it is comforting to read in the ElderShield Review Committee’s Report that a respondent told the Committee that he did not mind paying more premiums as “we are all a society”.

Mr Speaker, we in the Workers’ Party, support in general the rationale for CareShield Life. Nevertheless, there are certain aspects of the proposed scheme that appear to us to be more controversial. For instance, for a compulsory scheme, have the premiums been set too high, based on assumptions that are debatable? To ensure greater confidence and buy-in to the scheme, how transparent will the process of setting premiums and payouts be? These and other issues will be covered by my other colleagues.

For my part, I shall focus on two aspects of particular concern: first, the eligibility criteria for claims, that is, how disabled must a person be before being able to make a claim? Secondly, the premiums being differentiated by gender, that is, why should women be asked to pay higher premiums?

First, how disabled must a person be to make a claim?

Since CareShield is going to be a compulsory disability scheme, all Singaporeans born in 1980 or later will be making mandatory contributions for 37 years, from age 30 to 67. To justify such a national draw of MediSave savings, CareShield Life must be meaningful. CareShield Life must kick in to provide financial support to our citizens in times of disability.

Under the current proposal, CareShield will adopt the same eligibility criteria used in ElderShield. This worries me.

The assessors will have to determine whether a potential claimant is disabled enough as to not be able to do at least three of the six ADLs. How strict is the assessment? Here I wish to share the experience of one of my residents, who has since passed away.

This resident, Mr K, was suffering from an advanced stage of kidney failure and already had his leg amputated earlier due to diabetes. The insurer later decided to discontinue Mr K’s ElderShield benefits as the insurer’s panel doctor had assessed that he could perform all of the six ADLs “although partially”.  When I appealed on his behalf for a re-assessment, the insurer wrote back to him to fill up another claim form. Meanwhile, he was admitted to a hospice. When I saw him there, he requested me to write to the insurer to say that he would not be filling up the form as he was in the hospice. Eventually, his daughter filled up the form, and I understand that the hospice doctors assisted to get his ElderShield benefits restored. But within a month, he was dead.

Mr Speaker, I do not know what rigorous standard is applied to determine if a potential ElderShield claimant is disabled enough. When I read about the ElderShield premiums in the billions that have been collected over the years, it struck me how Mr K and his family have apparently been abandoned in their time of need. Is the experience of Mr K an aberration? If this is going to be the experience that will be carried over to CareShield Life, it would be unacceptable.

Sir, I am concerned that the “three ADLs test”, which will exclude disabled persons facing high medical and care costs, would leave them in the lurch. By the time a person is unable to do three ADLs, one is in dire straits. One is either headed towards a nursing home or needs someone to provide care full-time. Before one reaches this stage, if CareShield can give some payouts, then it is likely that the disabled person can continue to be looked after at home with some part-time help. The payouts will fulfil a very important gap to enable the disabled person to age in place and not tie up another nursing home bed.

Is CareShield not a good time to review the three-ADL test? Why not use a test of inability to perform two ADLs instead?

I note from Annex B of the Committee’s Report that under the long-term care scheme in Germany, persons can claim if they are assessed to have at least some impairment to independence on physical and mental conditions, with payouts which are tiered.

Mr Speaker, earlier, the Minister, in moving the Motion, said that the Government will encourage those born before 1980 to opt in to CareShield Life. In this regard, if a two-ADL test or some more flexible disability test is adopted for CareShield Life payouts, then more of the older cohorts currently on ElderShield may also be incentivised to join CareShield.

I would like to emphasise the point that CareShield Life will be a compulsory scheme, and young Singaporeans will have to pay 37 years of premiums. With this looming fact in mind, CareShield must have meaningful coverage, and my view is that the “three ADLs test” needs to be reviewed and readjusted to serve this end.

Second, why is CareShield making women pay more?

It has been proposed that premiums for CareShield Life be differentiated by gender. Women will be asked to pay higher premiums, because, as the Committee says at Chapter 8, women have a longer life expectancy and have higher risk of severe disability. Yet, the Committee insists that CareShield Life’s features are “universality” and “risk-pooling”.

Could the Government clarify whether there is any other country with compulsory long-term care insurance that discriminates premiums by gender? In any case, Mr Speaker, it is up to the Government to decide whether this recommendation of the Committee should be adopted. After all, deciding whether to set premiums as gender-differentiated or on a unisex basis is taking a stand on our society’s values.

The Committee writes that having gender-differentiated premiums is needed to ensure that CareShield Life “remains sustainable regardless of the mix of men and women who join”. But for a compulsory scheme, where every birth cohort will be included, does this argument, of not knowing the mix of men and women who will join, hold water?

I refer to a 2010 article by Nicholas Barr, Professor at the London School of Economics, entitled “Long-Term Care: A Suitable Case for Social Insurance”. Prof Barr agrees that to finance long-term care needs, using compulsory social insurance rather than optional private insurance will better cushion citizens from risk and uncertainty. On the issue of women living longer, however, Prof Barr argues that social insurance schemes for long-term care should not take this into account. He offers several reasons for this: “First, if the insurance is mandatory, there is little or no distortionary effect from charging men and women a premium based on joint probabilities; second, there are obvious political difficulties from imposing on women a significantly higher contribution rate than men; and finally, the use of unisex tables can be defended as a simple value judgement”.

So, what are our judgements and values?

In addition, we must also recognise the fact that many women give up their careers and personal ambitions to do unpaid caregiving for their families, services which the families would otherwise have to pay for. A 2017 report by the Ministry of Social and Family Development (MSF) found that women are much more likely than men to remain outside the labour force for family-related responsibilities. The younger women between 30 and 39 years old cited childcare as the main reason for not working, while females aged 60 and above cited housework and caregiving responsibilities as the main reason for not working.

Married women often provide care for their husbands, delaying or even preventing the men’s progression to becoming disabled. When husbands need long-term care, wives are there. Daughters, and daughters-in-law, too, often step up to the plate. By so doing, many women have lower CPF balances than men.

What signal do we send to our mothers, wives, sisters and daughters by requiring them to pay higher premiums, while expecting them to do more caregiving for free? It seems that the opportunity costs to women are being repaid by higher premiums for CareShield!

If we talk about risk-pooling within each generation, with each generation paying for itself, is it too much to ask to risk-pool between the genders and use unisex tables for premiums?

Sir, let me conclude. I have stated my general support for the principle underlying universal and compulsory long-term care insurance that the CareShield Life scheme represents. I have, however, raised two issues which I believe are critical to the Scheme’s success, namely, whether the qualifying “three ADLs test” is too rigid and onerous, and asking for the premiums to be set on a unisex basis if the scheme is truly to be universal and inclusive.

The CareShield Life proposal has much potential to be a strong social safety net for our people. This is a great opportunity which should not be squandered.

Sir, I welcome the report of the Committee. I thank the Committee for the hard work that they have put in and for the many prudent recommendations given. The report of the committee was dated 25 May 2018, on the same day the Minister signified the Government's acceptance and, in two days, the acceptance was announced in the press. That has caused some of us to wonder about whether the Government had sufficient time to deliberate on the report. And I thought, as a preliminary point, the Minister may wish to clarify that.

I am also, therefore, glad that Minister has moved this debate to allow Members to seek clarifications for which I have also many.

Sir, I support CareShield in principle and whilst I welcome the Government’s measures to provide universal and basic long-term care and support for designated cohorts of Singaporeans, I am disconcerted that such universal coverage is not extended to all Singaporeans. It is, nonetheless, in many ways, an improvement over ElderShield.

The Minister has explained the rationale for the exclusion of certain Singaporeans, but I hope that we can continue to consider the ways in which we can provide assistance in a more equitable and comforting manner.

Sir, we noted that those who opted out of ElderShield and have severe disabilities will not be eligible for protection under CareShield. I would like to know the definition of severe disabilities and how do we treat persons who have disabilities but perhaps not sufficiently severe? And what is the treatment for persons who have medical conditions but no disability?

In respect of the Government schemes that the Minister has raised which will be used to support those who are not covered under either ElderShield or CareShield Life, I would like to know whether there would be a single set of eligibility criteria. Will there also be simplified applications and administration in those schemes to facilitate access to the assistance?

From the administrator's perspectives, each would have their accountability for the administration of a scheme, but from the users' perspectives, we are all only seeking one single route of assistance.

Also, ultimately, for clarity, could the Ministry clarify which groups of Singaporeans will have no protection under ElderShield, CareShield and no assistance under Government schemes? I think it is important for us to know who we are and what we can do for them. So, it is very good that we understand who qualifies; it is important for us to know who does not.

Also, with respect to the conversion of protection from ElderShield to CareShield, I have noted that premiums paid under ElderShield will be taken into account for the payment of premiums under CareShield, as the Minister has said. But I wonder if the Ministry can also give more clarifications and examples of how such consideration would be applied.

In relation to excess premiums collected under ElderShield, since Eldershield is an opt-out scheme that came into operation by the compulsion of the state, I would submit that although insurance policies are issued separately by insurers to the insured, actually there is really no direct contractual relationship between the insured and the insurance company. Why do I say so? Because this is a compulsory scheme – we either opt out, or we are in; we have no way to negotiate; we cannot even choose our insurers. Therefore, they are, I submit, the agents of the state. That being so, the premiums that they collect – the excess premiums they collect – does the state have a claim? How should we deal with those? I am prepared to concede that the profits that they make out of those premiums should be retained by them, but perhaps the Minister can clarify how the excess premiums will be treated when CareShield is launched.

I have raised what basically relates to actuarial consideration applicable under ElderShield, and I believe that this will also carry through to the considerations under CareShield Life as well. So, for example, when ElderShield payouts were increased, were ElderShield premiums also increased? And when we compare the premiums of $3.3 billion collected with the payout of $133 million in claims, whether the Government conducted an independent actuarial verification to justify the premiums that continued to be collected for ElderShield, and whether those considerations guided the Government in the calculation of the premiums for CareShield.

Can the Minister perhaps further clarify also actuarial considerations for the exclusion of persons with pre-existing conditions for conversion from ElderShield to CareShield, and for the exclusion of persons with pre-existing medical conditions who were born before 1980? I know we are all excluded, but could it be argued that there could be an element of discrimination? Perhaps the Minister may wish to consider from that perspective.

And in light of the Committee’s recommendation that premiums should be actuarially priced and adjusted regularly to take into account changes in payout quantum and claims experience, we accept that proper premium quantum may be difficult to assess in light of significant uncertainties. But I am wondering if, for transparency, the Government will consider the following, such as statutory mechanisms to adjust premiums in future, statutory principles to be applied in the adjustments of payouts, what happens when we need to freeze or lower payouts in the event of a squeeze on the scheme. And at the very least, as suggested by Dr Jeremy Lim in his article “Why Singapore needs the new CareShield Life” published by Today Online on 5 June 2018, could we have raw data and assumptions in actuarial computations being made available to the industry and academics so that the transparency of the computations can be clear to all?

And a few final questions to the Minister for clarification. I understand that CareShield is an important part of this big piece of puzzle that we are trying to build. But other than putting pieces together, can there be synergies to be built among the assistance schemes of ElderShield, CareShield, MediShield, MediFund, rather than just taking a defensive approach – a stopping-the-gap approach? Are there positive synergies that can be achieved out of that?

Second question: who ultimately has oversight of the overlays, or potential gaps, among the schemes and the toll that they may take on Singaporeans’ CPF monies?

The final question is probably the easiest, which is on the administration of the scheme. Can the Minister clarify how the Government has acquired the necessary expertise and resources to manage the insurance scheme?

Subject to my clarifications, Sir, I support the Motion.

Mr Speaker, I would like to acknowledge the contribution and work of the ElderShield Review Committee under the Chairmanship of Mr Chaly Mah in framing a new long-term care plan for Singaporeans.

The current ElderShield Scheme has seen around 40% eligible of Singaporeans opting out because of the perception of low payouts, amongst other reasons. Making CareShield compulsory and universal and separately collecting premiums earlier from the age of 30, represents a fundamental reshaping of Singapore's long-term care insurance scheme. At the outset, it is important that the Government not underestimate the extent of misinformation surrounding the scheme. The recent WhatsApp messages which the Government sought to debunk through the mainstream media about it allegedly profiting from CareShield Life can be put down to some perceived pain points and public education gaps.

Many of these find their roots in the lack of knowledge about the principles behind long-term care schemes, such as ElderShield, but also in the use of statistics and data that are based on projections for which little detail and clarification have been provided thus far. In particular, the question of ever-escalating premiums after transitional subsidies and CareShield Life's likely loss ratio, given the ElderShield experience, has created considerable unease in the public mind. While the use of MediSave to pay CareShield premiums was recommended by the Committee, this has also raised the prospect of a further depletion of CPF members' MediSave account towards another compulsory scheme after the recently announced MediShield Life, a scheme whose transitional subsidies are only going to be phased out in 2019.

In the case of CareShield Life, the effect of technological disruptions on permanent jobs, the gig economy and more contract jobs in the workplace creates insecurities which impact sustained participation in compulsory schemes, particularly when future premiums are going to increase.

One major concern I have, which the Minister briefly expanded upon, is the statistics that the ElderShield Review Committee and many mainstream media outlets zeroed-in on of one in two Singaporeans becoming severely disabled in their lifetime. From footnote 10 in the Committee’s report, this is an MOH estimate based on local data, supplemented by international data. This factoid, which appears prominently in the Executive Summary of the Committee’s Report, has raised eyebrows leading some to enquire whether it is unrealistically dire, legitimising higher and earlier premium payments. I would like the Minister to explain this projection, specifically, how the Ministry came to this conclusion, because many Singaporeans cannot visualise how it coheres with the reality they see around them today. More details on this statistic would be welcome.

This, in turn, has led some to focus narrowly on the by now familiar statistic that ElderShield collected about $2.6 billion in premiums while paying out only slightly in excess of $100 million from 2002 to 2016. In fairness to ElderShield, this point cannot be intuitively understood until one appreciates that ElderShield continues to provide lifetime coverage after one stops paying premiums and the scheme requires significant pre-funding to anticipate sufficient payouts for policyholders.

To this end, it would be important to reveal the actuarial principles and considerations behind both ElderShield and CareShield Life. In this regard, there are some questions I seek the Minister to shed light on.

When ElderShield was launched in 2002, MOH made a specific provision in its ElderShield contract with the private insurers to return up to 50% of any accumulated surplus to existing policyholders, if the actual claims experience should turn out to be different from what was projected in 2002. In the first five years of the scheme, ElderShield claims have been lower than those projected in 2002. From a Parliamentary Question filed by my colleague Assoc Prof Daniel Goh in 2017, the Ministry confirmed that two ElderShield rebates have been given to CPF members enrolled in the scheme – one in 2007 and another in 2012 – to the tune of $130 million in total.

On what basis, did the Ministry set the rebate quantum at 50% when ElderShield was first introduced, and is there a rebate quantum assigned for CareShield Life and, if so, what is it, or is this a matter for the Independent Council to pursue?

Secondly unlike ElderShield, a significant aspect of CareShield Life envisages increased cash payouts over time, supported by regular adjustments over time to keep inflation in check. How often will actuarial principles be reviewed, a point that becomes very significant, particularly for those who may have passed away but contributed significantly by way of premiums in the past?

Mr Speaker, to arrest unnecessary speculation and misinformation about CareShield Life, the Government must commit to publish and be absolutely transparent about the actuarial principles and factors that drive premium hikes, including the investment returns on CareShield Life going forward.

To this end, the Committee's report calls for the setting up of an Independent Council and calls on its recommendations to be made public. I would argue that it is in the Government’s interest to consider if it could go further before the CareShield Life Bill is introduced next year. In fact, I would call for the Government to consider implementing a Freedom of Information framework in the administration of CareShield Life and appoint an information officer to the Independent Council who would respond to public requests for information about any aspect of CareShield Life for a reasonable administrative fee.

There are good reasons for the Government to consider taking such an approach. First, such a commitment to openness would go hand-in-hand with CareShield Life’s universal and inclusive approach based on risk-pooling which makes every Singaporean in each cohort, his brother and sister’s keeper. As all Singaporeans contribute to the risk pool, it follows that the Government should make it easier for Singaporeans to take ownership of the schemes they are enrolled into and make enquiries on any aspect of the scheme’s administration.

Secondly, as the Committees’ report puts the onus on the Independent Council to regularly review and recommend premium and payout adjustments to the Government, this aspect of the Council’s work may come under scrutiny whenever premiums are raised. In all likelihood, more questions, not fewer ones, on future and previous long-term care projections will be raised, complete with misgivings, apprehensions and inaccuracies in the coffee shops and on social media. A proactive approach to public education would minimise this prospect and an open information regime would go a long way to addressing criticisms pertaining to transparency and accountability.

Thirdly, the administration of CareShield Life presents an opportunity to pilot a fresh approach towards public education of Government policies. Mr Speaker, we live in an era where inaccurate news can gain currency very quickly through social media and, as such, cloud people’s perceptions of policies. Even as some intentionally perpetuate misinformation about policy, there are yet many others who have genuine enquiries on various aspects of CareShield Life that they may be unsure about. A Freedom of Information regime with respect to CareShield Life can promote the Committee’s recommendation to better educate the public about the scheme. More importantly, the advantage of such an approach towards education is that the public discourse is less likely to be antagonistic but more data- and fact-driven.

To conclude, Mr Speaker, my Workers’ Party colleagues and, I note, the Chairman of the Healthcare GPC have spoken about reviewing whether CareShield Life can be made gender neutral. I strongly support this call in the name of inclusivity and in parallel with the scheme’s philosophy of each cohort looking after itself. It will mean men will pay more and women less. Let it be so. The Motion gives Parliament scope to rethink the concept of inclusivity for long-term care and define it to mean that men and women will not be treated differently.

In this vein, I would also call on the Government to consider extending tax relief to CPF members who top up the CPF MediSave accounts of their loved ones, regardless of gender, until the Basic Healthcare Sum is met, similar to the tax relief cap on top-ups to the Special Account currently. Such a move would enhance the ability of CPF members’ MediSave accounts to support future increases in CareShield Life and other compulsory premiums, generate greater interest for members and give them some peace of mind for their loved ones at the same time.

Mr Speaker, notwithstanding the comments, views and suggestions to improve the management of CareShield Life by my colleagues, the Workers’ Party supports the rationale behind CareShield Life and the setting up of ElderFund.

Mr Speaker, Sir, I rise in support of the Motion of the White Paper report on the ElderShield review as the basis for designing CareShield Life. Singaporeans will need peace of mind to be certain that their healthcare needs are taken care of, especially their long-term care needs as people live longer. Healthcare for the elderly has been a main worry not only to the elderly but also to the young, as they shoulder the burden of care for their loved ones in their old age when their parents require long-term care. With smaller family size and low fertility rate, the issue of eldercare has become increasingly pertinent. Who cares for my old age? Is it the state, the family or the individual? It is, indeed, a collective effort of everyone. If we truly call ourselves to be an inclusive nation, we must partake in our social responsibility, be it in the form of insurance or risk-pooling.

The recommendations put forward by the ElderShield Committee to strengthen our social safety net for Singaporeans address three key objectives which I fully concur: greater inclusivity, better protection and affordability. These three areas are critical and help ensure that the proposed scheme is sustainable to meet the long-term care needs of Singaporeans.

The scheme does not only benefit Singaporeans who require long-term care, but also their caregivers, to cushion their financial burden on taking care of them. For this scheme to be effective, the proposed payouts need to be reviewed periodically to reflect the cost of living in Singapore, especially the healthcare cost. How often will the Government review the adequacy of this payout? This certainly arises in the minds of many Singaporeans. Specifically, the amount should at least defray a significant portion of their expenses, transportation cost and caregiver costs, notwithstanding consumables and drugs. Is there any benchmark set to defray certain percentage of the cost of long-term care? While we look at the social safety net for their long-term care need, we also must ensure that our healthcare cost is sustainable. The fear is, will the spiralling healthcare cost lead to escalating premium and cash outlay by Singaporeans? All efforts to contain healthcare cost must run in tandem with such insurance schemes.

On Recommendation 9, I support the call for the Government to administer an enhanced scheme. The scheme should not be outsourced to third party insurance companies but instead be headed by the Government to prevent third party insurance companies from exploiting CareShield Life for the main reason of profiteering. We do not want a similar state of affairs like in the past where the Integrated Shield Plan (IP) with no claim limit was sold as a sweetener to entice many Singaporeans, including the mature and older ones, at a very high premium with increasing age. Cost of medical bills become exorbitant with the full insurance coverage under the IP. Healthcare cost needs to be curbed for greater sustainability.

To strengthen transparency, the Government should have additional safeguards and periodic reviews of how these monies are utilised, especially when these monies are invested in varying investment portfolios.

If CPF Board were to administer the scheme in addition to the other schemes, that is MediShield Life, CPF LIFE and so on, will there be additional safeguards and constant reviews of how these monies are used, especially when we recognise the fact that any investments have potential risk to it? In particular, how much loss is acceptable? What is the tolerance limit to risk and losses? Will the principle of perhaps an assurance of net gain over a time horizon, for example, five years, be adopted since it is understandable that there is bound to be risks, that is losses and gains, for any investments?

With CareShield Life being compulsory for all citizens from 30 years old, it will be a considerable sum of insurance monies to be managed by CPF Board. What are the safeguards in place and are there adequate controls, accountability and transparency?

It is also equally important to invest in public education and awareness since the enhanced scheme is new and relatively complex. It should be communicated in simple terms to the lay person. This is particularly relevant to the millennial since there was no option given for them to opt out of this scheme. So, accountability and effective communication of the policy will lead to better appreciation of the scheme and help ease unhappiness from the lack of choice.

On the technicalities of CareShield Life, I wish to seek some clarifications: according to page 63 of the White Paper on the ESRC Report, it states that the impact of cognitive impairments on functional ability should be explicitly considered in the disability assessment framework for claims. How will mental health issues and cognitive impairments be factored into disability assessments for CareShield Life? Mental health issues and cognitive impairments in older Singaporeans do affect their ability to perform ADLs and are significant issues that will be faced by the growing segment of our ageing population. The assessment should ideally be at no cost at all.

While the gender-differentiated CareShield Life premiums reflect the differences in risks between men and women, we should also acknowledge and consider the economic disparity stemming from the gender wage gap. Could the Government look into either reducing the difference in premiums, or provide greater financial support, so that women are not doubly-penalised in having to pay for higher premiums, especially for those with lower income? Moreover, the gender wage gap of 19% to 40% in some industries do persist for various reasons and this makes women more financially vulnerable if they do not have enough for their retirement and also their healthcare needs and payment of premium.

I support the committee's call for the Government to review the existing schemes and subsidies to assist Singaporeans who are already severely disabled in the existing cohorts since they will be excluded from CareShield Life. However, why have such differentiated approaches for existing cohorts of Singaporeans with pre-existing disabilities under CareShield Life, whereas universal coverage was introduced with MediShield Life covering those with pre-existing conditions? How will the Government be offering additional protection to cover people with pre-existing disabilities but are excluded from CareShield Life? What kind of additional coverage is being considered besides the long-term care fund, such as ElderFund, and withdrawal of cash from MediSave? Can the Government review and consider for a second wave of PG Package for those who missed out on the last wave?

Healthcare needs are major concerns of our older citizens. We need to look after their needs adequately. We also need to start educating Singaporeans to sign up for Lasting Power of Attorney to undertake decisions on behalf of them. All things must run in tandem to ensure an affordable, accessible and holistic healthcare for Singaporeans.

Mr Speaker, Sir, I stand to support the Motion raised by Minister for Health. Sir, ElderShield review is overdue and thus the newly enhanced scheme, now called CareShield Life, is indeed welcome. I feel that with CareShield Life in place, our Government has completed the provision of the basic safety net for long-term care for all Singaporeans, especially with regard to their healthcare. This is taken together with the implementation of MediShield Life, as well as with our existing MediSave and MediFund schemes. This will give many Singaporeans peace of mind on their healthcare and long-term care needs.

I first spoke on ElderShield in May 2002, several months before its implementation. In fact, this is the 12th time I am speaking in this House on this topic. Before its implementation in 2002, I already raised the concern over its inadequacy in its payout of $300 and in its tenure of payment of five years. This payout was upgraded with another $400-version subsequently. Those individuals with three out of six ADLs, which are washing, dressing, feeding, going to toilet, walking and transferring, such as moving from a bed to chair and vice versa, are totally dependent on others for their daily living. In fact, Minister Gan Kim Yong himself asked in this House, in this Chamber in 2002, on the reasons for citizens opting out of ElderShield at the time, whether it was because of the $300 payout or because of the difficulty in qualifying for the payout with three ADLs.

Today, I still want to raise the same concern that a $600 payout in the year 2020 will still be inadequate. Moreover, this amount will remain flat without adjustments to inflation after start of claim. In the context of Singapore, with increasing smaller families and dual-income families, caring for the severely disabled family members at home is usually with the help of domestic helpers. The payout of $600 will be inadequate for this domestic help, let alone paying for other hefty expenses, such as medical equipment, higher medical costs, physiotherapy and so on. The latter are usually required by the severely disabled individuals.

Whilst I understand that keeping the premium of the CareShield Life affordable is necessary, the adequacy and usefulness of CareShield Life are just as important. In this context, I feel that three out of six ADLs for payout are too onerous, two ADLs criteria would have been a better proposition. The reason is that those with just two ADLs alone, like inability to feed or to go to the toilet, will already need full-time assistance. Even the loss of just one ADL can already make significant impacts on one's life in mobility and in income. My concern is that with lesser CareShield Life, for those with two ADLs, their families may take the option of sending their dependent family members to community hospitals or letting them overstay in acute hospitals, resulting in higher burdens in the end for the families and for the Government.

May I ask the Minister whether CareShield Life can allow the purchase of "riders" with higher premiums for those who want to have better peace of mind and opting for one or two ADLs instead of three ADLs? This is a better option than going to private insurers that will never be like the not-for-profit Government policy proclaimed for CareShield Life.

Presently, ElderShield has a relatively low claims-to-premiums ratio outcome. The annual premium is around $206 million with opt-outs, while the payout amount is about $8.32 million. The number of claimants last year was in the region of 1,750. Considering the disability prevalence rate presently of about 5% for those 65 years and above, it means that there are already some 15,000 people requiring aged-care facility per year. Could the Minister give an explanation for the low number of claimants? Is the main reason being the three ADLs' eligibility as too onerous? Could it also be that the claiming process had been made difficult? Many people had lamented that they forgot to claim ElderShield. For those who tried to claim ElderShield, the process was daunting in filling up forms and looking for assessors. There are presently only 120 general practitioners (GPs) who are the certified assessors. I want to declare that I am not one of them.

I am glad that under CareShield Life, there will be an increased pool of assessors to include occupational therapists, physiotherapists and nurses. May I ask MOH to ensure that the assessment process be simplified with consistency and conformity, so as to enable assessors to give equitable assessments to all patients? Assessors had given feedback that, presently, the grading levels for each ADL can be quite small and slight, making it hard to assess the patients. Other feedback includes requests for assessment forms to be made more user-friendly.

Stroke patients are often struck with severe disability. Will it be onerous for such patients to claim for CareShield Life and how soon after being afflicted can such patients claim?

It had been reported that private insurers collected some $2.6 billion in premiums for ElderShield and only about $133 million had been paid out in claims. In 2020, the Government will take over the coverage, thus there is no risk for the private insurers for future claims. May I ask the Minister about the underwriting arrangements with private insurers and especially on the return amount of all the surplus premiums, including interest and investment income to MOH?

There is a difference in premium payments between men and women with CareShield Life. While I can understand that women live longer, I feel that there can be better inclusiveness and fairness. My concern is that women may have lesser means to pay for premiums compared to men. Women are earning less due to family commitments and may have even lesser savings to spare with increasing age. I welcome the provision for people who are disabled at the age of 30 years to join and to receive payouts immediately after paying for one premium. This reflects the inclusive society that we aspire to build. But I am saddened that this idea of inclusive society does not extend to gender equity by requiring women to pay higher premiums for CareShield Life. I hope the Minister will reconsider on this one.

Sir, those older Singaporeans, especially those above 67 years, will have to pay very high premiums for CareShield Life. Many will not be able to afford the premiums. What kind of assistance is available to assist those, not covered under CareShield Life, being struck with severe disability and have financial difficulty? May I also ask if the Interim Disability Assistance Programme for the Elderly (IDAPE) will still be available with the cessation of ElderShield in 2020?

Sir, for many severely disabled individuals, they prefer to be cared for in the familiar comfort of their own homes and with their families. I feel that MOH needs to develop homecare and community care, presently very scarce, as quickly as possible to cater for our fast escalating need to help severely disabled people remain in their own homes. The other options of long-term care, apart from homecare and community care, are care in nursing homes, community hospitals, as well as day-care and palliative care centres. While we address the financial issue of long-term care with the implementation of CareShield Life, it is vital to continue providing the infrastructure for long-term care for the severely disabled who need institutional care. Of course, daycare centres and nursing homes will have to be increased in number and in quality, and I hope that MOH will also provide humane palliative care with better support and services.

Sir, I would like to conclude that severe disability very often results from complications of chronic diseases. Thus, as a strong advocate of preventive medicine myself, may I beseech MOH to endeavor fullest to assist Singaporeans to keep healthy and to prevent chronic diseases and to have good control of their chronic diseases, should they have them. Thus, will MOH consider incentives, for example, premium discount, tied to our insurance schemes, CareShield Life and MediShield Life, to nudge or motivate people to achieve better health and to keep chronic diseases at bay?

Mr Speaker, Sir, first of all, let me thank the Committee for the good effort in coming up with this report. I personally welcome the CareShield Life Scheme as it will provide those afflicted by severe disabilities higher payouts for life, compared to ElderShield. This is a good scheme which will benefit Singaporeans as the financial aid will provide an additional layer of social security. CareShield Life is particularly relevant for a rapidly ageing society like ours. We will face, in the near future, every one out of four Singaporeans who is 65 and above, in view of the increasing number of these age-related disability cases to be expected.

I would like to ask the Government to consider automatic conversion of all existing ElderShield policyholders aged 40 and above to CareShield Life, while providing them the option of remaining in ElderShield 300 or 400. Under the proposed plan, only policyholders aged 41-50 in 2020 and who are not severely disabled will be auto-enrolled. I believe that this scheme will be accepted by most Singaporeans. Why? Because the lifelong coverage and higher payouts are major improvements upon ElderShield’s benefits. Therefore, the auto-conversion will provide convenience to ElderShield policyholders of all ages, compared to requiring them to sign up for CareShield Life. The proposed participation incentives can be converted into subsidies for the various age groups.

I also hope that the Government will allow ElderShield supplement policyholders, who have already paid additional premiums for higher or longer monthly payouts, to port these premiums to their new CareShield policies. Once on CareShield, interested Singaporeans may have the option to approach private insurers for additional coverage and payouts. Instead, may I suggest allowing CareShield policyholders the option of higher payouts if they can afford the additional premiums? As CareShield Life will be administered by the Government, compared to coverage from private insurers, it will provide greater assurance.

I request that CareShield Life be made an opt-out scheme so that all who have previously opted out of ElderShield will be covered this time under the new scheme. If they should want to opt out of CareShield Life, they need to provide valid reasons, such as having similar disability insurance coverage with private insurers.

Next, may I ask the Minister, on average, based on past data, how many Singaporeans have suffered severe disabilities before the age of 30? Can we also explore the idea of starting disability coverage from the age 21 and extending coverage grants to National Servicemen to show our appreciation for their services to our country?

In addition, I would like to suggest that we recruit Singaporeans, as we did for PG, as Ambassadors to visit individuals and households who have opted out of ElderShield or CareShield to explain and assure them of the support by the Government, including financial assistance, to encourage them to join the new scheme. The grassroots organisations (GROs) can work with the volunteers to identify and offer all necessary assistance to the households who need financial help and also encourage them to stay in the scheme. Mr Speaker, in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] CareShield Life is a good plan to provide more protection for Singaporeans with severe disabilities with lifetime cash payouts. This helps to pay for long-term care and reduces the financial burden on patients and their families.

The scheme is generally supported by residents, but some have expressed confusion about the names of various Government programmes, in particular, CareShield Life and MediShield. The Chinese names of these two schemes are too similar, with only one character difference and, especially for the elderly, it is not easy to spot the difference.

In order for me to explain this new scheme easily, I have tried different ways. Many people do not want to listen, because they feel this topic is "inauspicious". I tried to use a simple name to explain this scheme – "Ping An 123" (Peace 123). Why call it "Ping An 123"? "Three" symbolises coverage from age 30; "two" for the benefit of two parties, that is, the patient and their caregivers, hence, both the family members and the patient will benefit; "one" for lifetime payouts, every month you would receive payouts until recovery or death. That is why I call it "Ping An 123". It does not sound inauspicious. With this insurance, you will have peace of mind until death.

Anyway, I hope that Singaporeans can stay healthy, exercise more and prevent diseases. Because if you fall ill, it is you yourself who will suffer. Every resident says to me that they do not want to burden their family members. Precisely because we do not want to burden our family members that I encourage them to consider joining CareShield Life.

Mr Speaker, Sir, I fully support the Motion and I congratulate the Committee for doing a very thorough job in its review. There are but a few points which I would like to raise, one of which is: why is it that women have to pay a higher premium for CareShield Life? I know there is this "gender rating" which is somewhat similar to car insurance where teenagers are made to pay a higher premium as they are seen as higher risks because of their age and lack of experience. However, in the case of CareShield Life, I think the argument that women have childbirth and they tend to live longer lives should not apply. I feel, with the advancement in medicine, the risk during childbirth is very minimal. According to the Registry of Births and Deaths, maternal mortality or the death of a mother during childbirth, is relatively rare in Singapore. The figure was 4.8 per 1,000 births in 2016, down from 7.1 in 2015.

It has even dropped to 2.3 per 1,000 births before. One can argue that men go for more dangerous sports and they are a higher risk. I would want to believe that women are just as careful with their health, if not more careful than men.

Secondly, can the Minister clarify the amount of payout a person is entitled to increases annually until age 67 years, or until a person makes a claim? Why is there no increase after the claim is made? Surely, after the claim is made, inflation and the rising of medical costs still goes on.

Next, could the Minister explain what are the actuarial considerations for the exclusion of any person with pre-existing conditions for conversion from ElderShield to CareShield Life? Presumably, this is because the inclusion of people with pre-existing conditions will increase the number of claims and thus increase the premiums everyone else needs to pay.

But can this not be addressed by excluding the claims related to their pre-existing conditions, while allowing them to claim for other conditions? For example, in 2003, when I went for a major operation for colon cancer, the insurance company did not want to insure me. But five years later, they said I can be insured, but anything related to cancer, not covered. I think this same principle can apply.

From statistical studies, can the Minister share with the House what percentage of the elderly is likely to suffer from disability of one form or another? I believe this would need another exercise to warn the elderly to take precautions at an age when they are most vulnerable so that they can avoid disability where possible. Mr Speaker, Sir, in Mandarin, please.

(In Mandarin): [Please refer to Vernacular Speech.] The launch of CareShield Life has put many Singaporeans’ minds at ease. I have several clarifications to seek.

First, after a person has made a claim from CareShield Life, the amount of payouts will cease to increase. However, he continues to face inflation and the rise of medical costs. Why then can the payout not also increase in tandem?

Second, for those with pre-existing conditions, they cannot convert from ElderShield to CareShield Life. I understand that the inclusion of people with pre-existing conditions will increase the number of claims, thus increase the premiums that everyone else needs to pay. However, can we consider excluding claims relating to their pre-existing conditions while, at the same time, allowing them to still join CareShield Life?

Third, and also the most important point: why are the premiums for women higher? Why?

In Nee Soon South, very early in the morning, we see many women going to National Trades Union Congress (NTUC) FairPrice, Sheng Shiong and the market to buy daily necessities that their family would need. They carry many bags of fish, meat, vegetables and fruits and bring them home. After that, they will hurriedly go to work. Housewives would be busy with housework all day long. During the weekends, many of those who join community club activities are also women, taking part in Zumba, line dancing and so on. Therefore, the fact that women live longer should not be a surprise to us. They love life; they love their family. I am sure that men here in this Parliament would also agree with me that women should pay the same premiums as men. After all, insurance is about risk-sharing. We enjoy happiness and face difficulties together. Do you not agree, gentlemen? Thank you.

Mr Speaker, I stand in support of the proposed CareShield Life, which seeks to ensure that all Singaporeans will be protected by insurance and receive some basic financial aid, in the event that one should end up with a severe disability later in life.

I am happy to note that CareShield Life delivers upon a big improvement from its predecessor, the ElderShield, by providing higher payouts for life. This provides better protection to those suffering from disabilities, as I am sure that with a better living environment and better medical care, there will be more who will outlive the six-year limit on payouts under the current ElderShield. But while CareShield Life is an improvement, I do have some concerns that I would like to raise.

First, let me touch on the qualification for payouts. The proposed CareShield Life provides payouts for those deemed to be suffering from "severe disabilities" and this is defined as a person being unable to perform three of the six ADLs. I would like to ask the Minister, why start considering people as severely disabled only when they are unable to perform at least three ADLs? In many cases, being unable to perform two ADLs, or even one ADL, such as the inability to transfer yourself from your bed to a wheelchair, would be considered a severe impairment to living life.

Mr Speaker, in the normal course of ageing, we would find that the inability to perform basic ADLs would start gradually and increase progressively. I would like to ask the Minister if there are ways, in addition to CareShield Life, that we could identify and intervene early, and provide assistance to those who gradually lose the ability to perform ADLs. Because in some instances, help may come too late if we wait until one loses his ability to perform three ADLs.

Second, I would like to ask the Minister if MOH knows how many Singaporeans who have at least three ADLs today and are currently under ElderShield coverage have made claims or are receiving payouts? How many have not? My point is how can we help to ensure that those who are severely disabled, who are the most in need of the payouts, would have an easy time qualifying for them? Would they have to travel to the hospital to be assessed, or could local GPs do house calls to make the assessment? How many GPs are there currently qualified to make such house calls, and how can we simplify the assessment process so that those in need would not have to wait for an inordinate amount of time before receiving their payouts?

Third, I would also like to also ask how did the Committee decide on the payout quantum of $600. Many residents whom I spoke to question if $600 would be a sufficient amount, taking into consideration the challenges faced by one who is severely disabled, one who has inability to perform three ADLs. It is not difficult to imagine that those defined as such would require the constant help of a caregiver. But $600 would be insufficient to pay for the employment of one domestic helper.

Next, I would like to touch on the transitional subsidies. As part of the initial rollout of CareShield Life, the Committee has proposed to provide transitional subsidies of up to $250, spread over the first five years, to help Singaporeans ease into the new scheme. What is the rationale for providing the subsidy only for the first five years after the introduction of CareShield Life? What about those who will be 30 years old from 2025? Should they not also be eligible for such transitional subsidy? Would the Ministry consider making this transitional subsidy permanent, beyond the first five years, for future cohorts of Singaporeans?

Finally, I would like to raise a couple of concerns regarding possibly causing unintended consequences through implementing CareShield Life as it is proposed right now. Firstly, as many Members have already spoken on it, women will have to pay higher premiums than men. It is projected that premiums for women will be around 25% higher than those for men of the same cohort.

According to the 2017 Labour Force Report by the Ministry of Manpower, women are more likely than men to stay outside the labour force, and they made up 64% of residents outside the labour force in 2017. Family responsibilities were the top reason given which kept females outside the labour force. According to a study by a consumer research firm, Value Penguin, also released last year in 2017, men earn nearly 20% more than women in Singapore. And in some industries, this wage gap can be as much as 40%.

Mr Speaker, statistics show that labour participation of women is lower than men and, on average, women earn less than men. I am not a woman but, surely, we can find means to collectively offset the projected increase in healthcare spending for women due to their longer lifespan. Many Members have already spoken to ask for equality in premiums and I hope MOH can seriously consider having equal payment of premiums for both men and women.

Secondly, the looming uncertainty surrounding future premiums is concerning. While it is reassuring that the Government has guaranteed that no Singaporean will lose coverage due to the inability to pay their premiums, many are concerned if premiums will remain affordable in future. A recent news article reported that insurers offering IPs have made losses for the second year in a row. And with that, news reports say there is a possible increase in IP premiums in the years ahead. Would premiums for CareShield Life eventually become an expensive burden for Singaporeans?

Before I conclude, I would like to provide feedback on the public communications on CareShield Life. I have asked many residents what they thought of the proposed scheme. A common response is that the scheme is simply too complicated. Individuals do not quite understand how the scheme would impact them personally. How much premiums would I need to pay? Would my premiums continue to increase over time? What happens if I lose my job and cannot afford to pay the premiums for the period when I am unemployed? These questions often relate to personal circumstances.

Mr Speaker, as our MOH colleagues would know, I myself have sat through numerous briefings and presentations on CareShield Life. After each session, I find myself learning new information about the scheme. I am certain that our MOH officers are working very hard to communicate the scheme to Singaporeans. But the challenge remains that the scheme impacts individuals differently. Perhaps the Ministry can consider setting up a CareShield Life hotline or, in today's technology, a chatbot, to address individual's concerns and queries more comprehensively. With that, Mr Speaker, I support the introduction of CareShield Life.

[Deputy Speaker (Mr Lim Biow Chuan) in the Chair]

I would like now to touch on two areas – universal coverage and premium affordability and sustainability. The recommendation for universal coverage, regardless of financial status or pre-existing disability for future cohorts of Singaporeans starting from age 30, is one that is key for this CareShield Life. In 2020, cohorts aged 30 to 40 will be enrolled upon the launch of this enhanced scheme, with subsequent cohorts enrolled when they turn 30. This ensures that the coverage is inclusive, with everyone having basic financial protection for their long-term care cost. As the Committee had noted, this will strengthen our social compact and is aligned with our values of an inclusive and, more importantly, a caring society which we strive to build.

On this point of being inclusive and the fact that participation is compulsory, it does beg the question on why women need to pay higher premiums. Both the men and the women before me have said a lot on this point, but the point that I would like to make is that given the risk-pooling and the fact that we are making the scheme compulsory, it is only right that premiums should be equal, regardless of gender, and I hope that MOH will take this point into consideration.

While many can agree on the benefits of universal coverage and risk-pooling and participation for everyone from age 30 onwards, many in this age group are also at stages of their lives when they have multiple responsibilities. For some of them, they are starting families, at the same time supporting ageing parents. Hence, CareShield Life may be seen as an additional commitment on them financially.

For some in this cohort, they may already have coverage and this will be seen as a duplication and additional cost. Can the Minister share what consideration is being given to this and what does it mean for those who already have coverage which they have with private insurers?

Let me touch on coverage enhancements. One key point about CareShield Life is that it offers a higher payout than the current ElderShield Plan and, more importantly, it recognises the fact that it is an ongoing support and, therefore, lifetime coverage.

Payouts are in cash and there is also no restriction on usage. This flexibility is welcomed, as long-term care needs will differ from person to person, and long-term care itself will evolve. As we all know, whether it is informal care, home care services, nursing care, centre-based care as well as palliative care services, long-term care needs are quite strenuous financially, and this flexibility is definitely welcomed.

Let me now touch on the point about premium affordability and sustainability. With CareShield Life's enhanced payouts and benefits, there is still the question of premium affordability. The recommendation to keep premiums low – besides risk-pooling that I touched on earlier as well as starting younger for the premiums to be spread across a longer period and also allowing for MediSave to be used to pay for premiums – does help in ensuring affordability because it eases the out-of-pocket expenses. Despite this, there is a lot of questions around how the premium amounts have been arrived at. Can the Minister share the actual principles that were used to determine premiums?

There are also commitments made to support lower and middle-income Singaporeans to keep premium affordable with the permanent means-tested premium subsidies, the transitional subsidies, as well as the Enhanced Premium Support for Singaporeans still unable to afford their premiums even after the subsidies.

I would like to also touch on the point, apart from premiums today, how are premium increases going to be managed or is there going to be an independent council. Can the Minister share more details about how premiums will be kept affordable over time?

The other point is about MediSave. CareShield Life premium is another premium – apart from MediShield Life premium – that MediSave can be used for. So, MediSave is also used for other outpatient and inpatient needs. So, the question for many is "Will there be sufficient funds in MediSave for the premiums?" And with the changing models of employment – with freelance and contract work as well as the gig economy – incomes may not be as stable and, therefore, MediSave contributions may also be impacted.

I would like to touch on the last point on means-testing. For means-testing, apart from the fact that the usage of the scheme and the payouts will be dependent on the strict criteria for the three ADLs, the means-testing for the subsidies and the eligibility criteria are a point that I would like to touch on and would like to ask with regard to the use of the annual value (AV) of a residence as a criterion for means assessment because, if the annual value is above $21,000, what it would mean is that, automatically, it will disqualify the individual from eligibility even if he or she is of lower income because he may be living in a residence out of the goodwill of family members and may not own that property. But as long as AV is used, he or she would be automatically disqualified from the subsidies if this is the same case of how AV is going to be used for the means assessment.

This being the case, this would also mean that per capita household incomes may not be considered because they have already not met the AV criterion. The reason why I am highlighting this is that half of the residents in my ward live in private condominiums and landed homes and their AVs are above the $21,000 criterion and not all of them own these properties and many do live with their family members and some are seniors and have retired as well.

So, I hope that the Minister would consider how the AV criterion will be used for means-testing. The scheme itself is also, as many have mentioned today, fairly complex. So, the communication of the scheme, and especially for those who are on ES300 and ES400, the encouragement for them, if they are eligible to go on to CareShield Life, is not as straightforward in terms of understanding, given the incentives that are provided as well as the various complexities around the scheme. So, I hope that, besides the tools and the information provided, MOH would consider setting up an advisory support to provide guidance for this segment as they do the assessment of whether to join CareShield Life or not. Mr Deputy Speaker, notwithstanding my clarifications, I support the Motion.

Mr Deputy Speaker, in Malay, please. Before I start, I would like to thank the Committee which have presented a very good Report.

(In Malay): [Please refer to Vernacular Speech.]  Before I start, I would like to express my thanks to the ESRC for producing an excellent report.

I join my fellow Members of Parliament in supporting the Motion tabled by the Health Minister just now. He gave a comprehensive speech on the various schemes that are in place to provide support to our Citizens and Permanent Residents for their healthcare needs in the years ahead. In particular, CareShield Life now offers lifetime cash payouts, especially for those with severe disability. Indeed, it has better coverage, albeit with higher premiums, than the existing ElderShield scheme and is part of the Government’s initiatives to address the issue of our ageing population. However, there are some issues I would like to seek clarification from the Minister.

Currently, we have a number of insurance schemes, ranging from MediSave, MediShield, Integrated Shield, ElderShield300, ElderShield400, and now ElderFund and CareShield Life. I think many people are still grappling with the terms and conditions with regard to how to use these schemes. And, come 2020, they have to make informed decisions whether they want to opt for CareShield, and why they have to top up the premiums. There is a lot to digest. Unless one is working in the frontlines of the insurance industry, and unless one is also working in the frontlines of the healthcare industry handling claims and counselling patients on how to use the different schemes, many of them may not understand the impact of this enhancement to ElderShield. I hope, at some point in the future, the Government would be able to streamline everything, simplify them and make them more digestible to the man-in-the-street.

As I see it, it will be a mammoth exercise for the Government to explain this latest scheme to the masses. Many will, I foresee, perhaps merely catch a glimpse of what is being rolled out in the media.

Sir, I would like to ask the Minister, in the case of CareShield Life, by providing higher payouts and at the same time imposing higher premiums, especially as premiums increase over time, would this situation be sustainable? There is no doubt that the payment is made via MediSave, but this same MediSave is also used for the payment of MediShield Life and hospital expenses incurred over time. As our people get older and reach an advanced age, would there be sufficient funds in their MediSave to pay their premiums?

As it is, I believe there are cases where people can actually use up all their MediSave money for their treatment and, in such situations, how are they to pay the premiums for CareShield? This is especially true amongst the elderly who are no longer working.

In addition, there is another group comprising self-employed workers. Some may not be able to afford to pay the premiums, especially the younger workers who may take up an odd job here and there, such as performing ad hoc delivery services, among others.

And to complicate matters further for this group, if they are staying with their parents, the AV of their home may not meet the threshold of $13,000 and below to be eligible for additional financial support. Can the Minister share how self-employed workers’ concerns can be allayed and help explain why the threshold of the home value of $ 13,000 was used? During my constituency home visits, I do see seniors who stay in homes that are worth more than the AV of $13,000 but have no fixed income. Perhaps they have just lost their life partner.

Another question that I would like to ask the Minister is the different premiums for women. I am of the opinion that we should not differentiate the premium rates that women should pay. Although statistically they are living longer, I think that all the men in this Chamber as well as the rest of Singapore will not object to providing this additional help for women, as they may be our own mothers, wives and daughters. Hence, it is important that this matter is resolved. Perhaps the Minister can clarify.

Another point I would like to ask is the withdrawal of funds for disabled persons under ElderFund. I applaud the Minister for setting up this new fund to help lower-income Singaporeans who are severely disabled. But what is the source of these funds for ElderFund? How is the withdrawal amount of $50-$200 derived? If we look at today’s prices, $50-$200 cannot buy us many things. In 2020, the purchasing power could be less, taking into consideration inflation and other factors. Therefore, can the Minister consider reviewing this withdrawal limit when we are closer to the policy’s implementation? In addition, how do we safeguard those who are severely disabled to ensure that the withdrawal amount is sufficient, especially if they are also suffering from dementia or any other mental disabilities? The need to have responsible family members or caregivers is a very important one, so that the money is spent wisely on the intended recipient and does not go into someone else’s pocket.

In people’s minds, they will say, "I am on ElderShield, and so what should I do?" For this group, they will be glad to know that they can upgrade to CareShield Life from 2021. True, it is not compulsory to upgrade. But if you do, you are required to pay more in terms of premiums. Hence, for those who have opted out from ElderShield, they can opt in to CareShield Life if they are not disabled.

Next, when this group reaches the crossroads where they are not on ElderShield, but yet have the option to choose CareShield Life coverage, how can the Government help these people to make informed decisions? Will reminders be sent to them to let them know that such options are available to them?

Again, in the case of those on ElderShield400, come 2021, will they be reminded and advised that they have two years to opt out without any penalty?

I would also like to point out that for those born before 1980, MOH has introduced incentives to join CareShield Life. This applies whether they are already on ElderShield or had opted out previously. This group has a choice whether they wish to select CareShield Life or otherwise, and they can receive financial incentives, spread over a 10-year period, if they join within the next two years.

Mr Deputy Speaker, CareShield requires that everyone, starting from the first batch aged 40 years old and below, would be on board in 2020. Perhaps it is good that the younger generation are given the choice whether or not they want to opt in or opt out. As we all know, MediShield is compulsory as it covers hospitalisation. But younger people may have bought their own policies. It will be good to share information with this group, so that they can better understand their needs, and give them the option to decide. Hence, a good public education exercise will be needed.

(In English): Mr Deputy Speaker, given that, I support the Motion.

Mr Deputy Speaker, Sir, I rise in support of the Motion. Let me begin in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] MOH's CareShield Life is a very thoughtful initiative. In the past, Singaporeans were afraid of getting sick and not being able to afford the medical cost. We, therefore, introduced MediShield Life. Today, if Singaporeans become bedridden, they will have CareShield Life as a protection so that they would not have any regret.

A good policy needs to be communicated clearly to garner support from the people. Therefore, I have three "big" questions and two small ones to ask the Minister. These questions should be explained patiently but acted upon quickly.

First, I hope the Government can explain clearly why Singaporeans need to start to pay CareShield Life premiums at age 30. At this age, people are still quite robust; their career would have just started, and they are beginning to have a family. This is a time when their living expenses are shooting up. Few people would envisage that they could be severely disabled at some point. So, I would like to ask the Minister, at this point in time, how many Singaporeans below the age of 40 are severely disabled?

Furthermore, under the current ElderShield, people only start to pay premiums when they reach 40 years old, and the payout rate is only 4%. In other words, out of $100 premiums that Singaporeans pay, the Government only need to pay out $4 to those severely disabled. In addition, there are 36% of Singaporeans who opted out of ElderShield. In comparison, CareShield Life is universal coverage. Logically, the payout rate of CareShield Life should be much lower. Therefore, why do we ask people to start paying premiums from 30 years old?

Now, consider this. If a Singaporean in his 30s and 40s is, indeed, severely disabled, then he will get a payout every month for several decades. It is very costly. Insurance is risk pooling. In fact, it is quite common for a 30-year-old to buy insurance. Many Singaporeans start to buy life insurance once they start to work. The logic behind it is to prepare for rainy days when you are doing well. However, many Singaporeans are still not convinced that they must immediately join CareShield Life when they reach 30. So, I hope MOH can explain it in a way that they can easily understand, using illustrations if need be.

Secondly, the Minister informed us that CareShield Life’s financing model is prefunded. Therefore, in the next 10 years, the payout rate will be as low, or even lower, than that of ElderShield. The Minister also said that CPF Board will help invest the large sum of CareShield Life premiums, and the returns will also benefit insured Singaporeans. Currently, the lowest interest rate of MediSave is 4%. I hope that CPF can peg the returns on CareShield Life to the lowest MediSave interest rate so that even if CareShield Life payouts increase by 2% annually, the premiums need not be increased.

Third, since CareShield Life is described as a silver bullet by MOH, then we should intensify public education efforts so that all Singaporeans can benefit from it. However, CareShield Life cannot prevent us from falling sick. What is more important is that we exercise regularly, eat more healthy food. The Minister has also said that MOH will work closely with grassroots organisations so that they can explain how ElderShield policyholders can convert to CareShield Life. This is an important first step.

However, to encourage those who have not participated in ElderShield to join CareShield is even more important. In particular, we should encourage those low-income Singaporeans to join the scheme. Perhaps the Government can consider using the recently established ElderFund to help pay for their premiums for the first five years. The subsidies can be lowered gradually each year.

I will talk about the next two "small" questions in English.

(In English): Mr Deputy Speaker, Sir, CareShield is a very good initiative, a very good insurance scheme and a very important social safety net. With this universal insurance scheme, I am concerned that it may overlap with other insurance policies that Singaporeans have been buying. Some of these insurance policies come with disability income payouts. My understanding is that in the event of disability, people can only claim from one insurer unless the Government intervenes. We do not want a case whereby Singaporeans are over insured and paying insurance premiums more than necessary. Thus, I hope that MOH can coordinate with the insurance companies to prevent such an occurrence.

Last but not least, many Singaporeans would like to rehabilitate at home with tender loving care by their loved ones. However, the caregivers at home face mounting challenges. Even with CareShield, I hope the Government will continue to invest in resources to bring the nurses, therapists and doctors to the homes to help Singaporeans recover after a mishap.

Mr Deputy Speaker, Sir, I rise to support the Motion.

Sir, first of all, I would like to register my thanks with the CareShield Life Review Committee. I believe the CareShield Life Review Committee has done its best to address a wide range of issues concerning Singaporeans and has produced a comprehensive report articulating the tradeoffs considered and making many good recommendations for the scheme, formerly known as ElderShield.

CareShield Life and MediShield Life are similar in their philosophy and principles, in essence, to provide basic protection for all Singaporeans. In my speech during the Parliamentary debate on MediShield Life in 2014, I had set out my arguments in support of the scheme, and I would like to rehash part of it today.

In principle, our health is ours and each of us has the responsibility of taking care of ourselves. However, we know in reality that relying on ourselves alone may not be sufficient, as care expenses are costly and not everyone has high earning power. Moreover, some Singaporeans may be more unfortunate to be hit by serious or debilitating illnesses that require long-term care. Hence, there is a need for additional support from other sources.

Different countries adopt different ways of tackling this issue. Some completely socialise the cost, and fund care expenses through taxes. But this can lead to escalating, and potentially unsustainable, public healthcare expenditure. In some developed economies like the United Kingdom (UK), public healthcare expenditure is one of the most costly fiscal items each year. Others do it through insurance: collecting premiums from everyone, pooling the funds collected and then allocating the money as required by the population. But such systems work only when everyone contributes, regardless of whether they think they will need to tap on the common pool. This requires a strong sense of national solidarity and willingness to help their fellow countrymen.

In Singapore, we face similar challenges and responded with the 3M system, namely, MediSave, MediShield Life, and MediFund.

While the 3M framework is robust, this House agreed that we could do more as a society. Our society has been expounding the need to be caring and inclusive. We all feel a deep sense of compassion when we see someone in pain and we all feel the need to help that someone to lead a life as normal as possible again. As a society, we talked about it, we argued for it and we did it when this House finally passed the Bill on MediShield Life in 2014. Through a universal public health insurance in the form of MediShield Life, we pooled our risks and money to help those who incur such expenses. Therefore, we collectively understand the philosophy and need for public insurance as one of the pillars in our social safety net. Since this House had supported MediShield Life, then, philosophically, there is no reason not to support CareShield Life.

However, there are some questions and concerns that ordinary Singaporeans have and I would like to reflect these in this debate and to seek answers from the Government. The first pertains to the New Enrolment batch, and that would be the young today.

From 2020, all Singaporeans born in 1980 or after will automatically be enrolled into CareShield Life, regardless of pre-existing conditions or disabilities. Locally collected data showed that one in two healthy Singapore residents aged 65 today could become severely disabled in their lifetime. This means that if we are lucky to live beyond 65 years, each of us has a 50% chance of becoming severely disabled in the remaining years and can expect to incur high cost of care in the years that follow.

Despite this high probability, our young today question the need for the scheme to be made mandatory for all. This is understandably so. Many, who are still in the prime health, do not anticipate severe disabilities when they age. Many also do not see the urgency in planning for the possibility of age-related disabilities at this point. Hence, they would want to preserve their autonomy in choosing whether and when to enrol themselves in such a universal public insurance scheme.

Furthermore, the sense of importance for risk-pooling is diminished when they observe that the total claim of $100 million is only a small fraction of the total premium collection of $2.6 billion as at end-2015. "What happens to the huge sum of money remaining in the pool?", they ask. “Who pockets the rest?”, the more cynical amongst them may also ask.

Therefore, there is a need for more and targeted engagements with the younger Singaporeans to not only explain the philosophy and design principles of CareShield Life, but to also answer the questions they have. Some of the questions would be as follows.

First, for each cohort of Singaporeans, in terms of caring for an individual with disability, how much of the cost is borne by the Government, by the individual and by peers? Is this the right balance?

Second, what is the long-term financial impact on the system and on our population if Singaporeans preserve their right to choose whether to enrol in CareShield Life?

Third, could the Ministry explain why there remains such a huge sum of money in the pool?

Fourth, looking ahead, for each cohort of premiums collected, what is the expected proportion of claims?

Fifth, if there is money remaining from that cohort, what will happen to the money?

CareShield Life ensures universal coverage and offers basic long-term care assurance for the current and future generations of Singaporeans. It is a very real way of translating the idea of inclusivity into real policy. However, the mandatory nature of the scheme also means we must garner overwhelming buy-in and support from Singaporeans in order to sustain this pillar of support. Allow me to continue in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] Mr Deputy Speaker, we had a heated debate on MediShield Life in this House and passed the Bill in 2014. Back then, the purpose of passing this medical insurance was to provide universal coverage for Singaporeans so that all will receive basic protection. Besides Government grant and our own MediSave, MediShield Life will help us to cope with unforeseeable risks. It is a risk-pooling mechanism whereby people put their money together and allow those in need to pay for large medical bills. Everyone will have equal chances.

Nowadays, our population is ageing rapidly and the family size is also shrinking. It is inevitable that Singaporeans must help one another and work together. Hence, the implementation of MediShield Life is, in fact, to plan for our own, as well as for others' future.

Today, we are debating CareShield Life. In principle, CareShield Life and MediShield Life are the same. Statistics have shown that in Singapore, one out of two Singaporeans will develop severe disabilities after 65 years old. In other words, among an elderly couple, one of them will, at some point, develop severe disabilities due to degenerative diseases and become dependent. This will have a big impact on their living expenses in the coming years. Therefore, to prepare Singaporeans for the future challenge is a pressing task.

Although we can understand the rationale behind the CareShield Life in principle, the Government must understand how this will affect our people and give appropriate support.

The group that will be affected the most will be the middle-income, middle-aged Singaporeans – the so-called "sandwich class". This group of people have their young to feed, old to support and are also feeling the effects of ageing. They are most concerned about the affordability of CareShield Life premiums. They are not only concerned about the increase of the premiums, but also whether they have enough cash to pay for this inevitable cost item.

Firstly, they have to support their families' living expenses, and the amount of cash they can fork out is limited. Secondly, their MediSave is, in fact, shrinking continuously to pay for medical expenses of their own, their parents, and their children who have yet to work. They also have to pay for MediShield Life. Now that CareShield Life will be added on top of all these, they are worried that they would not have enough money.

They have also heard that the claim process is tedious. If severe disabilities indeed happen, the tedious process will be like “adding frost to snow”.

Hence, the Government must give enough support to this group of Singaporeans. Otherwise, even if they have the heart to support CareShield Life, they may not have the ability to do so. I hope the Government can pay more attention to the sandwich class and help them more. They may have some illnesses but are generally still healthy. They may not appear to qualify for MediFund or ElderFund because of their income but, in reality, they are under heavy family financial burdens. For this group of people, what kind of support and protection will be available from the Government?

I believe our ultimate goal is to ensure that every Singaporean will have basic long-term care protection. Hence, the Government must balance various considerations and look after the vulnerable during implementation. Only by doing this, can we achieve the goal of CareShield Life.

(In English): Women policyholders are expected to pay a higher premium than men and this stands out starkly. The main reason articulated was that women have a longer lifespan on average and risk being disabled for a longer period of time. It is also a common practice in other countries. Arguably, however, the idea of a public insurance plan is to pool risks and resources to help one another. First, should women not be allowed to pay the same amount of premium as the men in their respective cohorts?

Moreover, many women sacrificed their prime years to stay home and care for their loved ones. The years away from work mean they may have little or significantly less savings in their MediSave. These women may also not come from well-to-do families who have little to contribute to their MediSave even if they wish to. So, I would like to ask: what will the Government do to help this group of Singaporean women cope with the inevitable cost burden? What can they count on to ensure their own long-term care and protection without having to fear burdening their own families?

Sir, questions and concerns that need to be addressed aside, there is a real need for Singapore to get ready for the consequences of an ageing population. My sincere hope is that we will all enjoy good health, lead a full and fulfilling life and, rather than having to spend on our care needs, are able to spend on things that we enjoy. But the reality is that we can never be sure of what will happen to us in the years to come. The statistics in Singapore and other developed countries, such as the US, UK and Japan, highlight just how prevalent severe disabilities are amongst their aged – in Singapore, one in two; in the US, also one in two; in the UK, eight in 10; and in Japan, the statistics are expected to triple in the next two decades.

Sir, it would be too late if we only start to worry or find ways to finance our care needs later in life when our familial obligations intensify, or worse, when we suffer disabilities. It is also unsustainable and unfortunate if we have to burden future generations – which is, by the way, shrinking because of our ageing population – to fund our own care needs.

Very importantly, CareShield Life provides better long-term care and protection for all Singaporeans. This does not mean that the Government can cut back its support, this does not exonerate individuals from exercising personal responsibility, but this does enable us to pool our risks and help our fellow countrymen through times of need. In a society that expounds the importance of compassion and inclusion, all of us will need to contribute, in ways big or small, in one way or another. I support the Motion.

Mr Deputy Speaker, to support the needs of our ageing population, we need to approach the issue comprehensively. Besides financing, we should also invest in aged care service capacity, enhance care quality, and build communities of care and a strong social support system. In particular, Dr Lily Neo and Mr Ang Wei Neng asked how the Government is improving the long-term care infrastructure to help severely disabled seniors age and receive good home care. Let me elaborate on some of these efforts.

First, we have grown our aged care capacity significantly. We are on track to achieve 10,000 home care places and 6,200 day centre places by 2020. For seniors who may need institutional care, we have added 1,200 community hospital beds and 5,300 nursing home beds since 2011. We have also grown our healthcare workforce by about 36% since 2011. We will continue to expand the range of home and community care options and pilot new models of care, such as the Integrated Home and Day Care (IHDC) packages rolled out in 2016, which help to provide frail seniors with home and day care services that cater to their unique needs. In fact, by 2020, we hope to provide 90% of seniors with access to an eldercare centre within a one-kilometre radius from their homes.

Second, we will also invest in improving service quality. We have progressively raised care standards, such as introducing the Enhanced Nursing Home Standards (ENHS) to ensure residents receive safe and good care. We have also introduced developmental service guidelines as a reference for home and centre-based providers to work towards delivering good quality care for our seniors.

Third, we are integrating social and healthcare support to better meet the needs of our elderly in their communities. We are building communities of care through the Community Networks for Seniors (CNS) programme to help seniors age well in the community through preventive health and active ageing programmes and the integration of social and healthcare support for frail seniors with complex health and social needs.

With the new Silver Generation Office (SGO) under AIC, MOH can better serve our seniors’ needs in a holistic manner, with support from over 3,000 Silver Generation Ambassadors. Mr Gan Thiam Poh suggested recruiting Ambassadors to explain the enhancements to residents.

We will definitely leverage SGO’s outreach capabilities to reach out to seniors, explain how these new enhancements help support their long-term care needs and direct them to relevant financial assistance. Residents will find the Ambassadors a familiar face as they had also helped many seniors understand the PG Package, MedShield Life and many other assistance schemes.

Fourth, the Government will continue to support the needs of Singaporeans with ageing-related cognitive conditions and their caregivers under the Community Mental Health Masterplan. For instance, we have established six Dementia Friendly Communities to increase the awareness of dementia in these communities so that persons with dementia and their families feel included and supported to continue living at home. We aim to have 15 such Communities by 2021.

While we continue to improve our service capacity and quality and grow community networks to better support our elderly, we must also ensure that Singaporeans plan ahead and are able to financially cope with their long-term care needs.

Minister Gan has outlined our long-term care financing philosophy and the role that insurance plays, together with family and Government support. The ESRC made many good recommendations, and I am optimistic that these enhancements will provide better protection and assurance for Singaporeans to age actively and well in the community. Let me speak on three key aspects of the new scheme.

First, the new CareShield Life will be an inclusive scheme. For future cohorts, CareShield Life is not just an insurance scheme, but will be an important part of our social safety net. It will provide universal coverage for all future cohorts of Singaporeans born in 1980 or later, regardless of financial, health or disability status. This means that all Singaporeans in these cohorts will have basic protection for their long-term care should they become severely disabled.

Mr Gan Thiam Poh, Ms Jessica Tan, Mr Saktiandi Supaat, Mr Ang Wei Neng have asked why CareShield Life is not optional for future cohorts, given that some young Singaporeans might already have bought their own policies. Including all future cohorts allows us to maximise the size of the risk pool, which keeps premiums affordable and the scheme sustainable. If the scheme is optional, those with pre-existing disabilities cannot be covered, as healthy Singaporeans would be more likely to opt out of the scheme. Over time, the risk-pool would worsen and the scheme would become unsustainable. Other vulnerable groups like the low-income may also drop out of the scheme because of an inability to pay.

As CareShield Life provides payouts in cash, they would not duplicate existing policies that Singaporeans may already have purchased. There is also a misperception that private disability insurance products, such as total and permanent disability plans or disability income replacement plans, provide similar coverage to CareShield Life. These plans typically only provide coverage during one's working years, up to age 60 to 70, as they are meant to insure against loss of income. This means that in our old age, when we are most likely to become severely disabled and need long-term care, we will no longer be covered by these plans. On the other hand, CareShield Life will provide coverage for life.

There are different views among Members about what age should Singaporeans be enrolled into CareShield Life. Mr Gan Thiam Poh suggested 21, Mr Ang Wei Neng suggested 40. The ESRC likewise received a range of suggestions. We agree with their recommendation to start at 30, and we understand that this was an age that many youths engaged by the Committee felt would be reasonable. At 30, most feel that they would have started working and managed to build up some savings in their MediSave. Starting at 30 instead of 40 also means they have more years to spread their premium payments, which makes their annual premiums more manageable.

The Government will provide means-tested premium subsidies and transitional subsidies to ensure that premiums are affordable, particularly for the lower-income. We will also provide Additional Premium Support for those who are unable to afford their premiums even after subsidies, so that no one loses coverage due to financial difficulties. Including those with pre-existing disabilities in future cohorts in our national long-term care insurance scheme is part of our collective responsibility and is fundamental to our inclusive and caring society.

Individuals in future cohorts with any pre-existing disabilities will only need to pay the first-year premium to join CareShield Life, and, thereafter, will be able to benefit from the payouts, as long as they remain severely disabled. The premium amount is less than the first monthly CareShield Life payout they will receive. An individual who will benefit is 36-year-old Mr Mohamed Hasan, who has cerebral palsy and is physically unable to perform all ADLs. As he will be part of the future cohorts to be enrolled in 2020, he will be able to receive CareShield Life payouts from 2020 for as long as he remains severely disabled.

Mr Gan Thiam Poh and Mr Ang Wei Neng asked how many Singaporeans in the future cohorts have severe disability. The prevalence of severe disability at younger ages is low. Only a very small proportion, less than 0.1%, of the future cohorts aged 30 to 40 may already be severely disabled when they first join CareShield Life.

The Government will inject $100 million into the CareShield Life insurance fund to cover a significant portion of the costs of including Singaporeans in the future cohorts with pre-existing disabilities. The remainder of the costs will be socialised across all CareShield Life policyholders in the future cohorts, with everyone playing our part to support fellow Singaporeans in need. This is in line with our vision of an inclusive and caring society. During public consultations, the ESRC also found support for this among Singaporeans.

Ms K Thanaletchimi and Mr Zainal Sapari asked why CareShield Life is not universal and mandatory for Singaporeans from existing cohorts, since CareShield Life provides better protection and greater assurance than ElderShield. The Committee had considered this during their review, and decided this was not feasible, given the nature of CareShield Life as a prefunded insurance scheme.

Unlike MediShield Life where premiums are paid for life, CareShield Life premiums are paid till age 67 even though it provides lifetime coverage. This means that CareShield Life premiums are heavily prefunded. Older Singaporeans from the existing cohorts would, therefore, need to pay significantly higher annual premiums under CareShield Life, as they would have fewer years to spread out their premiums needed to support the benefits under CareShield Life.

Some Singaporeans in existing cohorts have also previously made decisions about their ElderShield coverage when they were auto-enrolled at age 40, as Mr Png Eng Huat had also shared earlier. When ElderShield was launched in 2002, 38% of Singaporeans who were auto-enrolled opted out. While the opt-out rate has dropped to 5% in 2017, about one in four people in the existing cohorts have opted out of ElderShield. Others may also have made plans for their long-term care needs. As of 2017, about one-third of ElderShield policyholders have bought ElderShield Supplements from the ElderShield insurers.

Taking into account these considerations, the Committee recommended that it would not be practical to make CareShield Life mandatory for these individuals. However, the scheme should remain open for them to join, if they are not already severely disabled.

I want to assure Members that CareShield Life will still be an inclusive scheme for existing cohorts. Ms Chia Yong Yong asked about the treatment for Singaporeans in existing cohorts who want to join CareShield Life. Singaporeans in existing cohorts can join the scheme as long as they are not severely disabled or able to perform at least three ADLs, even if they have medical conditions, such as diabetes or hypertension. This is consistent with our inclusive vision for CareShield Life.

The Government will provide participation incentives to encourage existing cohorts to join CareShield Life within the first two years. These incentives will help to shoulder a significant part of the costs of including those in the existing cohorts with pre-existing medical conditions or mild disabilities. This is on top of the premium subsidies we are providing to lower- and middle-income policyholders. After the first two years, underwriting will be tightened such that those in the existing cohorts assessed to be unable to do any of the ADLs will not be able to join to minimise adverse selection and moral hazard so that the scheme remains sustainable and fair for all policyholders.

For ElderShield policyholders who do not wish to join CareShield Life, they will continue to be protected by their current ElderShield policies. Dr Lily Neo and Ms K Thanaletchimi asked how would those who are already severely disabled in the existing cohorts be helped, if they are unable to join CareShield Life? Mr Zainal Sapari and Er Dr Lee Bee Wah also asked for the actuarial considerations and premium impact, if we were to include those with pre-existing severe disabilities in the existing cohorts from CareShield Life.

The proportion of Singaporeans who are severely disabled at the older ages is much higher – about 7% of Singaporeans aged 65 and above today are severely disabled, compared to less than 0.1% of Singaporeans aged between 30 and 40. Including the severely disabled from existing cohorts in CareShield Life would significantly increase premiums by about 30% for the rest of policyholders in these cohorts.

The Government will support Singaporeans from existing cohorts who are already severely disabled and unable to join CareShield Life through other measures, including MediSave and ElderFund. These are initiatives that Minister Gan spoke about earlier. Mr Saktiandi Supaat asked whether the payout amounts for these new initiatives are enough.

I would like to clarify that these initiatives are designed to complement other existing Government subsidies and funding schemes, such as the Seniors’ Mobility and Enabling Fund and PG Disability Assistance Scheme (PioneerDAS), as well as our other safety nets, including MediFund and ComCare, to help Singaporeans afford their long-term care costs. They should not be seen in isolation. Nevertheless, Ms Thanaletchimi, Mr Saktiandi Supaat and Ms Tin Pei Ling should rest assured that the Government will continue to review our financing policies to keep healthcare and long-term care affordable for all Singaporeans.

Many members, like Dr Chia Shi-Lu, Ms Sylvia Lim, Assoc Prof Daniel Goh, Mr Melvin Yong and Ms Tin Pei Ling, have also asked why CareShield Life premiums have to be gender differentiated. The ESRC had debated this topic extensively and it was not an easy decision to make. Women live longer than men and are, therefore, more likely to spend more years in severe disability, as all of us are more likely to become severely disabled at the older ages.

Let me share some statistics. In 2017, the average life expectancy at birth for women is 85.2 years, as compared to 80.7 years for men. Minister Gan had earlier shared that one in two Singaporeans at the age of 65 are expected to become severely disabled by the end of their lives. Breaking this down by gender, using the same statistics, three in five healthy women at age 65 are expected to become severely disabled by the end of their lives, compared to two in five healthy men at age 65.

At the older ages, when disability is likely to take place, women are also more likely to remain in disability for a longer time than men and, hence, will draw on CareShield Life payouts for a longer period should they become severely disabled.

Based on a longitudinal survey of older Singaporeans in 2009 and 2011 to 2012, researchers estimated women aged 60 are expected to spend 7.8 years requiring assistance with any of the ADLs by the end of their lives, compared to 2.6 years for men aged 60.

Other countries, like the US, found similar gender-differentiated disability trends. In a longitudinal study of US men and women between 1982 and 2011, researchers estimated women aged 65 in 2011 are expected to spend about six years requiring assistance with ADLs by the end of their lives, compared to about three-and-a-half years for men aged 65 in 2011. Two-thirds of long-term insurance claims benefits paid out in 2012 went towards females.

It is, of course, possible to have a scheme where men and women pay the same premiums. The Committee did consider that women have less savings on average and could, therefore, be better supported by the men.

However, on balance, the Committee decided that applying gender-differentiated premiums for CareShield Life would more accurately reflect the differences in risk between men and women and result in a more actuarially fair and sustainable scheme. While CareShield Life is compulsory for future cohorts, it must be noted that it is not compulsory for existing cohorts. So, there will be adverse selection. Hence, it is better to be actuarially fair and correct.

The Committee emphasised, however, the need to provide premium support for lower-income and middle-income policyholders. The Government accepts the Committee’s recommendations, though I must assure this House that the Ministry, not just myself, but my other colleagues, similarly had great difficulty in coming to this decision. It was not an easy decision. Some may ask why should we differentiate premiums between men and women if we say CareShield Life is an inclusive scheme? While we have designed CareShield Life to be inclusive, on balance, it is also important for the scheme to be equitable and sustainable and avoid adverse selection. To that end, premiums must be actuarially sound.

The Government will address the issue of affordability directly. In line with the progressive design of our healthcare financing system, the Government's premium subsidies for CareShield Life are means-tested, with the quantum of support based on a percentage of premiums. This also means lower- and middle-income females will receive larger dollar quantum of Government subsidies, compared to the men in their age cohort with the same income levels. And in line with our effort to promote strong family values, care and support, immediate family members, such as their spouse, can also help pay for their premiums with their MediSave, or top-up their MediSave with cash to help them pay for the premiums. The Government will also provide Additional Premium Support for those with less financial means, so that no one will lose coverage due to financial difficulties.

Overall, this design will support the sustainability of CareShield Life, while ensuring that premiums remain affordable for all Singaporeans, regardless of gender. We will continue to explore how to give more help to women who face difficulties but, on balance, it is more prudent to keep the scheme actuarially correct and fair.

Some will ask why this is a different approach from MediShield Life. MediShield Life premiums are payable for as long as a policyholder lives. While women may make more claims since they live longer, they would also have paid more years of MediShield Life premiums compared to men. On the other hand, CareShield Life premiums are only paid until the age of 67, although policyholders are covered for the rest of their lives.

Second, CareShield Life provides flexibility to age in place. In enhancing our long-term care financing system, it is also important to bear in mind that Singaporeans have different needs and preferences for their long-term care, and the majority prefer to age at home and in the community.

Similar to ElderShield, the Committee had recommended CareShield Life to provide cash payouts instead of using CareShield Life to reimburse the use of specific long-term care services.

We support the Committee’s recommendation. Let me explain. Reimbursement of specific long-term care services may, at first glance, provide more reassurance to claimants and their caregivers, as the reimbursements would be pegged to the costs of the services. However, cash payouts will provide claimants and their caregivers more flexibility to decide on care arrangements appropriate to their needs and do not limit care to certain long-term care services in order to be eligible for claim. This design also recognises that long-term care needs might extend beyond medical needs and will better support policyholders who choose informal care at home or in the community instead of formal care services. Cash payouts also support our overall efforts to go Beyond Hospital To Community, to support care in the community and allow more seniors to be cared for at home.

The Government also currently provides subsidies of up to 80% for home and community care services. This is also why we designed the two new enhancements that Minister Gan announced – MediSave withdrawals for long-term care and ElderFund – to also pay out in cash.

Mr Saktiandi Supaat asked what safeguards will be put in place to ensure cash payouts will be spent on the care of severely disabled individuals, especially those suffering from dementia. We recognise that severely disabled individuals may be more susceptible to exploitation, especially if they lose mental capacity. We will design the three schemes’ claims processes carefully, and put in place checks and audits to ensure that payouts are used for the care needs of the claimant. We will do this in a way that does not inconvenience the claimant or his caregivers. It is also useful for all of us to make a Lasting Power of Attorney (LPA) early and choose our donee carefully, as Ms K Thanaletchimi pointed out. We should appoint someone we trust to act in our best interests should we lose the capacity to make decisions.

Finally, CareShield Life will provide a better claims experience. As at end of 2017, 15,600 policyholders have made ElderShield claims and benefited from the scheme. Some of these policyholders and their families or care providers have provided feedback that the current ElderShield claims process is confusing. Mr Melvin Yong asked how we will ensure that severely disabled policyholders and their caregivers navigate the claims process more easily.

We wholeheartedly support the recommendations by the Committee to improve the claims process for CareShield Life.

The Committee had put in a lot of effort to understand the current ElderShield claims process and developed a good set of recommendations to improve the claims process.

Under CareShield Life, policyholders and their caregivers can expect a claims process that is easier to navigate. Today, in order to be assessed for ElderShield claims, policyholders will need to see an appointed ElderShield assessor, who will complete the ElderShield disability assessment for them. There are currently 127 assessors, 13 of whom can provide home assessments.

For CareShield Life, we will not require policyholders to arrange for a separate disability assessment, if an equivalent disability assessment had already been done for them by their doctor, therapist or nurse in the course of receiving care in a health or long-term care setting. For those who need a separate disability assessment, we will expand the pool of assessors beyond doctors to include occupational therapists, physiotherapists and nurses. This will make it more convenient to go for an assessment. Ms K Thanaletchimi suggested the assessment fee be waived for the cognitively impaired. The Government will waive the first assessment fee for all policyholders, regardless of whether the claim is successful, so that the fee does not deter eligible policyholders, especially the lower-income, from making a claim. Subsequent assessment fees will be reimbursed if the claim is successful. Ms Joan Pereira’s suggestion for proper communication to policyholders who make a recovery is also well-noted, and we will certainly follow through on it.

Ms K Thanaletchimi and Mr Murali Pillai asked how we can help seniors who are cognitively impaired, for instance, with dementia, benefit from CareShield Life. I want to, first, clarify that those with cognitive impairments and are unable to perform three or more ADLs are already able to benefit from ElderShield today. Under today’s assessment framework, assessors are already supposed to take into account how cognitive impairments impact the policyholder’s ability to perform the ADLs.

Many policyholders with severe dementia are already able to make ElderShield claims today. One policyholder who benefited from ElderShield is 77-year-old Mdm Leong. Mdm Leong has late-stage dementia which impacts her ability to perform ADLs independently. Although Mdm Leong is physically able to eat and walk, she is unable to recall the way to specific places, such as the toilet, or express her needs. Mdm Leong has been able to receive ElderShield payouts for the last two years, which have helped the family with the costs of medicine.

Nevertheless, the Committee heard feedback that it is not clear how ElderShield assessors should take into account the impact of an individual’s cognitive impairment on his ability to physically perform the ADLs. This can lead to inconsistent claim outcomes for ElderShield policyholders with cognitive impairments.

We, therefore, accept the Committee’s recommendations to improve the disability assessment framework to provide clear guidance for disability assessors to consider policyholders’ ability to initiate a task, plan and, finally, complete an ADL effectively and safely. For instance, in the current assessment framework, the assessor may only evaluate solely whether a policyholder with severe dementia can execute the physical actions, such as threading their arms through sleeves. With the improvement to the assessment framework, assessors may also evaluate their ability to do so without being prompted to. This ensures cognitively impaired policyholders with higher care needs will more consistently qualify for claims.

Mr Deputy Speaker, to conclude, let me affirm the Government’s commitment to invest in a strong aged-care system anchored by home and community care as well as communities of care supported by fellow Singaporeans. CareShield Life, MediSave withdrawals for long-term care and ElderFund complement our efforts to build an inclusive and caring home for all of us as we age. Mr Deputy Speaker, I support the Motion.

Mr Deputy Speaker, let me, first, thank Members for supporting the Motion and for their views and suggestions. I would also want to join Members in expressing my appreciation to the ESRC led by Mr Chaly Mah, and the Secretariat Team from MOH.

The Committee’s recommendations on the new CareShield Life scheme are significant measures to enhance Singapore’s long-term care financing and provide a stronger social safety net with our ageing population.

Through risk-pooling, CareShield Life will enhance the role of insurance in helping Singaporeans meet our long-term care needs. It will add to the other sources of funding for long-term care, including Government subsidies, personal savings and family support, and financial assistance for the lower-income.

I will touch on a few issues in my speech: first, how the features of CareShield Life provide better protection and greater assurance for Singaporeans; second, how the scheme is designed to meet basic long-term care needs while remaining affordable; third, what are the support measures for existing cohorts to join CareShield Life; fourth, how the scheme can remain sustainable for the longer term; and finally, the Government’s plans to explain the scheme and raise public awareness.

Let me start with “Better Protection and Greater Assurance”.

ESRC had engaged a large group of Singaporeans over the course of its work and received many useful feedback and suggestions.

The Committee had to decide which enhancements are most important and how to balance the improvements in benefits with the need to keep premiums affordable. If the benefits are not adequate, the scheme would not provide sufficient protection. On the other hand, if the benefits are very generous, premiums may become too high. We need to strike a balance, as Mr Christopher de Souza had eloquently explained.

We agree with the Committee that CareShield Life payouts should be provided for life, to give policyholders and their family better peace of mind. This is an improvement over the current five- or six-year payout duration for ElderShield.

We also agree with the Committee’s recommendation to raise starting payouts from $400 to $600 per month, an increase of 50%. In addition, CareShield Life payouts will increase gradually over time to keep pace with inflation. These features will offer better protection for policyholders, compared to ElderShield, which pays a flat rate of $300 or $400 per month.

If we assume that payouts increase by 2% per year, a 30-year-old who joins CareShield Life in 2020 will receive a payout amount of $1,200 per month if he becomes severely disabled at age 67 or older, if we assume 2% increase per annum. This is three times the current amount of payouts under ElderShield 400. And there is no payout duration cap. This policyholder will receive monthly payouts of $1,200 for life if he remains severely disabled, until he passes away.

Next, I will explain how CareShield Life is designed to meet basic long-term care needs while remaining affordable. Dr Lily Neo, Er Dr Lee Bee Wah, Mr Melvin Yong and Mr Christopher de Souza asked whether $600 per month will be enough, and if payout increases can continue for life even after a claim has been made. Several Members also asked whether the criterion can be relaxed so that those who are unable to perform at least two ADLs could receive payouts.

We understand the rationale for these suggestions, which is to provide more benefits to policyholders.

The Committee has also discussed these ideas and carefully considered the tradeoffs of further increasing the payout amount and lowering the claims criterion, versus the need to keep premiums affordable in a universal insurance scheme that caters to a broad segment of Singaporeans.

To illustrate, if we raise the payout amount from $600 to $800 per month, premiums for a 30-year-old male in 2020 could increase by about one-third. If we further lower the claims criteria from three to two ADLs, premiums will further increase by another one-third. So, as a result, if we combine both changes, the annual starting premium could be more than two-thirds higher than the currently proposed premium of $206 per year. If we allow the payout amount to continue increasing for life after a claim is made, premiums would have to increase further, possibly by another one-third.

Mr Zainal Sapari and Ms Joan Pereira also asked if premium discounts could be given to ElderShield or CareShield Life policyholders who do not make claims, to incentivise healthy living. Let me explain why this is not feasible in the prefunded scheme like ElderShield and CareShield Life.

ElderShield and CareShield Life, being prefunded schemes, policyholders would pay premiums when they are young and receive coverage for life. Hence, one can only confirm that a policyholder is not claiming from the scheme after the policyholder has passed away. In computing the premiums, the actuaries have included the probability that some policyholders will not claim from the scheme because they do not become severely disabled. In other words, this has already been incorporated in the premium quantum.

In view of the tradeoffs, the Committee recommended that CareShield Life focuses on supporting basic long-term care needs so that premiums can be kept affordable for all groups of policyholders.

Dr Lily Neo and Ms Joan Pereira asked if Singaporeans who wish to have more benefits, such as coverage for less severe disability or higher payouts, and are willing to pay higher premiums, will they be able to purchase additional coverage from private insurers. That is, indeed, the plan.

Currently, ElderShield policyholders can use up to $600 per year from their MediSave to pay for ElderShield Supplement premiums. MOH will work with private insurers to adapt the design of their Supplements to complement CareShield Life and continue to allow policyholders to use MediSave to pay for these Supplements.

It is also important to remember that CareShield Life payouts are not the only source of long-term care financing. They will complement other financing sources, such as Government subsidies and assistance schemes, personal savings and family support.

Singaporeans with mild or moderate disabilities and who need long-term care can tap on means-tested Government subsidies for nursing home, community care and homecare. There are also other Government schemes, such as the Seniors’ Mobility and Enabling Fund, PG Disability Assistance Scheme and the Foreign Domestic Worker Grant.

Let me illustrate with an example to show how the different schemes come together to support Singaporean families.

If the fee for nursing home care is about $2,400 per month, a lower middle-income Singaporean can receive Government subsidies of about $1,400, which reduces his fee to around $1,000 per month. But if he receives $600 per month from CareShield Life and utilises $200 from his MediSave account under the new MediSave withdrawal scheme, he and his family would need to pay around $200 per month from their savings. Through the package of different measures, a nursing home bill of originally $2,400 reduces to $200 of out-of-pocket expenses, or less than 10% of the original nursing home fee.

If this person chooses home and day care services under the Integrated Home and Day Care pilot programme, he can reduce his out-of-pocket expenses to almost zero through a combination of Government subsidies, CareShield Life payouts and MediSave withdrawals.

Mr Deputy Speaker, we recognise that there are Singaporeans who may need more financial assistance, for example, those who have little savings and those with low MediSave balances.

And that is why we have introduced the new ElderFund scheme, to provide further protection for these vulnerable groups of Singaporeans for their long-term care needs. ElderFund will add to the protection offered under existing assistance schemes like MediFund and ComCare.

Mr Deputy Speaker, I have explained how CareShield Life is designed to keep premiums affordable for policyholders. Mr Saktiandi Supaat and Mr Ang Wei Neng asked how the Government will further support Singaporeans, including the self-employed or unemployed, in paying their premiums.

As Minster Gan explained in his opening speech, the Government will provide means-tested subsidies of up to 30% for lower- and middle-income policyholders living in a property with an AV of $21,000 or less. Ms Jessica Tan and Mr Saktiandi Supaat asked why this AV threshold was used. This threshold covers about 80% of properties in Singapore, including all HDB flats and some private properties. We used a similar set of means-testing criteria for MediShield Life. And about two in three Singaporeans will be eligible for the subsidies.

Individuals who do not meet the means-testing criteria, but face genuine financial difficulties in paying their premiums, can apply for Additional Premium Support. Their application will be considered on a case-by-case basis. The budget for Additional Premium Support is fully funded by the Government. In addition, we will provide transitional subsides to all Singapore Citizens in the future cohorts for the first five years from scheme launch in 2020. This will help to further reduce the premium amounts for these policyholders.

Mr Melvin Yong asked why the transitional subsidies are provided only for the first five years. These subsidies aim to ease transition into CareShield Life for the immediate few future cohorts who will be joining the scheme from 2020. And these are the cohorts from age 30 to 40 in 2020 as well as those turning 30 between 2021 and 2024.

Compared to the subsequent cohorts who will join the scheme later, they have less time to prepare for the higher premiums under CareShield Life. The transitional subsidies are intended to cushion the impact for these few cohorts. The amount of subsidies will be gradually reduced over the five-year period.

CareShield Life is part of our social safety net and we will ensure that no Singaporean will lose coverage due to financial difficulties and inability to pay premiums.

I would like to assure the House that with these supporting measures, most Singaporeans in the future cohorts, including those from lower-income households, can cover their CareShield Life and MediShield Life premiums using their annual MediSave contributions. They do not need to make additional cash payouts.

Let me illustrate with an example. And, with your permission, Mr Deputy Speaker, may I display a slide?

Thank you, Sir. Here, we have a family where the husband and wife, Mr and Mrs Koh, are both aged 40 and each person is earning $2,200 per month. They have two children aged seven and 10.

So, in 2020, the couple’s CareShield Life premiums would be about $27 per month in total after means-tested subsidies and transitional subsidies, and their aggregate household MediShield Life premiums, including their children, add up to around $67 per month. For this family, the total premiums per month for both CareShield Life and MediShield Life is $94, which is less than a quarter of the couple’s combined MediSave contribution of almost $400 per month.

But as Ms Jessica Tan said, MediSave is also needed for other healthcare-related expenses and that is why we have to keep a balance between the benefits and the premium quantum for CareShield Life, while allowing policyholders to purchase Supplements if they wish to do so.

I will now move on to describe the support measures for existing cohorts to join CareShield Life. Senior Minister of State Amy Khor had earlier explained why we decided not to make CareShield Life mandatory for Singaporeans in the existing cohorts.

We do want to encourage as many Singaporeans as possible to join the scheme if they are not already severely disabled, so that more Singaporeans can pool our risks together and have better protection and greater peace of mind for everyone as we age.

Mr Zainal Sapari asked if the Government will support those who convert from ElderShield to CareShield Life. We will do so. The Government will offer participation incentives of up to $2,500 to reduce their premium and encourage participation in the scheme. We will also provide means-tested subsidies and Additional Premium Support under CareShield Life to policyholders from the existing cohort to ensure no one loses coverage due to financial difficulties.

Assoc Prof Daniel Goh asked about auto-enrolment. Sir, in 2021, CareShield Life will auto-enrol current ElderShield 400 policyholders born between 1970 and 1979 who are not severely disabled. These are the younger members of the existing cohorts who are currently on ElderShield 400. Compared to older members of the existing cohorts and those who are not on ElderShield 400, the quantum of their premiums to join CareShield Life will be lower.

The purpose of auto-enrolment is to make it more convenient for this group of Singaporeans to join CareShield Life, and policyholders will automatically receive the premium subsidies and participation incentives. They will be given at least two years, up to 31 December 2023, to opt out of CareShield Life if they do not wish to join the scheme. So, it remains optional for them. Auto-enrolment is to make it more convenient, but it remains optional for them.

Older members in existing cohorts who are born in 1969 or earlier, including those who have previously opted out of ElderShield, can also join CareShield Life if they are not already severely disabled. We will support them if they wish to join the scheme. And unlike ElderShield, there is no age limit to join CareShield Life. MOH will make a premium calculator available by the end of this year for existing cohorts to find out more details about their premiums.

We encourage Singaporeans who are interested to join CareShield Life to take their time to understand more about the scheme and how it can meet their long-term care needs before deciding. There is no hurry, as the sign-up period only starts in 2021 for existing cohorts.

Mr Deputy Speaker, let me now turn to how the CareShield Life scheme can remain sustainable for generations of Singaporeans to come.

Minister Gan had explained how long-term care insurance schemes like ElderShield and CareShield Life are prefunded to ensure long-term sustainability. In designing the scheme, we want to ensure that premiums paid by each generation during their working years can support their future claims when they grow old. This minimises intergenerational transfers, so that as our population ages and our families get smaller, claims made by the older generation can be met without having the younger generation shoulder a heavier financial burden. It is an important part of ensuring long-term sustainability, especially when we are facing an ageing society.

Ms Chia Yong Yong, Mr Zainal Sapari, Mr Ang Wei Neng and Ms Tin Pei Ling asked why $3.3 billion in premiums for ElderShield were collected, and only $133 million were paid out as claims. Mr Pritam Singh touched on this in his speech, too. Mr Leon Perera and Mr Png Eng Huat also asked how premiums are determined. Allow me to explain.

In prefunded insurance schemes like ElderShield and CareShield Life, premiums are collected when the policyholders are younger and working, so that the fund has enough resources to meet their future claims when they grow old and are no longer paying premiums. As Senior Minister of State Amy Khor mentioned earlier, the coverage is for life. It is, therefore, logical and necessary for the scheme to show a positive balance when policyholders are younger and are less likely to be severely disabled. This also answers Dr Lily Neo’s question on why the number of claimants is currently low.

ElderShield policyholders are still relatively young, with a median age of 52 in 2017. However, as policyholders grow older and more of them become severely disabled, the balance amount that we see today will be gradually used up to pay for claims. This balance amount is not profit, it is to meet future liabilities. If a prefunded scheme does not have a positive balance when its policyholders are younger, the scheme is actually in trouble. It means there will not be enough financial resources to meet future liabilities, and when policyholders grow older and more of them start to claim, the scheme will have difficulties making the payouts. The balance amounts for ElderShield that are currently with the three private insurers will be properly accounted for. We are working on this with the insurers.

Mr Pritam Singh asked about the statistics of one in two Singaporeans aged 65 and above who become severely disabled in their lifetimes. And this is based on a mix of local and international data sources. For example, in 2016, the US Department of Health and Human Services estimated that 52% Americans turning 65 in 2016 would develop a disability serious enough to require long-term care. It is important to remember that the premium calculations are based on a complex actuarial model with many factors, and not just on one number.

I do not intend to go through the technical details of the actuarial model in this House. But let me say that a premium pricing model was done by professional actuaries, in line with internationally-accepted industry standards. Some factors that they incorporated in their model include the disabled mortality rate, recovery rate, claims continuance rate, mortality rate, improvements to mortality rate, disability incidence, prevalence rate, as well as the risk profile for various cohorts.

In addition, premiums for the existing cohorts will need to take into account their circumstances, for example, some are on ElderShield 300, some are on ElderShield 400 and some are not insured at all. We will discuss with the council and the actuaries on how best to share information on the details and assumptions for CareShield Life meaningfully.

Mr Zainal Sapari asked about the considerations in having the Government administer CareShield Life instead of the private insurers.

Sir, the scheme will be administered by the Government on a not-for-profit basis, where all premiums collected and any returns from investments will remain entirely within the fund and used fully for the benefit of policyholders. I thank Mr Leon Perera for mentioning this point in his speech earlier. It also facilitates the provision of Government subsidies and financial support to Singaporeans and provides greater flexibility for the Government to make future enhancements to the scheme.

There will be no change in contractual terms for ElderShield policyholders who choose to remain on their existing ElderShield 300 or 400 schemes. This also applies to their ElderShield supplements. ElderShield policyholders will be no worse off and will continue to be covered by these insurance schemes.

The Government will set up an independent council by legislation, comprising people with various expertise and background. We agree with Ms Joan Pereira that the council should consider views from social workers, healthcare professionals and insurance experts. The council will regularly review and recommend changes in premiums and payouts, guided by professional advice from independent actuaries, and decide on the optimal investment strategy of the fund. The council’s recommendations will be made public.

AIC, which has experience in implementing disability schemes, will work with CPF Board, which has experience in managing insurance schemes, to administer CareShield Life. CPF Board will also be the administrator of the CareShield Life Fund and will ensure that the funds are safeguarded for the benefit of policyholders. The annual financial statements will be made publicly available.

Dr Chia Shi-Lu and Mr Ang Wei Neng asked how premiums and payouts will be adjusted. We envision the adjustment framework to work like this: if claims are lower than the amount assumed in the actuarial modelling and calculations, the CareShield Life council could recommend higher payout increases or provide policyholders with premium rebates in subsequent years. Conversely, if claims are higher than what was originally assumed in the actuarial modelling and calculations, the council could recommend raising premiums or slowing down payout increases to ensure the scheme remains sustainable.

Sir, I would like to clarify that it is not what Mr Png Eng Huat had said earlier, that CareShield Life premiums will be increased to pay for losses due to risky investments. That will not be the case. The Government will invest the funds prudently to earn stable returns. But what is not possible to predict with full accuracy are factors, such as the frequency and duration of claims.

Mr Deputy Speaker, we have a responsibility to design CareShield Life so that it remains sustainable for generations to come. Singaporeans who join the scheme now and start to contribute in their working years must have assurance that should they become severely disabled when they are old, there will be enough funds to draw upon for their long-term care needs. In addition, we want to ensure that future generations will not be burdened with the cost of financing our long-term care needs when we grow old.

Over the past week, since we announced further details on CareShield Life, we have heard feedback that the scheme can be rather complicated, and many Singaporeans find it challenging to understand all the details. This feedback has also been raised by several Members today. We agree with the feedback. There is still some time before CareShield Life takes effect in 2020 for future cohorts, and 2021 for existing cohorts. We will use this period to reach out to different groups of Singaporeans and explain to everyone the details of the scheme and how it can meet their long-term care needs.

We will intensify our public education efforts on the risks of severe disability in old age, and what are the available long-term care financing sources that can complement CareShield Life to support the long-term care needs of Singaporeans. These include Government subsidies for nursing home, community care and home care services, assistance schemes like ElderFund, as well as the use of personal savings like MediSave withdrawals for long-term care. MOH will step up our outreach and engagement efforts through mainstream and social media. We will also partner the grassroots, Silver Generation ambassadors, youth and union leaders, financial advisors, and other Government agencies, such as the People’s Association (PA), CPF Board and the Monetary Authority of Singapore. Mr Deputy Speaker, in Mandarin please.

(In Mandarin): [Please refer to Vernacular Speech.] CareShield Life will provide Singaporeans with better protection for their basic long-term care needs. Under this scheme, monthly payouts will start at $600 in 2020 and increase over time. Upon becoming severely disabled, policyholders will be able to receive lifetime payouts, to support their long-term care cost, until recovery or death.

There are various long-term care financing sources, such as Government subsidies and assistance schemes, personal and family savings and community support. The payouts under CareShield Life will complement these financing sources to support Singaporeans with their basic long-term care needs.

The Government will also provide support to help policyholders with their CareShield Life premiums. The Government will provide means-tested subsidies of up to 30% for lower- and middle-income policyholders. Additional premium support will also be available to Singaporeans who cannot afford their premiums even after the subsidies. For Singapore Citizens born in 1980 or later, the Government will also provide transitional subsidies of up to $250 for the first five years from the launch of the scheme. For those born in 1979 or earlier and who are not already severely disabled, they can opt to join the scheme in 2021. The Government will provide Singapore Citizens with participation incentives of up to $2,500 if they join within the first two years.

We will make sure that all Singaporeans who join CareShield Life will not lose coverage due to inability to afford premiums.

Singaporeans can also tap on two new schemes to support their long-term care cost. From 2020, severely disabled Singaporeans who are aged 30 and above can withdraw up to $2,400 every year from their own or their spouses' MediSave. The Government is also setting up a new ElderFund scheme to provide up to $250 per month for low-income citizens with severe disabilities.

As our society ages, CareShield Life and other related schemes will strengthen our social safety net. These will provide Singaporeans with better protection and greater peace of mind for our long-term care needs when we grow old.

(In English): The introduction of CareShield Life will provide better protection and assurance for Singaporeans. All future cohorts of Singaporeans will have sustainable, basic protection for their long-term care needs through CareShield Life. This includes vulnerable groups like low-income families and those who are already severely disabled. Through a universal risk-pooling scheme like CareShield Life, we can offer coverage for everyone in the future cohorts.

We also want to encourage Singaporeans from the existing cohorts to join the scheme. Under CareShield Life, the Government will provide Singaporeans with premium subsidies and financial support so that no one will lose coverage if they face financial difficulties and are unable to pay their premiums. For those who are not able to join CareShield Life, the Government will help them through other schemes, such as the MediSave withdrawal for long-term care and ElderFund.

As our society grows older, some of us will become severely disabled and require long-term care. We have to take steps to prepare for this ahead of time when we are still young and healthy. This is what we want to achieve with long-term care insurance schemes like CareShield Life.

Together with Government subsidies, personal savings and family support, CareShield Life will further strengthen our social safety net and provide Singaporeans with better protection and greater assurance when we grow old. Mr Deputy Speaker, I support the Motion.

Mr Deputy Speaker, many Members have spoken about CareShield Life, and I would like to thank all of them for their contributions.

Young Singaporeans typically think about long-term care as something that is not important and not on their radar scan. In fact, many of them regard such issues as issues for the old. That is why it is important for us to address this issue now. Very often, we only realise how important these issues are when we have to take care of someone who is severely disabled – our family members. As Dr Chia Shi-Lu’s grandmother’s experience has shown, often, this happens very suddenly, and we are not prepared for it because we never planned for this. Therefore, today, I am happy that we have this opportunity in this House to talk about CareShield Life. I am encouraged that Members of this House have voiced support for the introduction of CareShield Life to provide better protection and greater assurance, compared to the current ElderShield.

Members have also made very thoughtful remarks and suggestions and shared concerns which Singaporeans might have. Some of these relate to the design of the scheme: whom it should cover; its benefits, features; and how it will be managed. These were questions that are important. There were also questions about the affordability, and concerns about how Singaporeans without CareShield Life, or those who need additional help, can be supported.

Senior Ministers of State Amy Khor and Chee Hong Tat have addressed most of the concerns and questions raised. Allow me now to sum up the debate on long-term care and CareShield Life.

First, CareShield Life will be an inclusive scheme. It will be more than just an insurance scheme, but a key pillar of our social safety net. This is why we are introducing universal coverage for future cohorts – Singaporeans born in 1980 or later – so that the scheme will cover all future generations, including those with pre-existing severe disabilities, as well as those who are low-income who need it the most as they will receive premium support.

We have explained why it is not possible to make it mandatory for all Singaporeans in the existing cohorts – those born in 1979 or earlier – to join CareShield Life. We will, however, encourage them to do so, with participation incentives. In line with our inclusive principle, those with pre-existing conditions but are not severely disabled will also be allowed to join the scheme.

On affordability, some Members of the House have raised concerns about what will happen if there are people who may not be able to afford their premiums. These include the self-employed, housewives and the low-income. I would like to assure Members of the House that no one who joins CareShield Life will lose their coverage due to inability to pay premiums.

The Government will provide means-tested premium subsidies for the low- to middle-income Singaporeans as a permanent feature of the scheme. And for those who still are unable to afford their premiums after these subsidies and family support, we will extend Additional Premium Support to them. In other words, the financially needy will receive additional support from the Government on their premiums.

Making sure that CareShield Life premiums remain affordable also requires a delicate balance between better benefits and their impact on premiums. I thank Members of the House for their various suggestions on how CareShield Life features could be enhanced, such as higher payouts, or allow claims for less severe disabilities. While these suggestions are well-intended, we have to balance these enhancements against premium affordability as they will lead to higher premiums. We also should bear in mind that insurance payouts are not the only source of long-term care funding. Personal and family savings, other Government subsidies and safety nets and community support also play a role.

This is the reason why the ESRC recommended that CareShield Life should provide a basic level of protection for Singaporeans. Those who prefer additional insurance cover have the option to buy Supplements from private insurers using their MediSave savings, according to their individual preferences and financial resources.

That said, ensuring that CareShield Life remains affordable is just one part of the larger picture. I agree with Dr Chia Shi-Lu, Mr Christopher de Souza and Mr Chen Show Mao that we do need to pay attention to maintaining and managing long-term care costs. We will continue to do our best to work with all our stakeholders to better manage our long-term care cost, but all of us will also have a role to play to stay healthy and prevent ourselves from falling into disability.

Third, let me emphasise that CareShield Life, being a vital part of our future social safety net, must be sustainable for generations to come.

To ensure long-term sustainability, each cohort will fund its own future needs through prefunding. The scheme is not intended for younger generations to cross-subsidise the older generations. Other countries have found such pay-as-you-go systems difficult to sustain.

To be sustainable, premiums must also be priced according to sound actuarial principles. To ensure this, an independent Council will be established through legislation to advise the Government on premium and payout adjustments.

I would also like to emphasise again that the Government will administer CareShield Life on a not-for-profit basis. All premiums collected will go into the CareShield Life Fund of policyholders. In the real-life claims, if experience turns out better than expected, the savings will form part of the Fund and policyholders will benefit from it through premium rebates, slower premium growth or better payouts.

Mr Deputy Speaker, CareShield Life is designed to be an inclusive, affordable and sustainable insurance scheme and a key pillar of our social safety net. It will work hand in hand with personal and family savings, and Government and community support to help our future generations of Singaporeans afford long-term care. We know, however, that some among our existing cohorts may not join CareShield Life. Others may need additional support beyond CareShield Life, and this is why we have decided to enhance our long-term care financing system in two other ways.

MediSave will be allowed to be withdrawn in cash to support long-term care. Because the payout is in cash, it provides flexibility, whether one is cared for informally at home or formally through a provider or residential facility. We will set up ElderFund, an additional Government-funded safety net for low-income Singaporeans who are severely disabled and are in need of support. Together, the three initiatives – CareShield Life, use of MediSave for long-term care, and ElderFund – form a comprehensive package of measures that will significantly strengthen our long-term care financing.

I agree with many Members that CareShield Life and the other two long-term care enhancements are not easy for Singaporeans to understand. We will initiate more communications and engagement efforts to explain the schemes to Singaporeans and how they can tap on them to support their long-term care needs. I hope that, through this debate and our outreach efforts, Singaporeans will be more aware about their long-term care needs and start to think about their long-term care needs and to plan for them. I hope that we will all have good health and stay active and free from disability. But should disability strike, we can have peace of mind that their long-term care needs are well supported.

On that note, let me urge Members of this House to support the Motion, and give our fellow Singaporeans better protection and better assurance through CareShield Life.

Indeed, as I have said, it is not an easy decision to make for the ESRC and, obviously, for us. So, when we made our decision, it must be on the principle that the scheme will be sustainable in the long term. I think that it is very important to ensure that the scheme is sustainable.

So, let me explain. At the start of the scheme – when we implement it – CareShield Life is mandatory for future cohorts, but for existing cohorts, based on the various reasons that I have provided, the decision was that it will not be mandatory, but we would want to encourage as many as possible to come on the scheme. So, at the start of the scheme in 2020, for instance, in the first few years, the existing cohort is definitely much larger than the mandatory cohort. There is a potential for up to two million policyholders to be in the CareShield Life scheme for the existing cohort whereas, for the mandatory cohort, for the first 11 batches, the estimate is about 600,000. So, if we do not determine the premiums on an actuarially correct basis, what it means is that there is likely to be some adverse selection.

Currently, ElderShield premiums are already gender-differentiated. So, the men actually pay less than women for the same age group and income level. And if we equalise the CareShield Life premiums, they would know that they are paying more than what is actuarially determined. So, some may feel that they would not want to join the scheme and there would be dropouts.

In addition, private insurers may also offer lower premiums for men based on gender differentiation, and that would mean that more would opt out of the CareShield Life scheme and, at the end of the day, it could be unsustainable. So, I think what we want to do is to make sure that it is actuarially correctly determined. We note the issue about women having less savings, MediSave and so on. We think that it is prudent to determine the premiums correctly and then look at different ways to help the women.

First of all, our means-tested premium subsidies actually already provide a higher quantum of subsidies for women because it is based on a percentage of premiums payable. In addition, at the end of the day, anyone who is not able to pay for their premiums if they opt in to CareShield Life or they are in the mandatory cohort, the Government will assist with Additional Premium Support. So, no one would lose coverage because of financial difficulties.

In addition to that, of course, actually, for women, because they are more likely to become severely disabled as a result of longer lifespan, it means that, as I said earlier, those who claim are likely to claim for a longer period, too.

In MediShield Life, for instance, women actually pay premiums, on average, for a longer period because they have a longer lifespan. Of course, then they are covered over their longer lifespan.

Regarding the other point, sorry, what was it that the Member was asking me? Can the Member remind me again?