Factors beyond Annual Value of Home in Assessing Medical Subsidies for Retirees

Mr Christopher de Souza asked the Minister for Health whether medical subsidies for retirees can be based on a broader set of factors beyond the annual value of their home to take into account retirees who have owned landed property for many years but do not have much savings.

Healthcare subsidies are generally means-tested using per capita household income (PCHI) and annual value (AV) of residence to ensure that subsidies are targeted at those who need it more. AV, in particular, is a good proxy reflecting the financial situation of the applicant, but it is not a perfect proxy as it excludes those who are asset rich and cash poor, but for various reasons, are unable to monetise their assets. However, if we conversely disregard AV when determining the appropriate level of subsidies, wealthy retirees living in a high AV residence (such as landed property) would receive higher subsidies than low-income families in residences with a lower AV (such as a two-room flat). As such, while neither PCHI nor AV are perfect measures, collectively they are the best available proxies to measure an individual’s means and access to family support.

To support retirees who are asset rich but cash poor, the Government provides additional non-means-tested support under other schemes. For instance, seniors aged 65 years and above receive higher subsidies of 75% at polyclinics, regardless of means. Pioneer Generation and Merdeka Generation seniors also receive additional benefits regardless of PCHI or the AV of their residence, such as subsidies for MediShield Life premiums, MediSave top-ups and higher subsidies for outpatient care.

Individuals who face difficulties in paying for their healthcare expenses after subsidies, MediShield Life and MediSave may apply for discretionary financial assistance such as MediFund at public healthcare institutions, where a broader set of factors beyond PCHI and AV would be taken into account.