Govt commits S$4b to premium subsidies

SINGAPORE — To ensure all Singaporeans will be able to afford their MediShield premiums next year, the Government will be committing close to S$4 billion over the next five years to premium subsidies and other forms of support.

This will include transitional subsidies for the first four years to ease the shift from MediShield to MediShield Life, estimated to cost S$830 million.

About S$430 million per year will be spent on the three main permanent features of MediShield Life, namely premium subsidies, Pioneer Generation subsidies and additional premium support. To ensure universal coverage for all citizens, the Government will also spend about S$850 million over five years to bring those with pre-existing conditions into the scheme.

Covering lower- to middle-income households, premium subsidies will be tiered according to age and income levels. Lower-middle-income individuals aged below 40 and with a monthly per capita household income between S$1,101 and S$1,800 can expect a 20 per cent subsidy on their premiums. Lower-income residents aged between 61 and 75 will get higher subsidies of 35 per cent. Permanent residents (PRs) will be eligible for only half of these premium subsidies.

Pioneers will enjoy special premium subsidies of between 40 and 60 per cent, with additional Medisave top-ups of up to S$800, which can be used to pay for premiums. While all pioneers will pay less for MediShield Life premiums than what they are currently paying, pioneers aged 80 and above this year will have their premiums fully covered after premium subsidies and Medisave top-ups.

The transitional subsidies will be scaled down in phases. Starting from the first year in 2015, the Government will subsidise 80 per cent of the increase in premiums after taking into account any premium subsidies a person is eligible for. Subsequently, the transitional subsidy will be scaled down to 60, 40 and 20 per cent over the next three years.

With premium subsidies and first-year transitional subsidies in 2015, the maximum premium increase will be less than S$3 per month for the lower income and no more than S$6 per month for the higher income.

For those aged between 31 and 40 in the lower-middle-income group, premiums will increase from their current S$9 per month to S$11, while lower-income Singaporeans between 51 and 60 will see a rise from S$29 to S$30.

Even after the transitional subsidies end in 2019, the MediShield Life Review Committee said premiums for most households will still remain within Medisave contributions.

Additional premium support on a case-by-case basis will also be given to the needy.

Speaking at a press conference, MediShield Life Review Committee chairman Bobby Chin said: “If you truly cannot afford, the Government will support, just like Medifund. And therefore something similar will be committed by the Government. They have given the assurance that no Singaporean will be left out.”