No Respite from Rising Medical Costs

by singaporearmchaircritic

Before Budget 2013 was announced, many of us would have learned about the spike in our health insurance premiums either through the media or the letter from CPF.

Come March, Medishield premiums and integrated shield plan premiums will see a hefty increase. Because the Medisave withdrawal limit for each premium is up to $800 per insured person per policy year, any sum above $800 would have to be paid out-of-pocket.


If you are a Singaporean, you would be familiar with the saying that one can die but cannot fall sick in Singapore. Some of us might have said it in jest and our foreign friends might think it was an exaggeration.

Yet increasingly, high medical costs in Singapore is making this more of a painful reality than a joke. According to the Mindshare survey 2012, 72% of Singaporeans believe that “we cannot afford to get sick these days due to high medical costs.”

Has the Budget 2013 addressed this very real concern of Singaporeans?

In DPM’s budget announcement, he said the government would look into lowering Singaporeans’ out-of-pocket health spending (report).

Singaporeans’ out-of-pocket medical spending is the highest among the East Asian developed economies. Fifty-four percent of our total health expenditure is paid out-of-pocket, compared to around 30-35% in Hong Kong, Taiwan and South Korea. Citizens of the Nordics pay less than 20% of their medical expenses out-of-pocket.

Our public health expenditure as a percentage of GDP is also the lowest among these economies  (see Figures below).

chart1_NEW(Data sources: WHO Data Observatory, Taiwan & Hong Kong). Note that Medisave is not counted as out-of-pocket spending in the Singapore figure.

chart2_NEW(Data sources: World Bank & others). Note that private health expenditure in this chart includes out-of-pocket expenditure borne by individuals.

Although DPM said that the government will “study” how it may broaden the usage of Medisave and Medifund, the Budget statement provides no further detail.

Instead, the key initiative drawn up in the Budget is to channel more money to three funds: the Medifund, the Eldercare Fund, and the Senior’s Mobility and Enabling Fund. The government top-ups amount to $1 billion, $250 million and $40 million respectively.

Before you applaud these seemingly generous injections of capital, do know that only the interest income from these funds may be used.

Elderfund subsidized the operating costs of nursing homes run by voluntary welfare organizations; Medifund is only for those who cannot afford to pay the charges at restructured hospitals even with Medisave and Medishield.

To be eligible for the Senior Mobility and Enabling Fund, you must be a senior citizen with a per capita household monthly income of $1,500 and below, or live in a residence with an annual value (estimated rental value) of not more than $13,000 if your household has no income.

Given the stringent eligibility conditions, how may these initiatives benefit most Singaporeans and reduce the medical expenses we pay out-of-pocket?

Singaporeans have every reason to be skeptical.

Despite repeated calls by experts and ordinary Singaporeans to reform the use of Medisave, the government is slow and reluctant to lift the restrictions, leaving us to fork out what little cash we have to pay for our medical expenses.

As recently as in late January, the Health Minister had dismissed Lee Li Lian’s suggestion to lift Medisave restrictions for senior citizens above 75 years old, saying that “elderly Singaporeans may face greater financial difficulties down the road if they are allowed to use up their Medisave fund without restrictions” (source).

This sort of preposterous argument, coming from the Health Minister himself, only goes to confirm our suspicion that the government couldn’t care less about our wellbeing.

Fine then. Many Singaporeans also couldn’t care less about the government’s promise to take up a larger portion of medical costs.

Just give us the right to use our own Medisave money for essential healthcare needs.

As this reader asks in a letter to Today:

“What is the purpose of having so much in Medisave while having to pay for high medical expenses out of pocket? What is the purpose of getting citizens to top up their parents’ Medisave accounts?”