CareShield Life

Mr Deputy Speaker, just a quick question for Senior Minister of State Amy Khor. Picking up from what she mentioned about loved ones topping up their spouses' MediSave, there is a point I raised in my speech about the prospect of the Government providing a tax relief like it does for Special Account, whether it could consider something similar for MediSave accounts, particularly in the gig economy, with contract work. I think that was a point Ms Jessica Tan raised as well.

Yes, I think for top-ups, there are already some tax incentives, but it is accrued to the recipients. But we note the Member's point.

Just a quick question. I think with all these moves in the ITLC financing sector, are there any considerations whether this might impact the MediSave contribution rate or the basic healthcare sum?

Mr Deputy Speaker, I want to highlight that we have done the calculations. As I had shared in my earlier example in the speech, for the future cohorts of Singaporeans, the premiums that they have to pay using the MediSave for both schemes like CareShield Life as well as MediShield Life should be enough to pay for the premiums without them having to fork out cash. But, of course, we know every situation is different. There will be individuals who will need more help and that is why we have other support schemes that they can apply for, including Additional Premium Support.

This is for Minister Gan. This is on the point where the scheme allows members to withdraw cash from their MediSave account to support their long-term care needs. Is this scheme parked under CareShield Life? That means that a person must be certified to need long-term care, then only he/she can apply to withdraw cash from his/her MediSave? Or is this parked outside? That means, anyone who needs long-term care can apply, and who will certify that the person needs long-term care? The second question is: can that person use his/her family members' MediSave as well?

Sir, the cash withdrawal under MediSave is not part of CareShield Life. So, you do not have to be participating in CareShield Life in order to tap on the MediSave withdrawal for cash for long-term care. If you are on ElderShield or if you are not covered, it is available to anyone above the age of 30 who is suffering from severe disability, that means, you still need to be eligible as three ADLs. And in addition to CareShield Life, if you have CareShield Life. If not, ElderShield. If not, MediSave – you can tap on it.

So, it is restricted to those who have three ADLs. The reason is because we want to ensure that there is sufficient balance in your MediSave. And, therefore, the use of cash from MediSave has to be regulated by that criterion. And assessment for eligibility in terms of severe disability is the same assessment as CareShield Life or ElderShield.

There was one more question about family members. Just to clarify that I mentioned in my speech that you are allowed to tap on the MediSave account of your spouse but not your other family members. Part of the reason is also we want to minimise intergenerational transfer. So, between you and your spouse, we allow you to share your balances.

Sir, I would like to thank the Minister and the two Senior Ministers of State for their explanations. I just have three supplementary questions for Senior Minister of State Chee Hong Tat.

Firstly, I think Senior Minister of State Chee Hong Tat, that the Committee will decide on how best to release information about the actuarial model to the public. I would just like to ask again if the Government will consider publishing the actuarial model in full, including details, such as the assumed medical loss ratio, the expected rate of payouts in the future, the capital adequacy ratio and so on, for the reason that such transparency may actually be more effective to get public buy-in and may actually interest more people to voluntarily come into the scheme if they are not mandated to do so because, from that disclosure, they will be able to see it is, in fact, a fair and a good scheme, presumably. So, that is the first supplementary question.

The second one is, I believe the position is that the independent Council will have the discretion to decide on premium rebates. For ElderShield, I think there are some guidance given to the three insurers about when they give up premium rebates, and how much. So, will the Government consider instituting some guidelines that will be binding on the independent Council to guide them on how to give out premium rebates, when and to what extent? I think this point was made by some other Members as well.

And the last one is really in terms of the way the funds will be managed. If this is going to be managed by CPF Board, will the funds be managed in the same way as the CPF monies where I believe the Government of Singapore Investment Corporation plays some role in managing CPF monies through the instrument of Singapore Government securities?

Sir, I thank Mr Perera for his supplementary questions. His first question about the disclosure of information by the Council on the model and their assumptions, I think I have explained that in my speech that there are many factors and we will discuss with the Council and the actuaries on how best to share the information, the details and assumptions of CareShield Life in a meaningful way.

And I think it is important to discuss with the experts because it is a technically very complicated complex scheme. For example, I think loss ratio, for example, is not quite applicable for a scheme that is prefunded. Loss ratios are actually more applicable to schemes like MediShield Life where it is year by year. So, you can look at what the total amount of claims versus the premiums that you have collected – claims plus expenses – versus the amount of claims you have collected. So, that is more applicable for a scheme like MedisShield Life where you collect premiums in one year to provide coverage for that year.

But for prefunded schemes like ElderShield and CareShield Life, actually, loss ratio does not quite apply. So, I just wanted to give this as an example to say that this is highly complex and, therefore, we will discuss with the Council and the actuaries on what is the best way to share the information in a meaningful manner.

On the second question that Mr Perera raised about premium rebates, again, allow me to clarify. There is a difference between CareShield Life and the previous scheme, ElderShield, because ElderShield, first, is administered by private insurers and they are social entities. So, embedded in their calculations, there will be a profit element. And this safeguard, in a way, is to prevent them, if there are additional surpluses, that they will take the entire amount. So, this formula of saying, we share – 50% goes to the insurer, 50% goes back to the policyholders through a rebate – you need to specify it upfront because, otherwise, the insurer would not subsequently agree to give it back to policyholders if you do not spell it out clearly.

But for CareShield Life, it is different because the Government is going to administer it. All the returns, all the additional balance amounts will stay within the fund for the benefit of policyholders, that it is not for profit, there will be no disbursement out of the fund. So, that is one key difference.

The second key difference is that the current ElderShield scheme, the payout is fixed. So, there is no way to return something to policyholders, except through a rebate. But for CareShield Life, because the payouts are designed to gradually increase over time, you can actually have more parameters that you can use to return some of these, if you have some additional balance amounts that you return it to policyholders, you want to benefit policyholders, there are ways to do it. So, we are not ruling out rebates. That is one way. But another way will be to give them a higher payout or reduce the premium increases associated with the higher payouts.

And the last question that Mr Leon Perera raised about CPF investments, we will discuss with CPF Board on what is the approach that they will use. But certainly, the nature of the fund is such that you want to go for stable returns. So, this is an important consideration for long-term sustainability.