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Women will pay higher CareShield Life premiums as they will draw on claims longer with longer life span: Amy Khor

SINGAPORE — Several Members of Parliament (MPs) raised concerns about women having to pay higher premiums under the new CareShield Life insurance scheme, and questioned if this could potentially "doubly penalise" women considering that they have lower pay than men and less savings in their Medisave accounts under the national Central Provident Fund (CPF).

SINGAPORE — Several Members of Parliament (MPs) raised concerns about women having to pay higher premiums under the new CareShield Life insurance scheme, and questioned if this could potentially "doubly penalise" women considering that they have lower pay than men and less savings in their Medisave accounts under the national Central Provident Fund (CPF).

The new national insurance scheme for basic long-term care was the focus in Parliament on Tuesday (July 10), and Dr Amy Khor, Senior Minister of State for Health, told the House that applying gender-differentiated premiums would "more accurately reflect the differences in risks between men and women", and it would make the scheme equitable, sustainable and "actuarially fair" — in insurance terms, this would mean that the premiums paid are equal to the expected value of the compensation received.

She also said that the review committee for the new scheme debated on the gender-differentiated premiums "extensively", and it was not an easy decision to make, even for herself and her other colleagues at the Health Ministry.

Come 2020, it will be compulsory for Singaporeans and permanent residents born between 1980 and 1990 to take up the CareShield Life scheme. Those born after 1990 will be enrolled when they turn 30. Policyholders will pay annual premiums until they are 67 (subject to change), and they will get lifetime cash payouts when they claim for severe disabilities. This is when they are certified to be unable to independently perform three out of six activities of daily living, namely, eating, bathing, dressing, transferring (from a chair to bed, for instance), going to the toilet, and walking or moving around.

Male policyholders aged 30 will pay S$206 in premium before subsidies, while the amount for female policyholders aged 30 will be S$253. The premiums will go up by 2 per cent every year for the first five years, and will be adjusted as needed after that. CPF members may use Medisave to pay the premiums.

CareShield Life will give claimants higher and lifetime payouts of S$600 a month, which increases over time — compared with the S$300 to S$400 payouts by ElderShield for up to five or six years.


Dr Khor explained that women are charged higher premiums with CareShield Life because they live longer than men. She told the House that last year, the average life expectancy at birth for women is 85.2 years, compared with 80.7 years for men.

Earlier, Health Minister Gan Kim Yong also said in Parliament that one in two Singaporeans at the age of 65 are expected to become severely disabled by the end of their lives.

Dr Khor said: "Breaking this down by gender… three in five healthy women at age 65 are expected to become severely disabled by the end of their lives, compared with two in five healthy men at age 65."

Not only that, women are more likely to remain in disability for a longer period than men in older ages. "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 activities of daily living compared with 2.6 years for men aged 60.1," she said, adding that therefore, the women will draw on CareShield for a longer period should they become severely disabled.


During the parliamentary debate, Dr Chia Shi-Lu, who heads the Government Parliamentary Committee for Health, called for the gender differentiation to be removed, in line with other medical and hospitalisation insurance schemes, for instance.

"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," he said.

Tanjong Pagar GRC MP Melvin Yong pointed out that there are fewer women in the labour force, and they are generally paid less: "Statistics show that labour participation of women is lower than men, and on average, women earn less than men."

A study by consumer research firm Value Penguin released last year showed that men earn nearly 20 per cent more than women in Singapore, Mr Yong added.

Nominated MP K Thanaletchimi asked if the Government could consider the economic disparity in the gender wage gap, so that women are not "penalised" twice in having to pay for higher premiums, especially for those with lower income.

On this point, Dr Khor said that the Government will address the issue of affordability.


The premium subsidies for CareShield Life is means-tested, and women from the lower-and middle-income group will receive a "larger dollar quantum of government subsidies compared with the men in their age cohort with the same income levels".

She added that should a woman not be working, their immediate family members, such as their spouses, can also help pay for their premiums with their MediSave savings.

"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," she assured the House.

Questioning the inclusiveness of the government-administered scheme, Associate Professor Daniel Goh, Non-Constituency MP from the Workers' Party, said that "risk-pooling should be done in such a way as to maximise the utility of social protection for all groups".

"Why then are we splitting the population divisively into men and women?" he asked.

Workers' Party MP Sylvia Lim also asked if this is a "missed opportunity" for the Government to demonstrate mutual support and solidarity for both genders.

Dr Khor said that the decision not to equalise the premiums was made to get more people on board for coverage.


The Health Ministry expects that at the start of the scheme in 2020, the existing cohort — or those on ElderShield scheme — would be much larger than the mandatory cohort for CareShield Life. The ElderShield scheme is not compulsory and some have opted out of it.

"For existing cohorts, the decision (to join CareShield Life) will not be mandatory, but we will want to encourage as many as possible to come on the scheme," Dr Khor said.

"There is a potential for up to two million to be policyholders in the CareShield Life scheme, whereas for the mandatory cohort, for the first 11 batches, the estimate is about 600,000. If we do not determine the premiums on an actuarially correct basis, there is likely to be adverse selection," she added.

The ElderShield scheme, she pointed out, is also gender-differentiated, "where men pay lesser than women for the same age group and income level".

"If we equalise the CareShield Life premiums, they would know that they are paying more than actuarially determined and so, some would feel that they do not want to join the scheme, there would be dropouts."

Dr Khor reassured the House that the Government "will continue to explore" how to give more help to women who face difficulties, but ultimately, "it is more prudent to keep the scheme actuarially correct and fair".

Why is CareShield Life not compulsory for older cohorts?

Explaining why the CareShield Life scheme is not mandatory for Singaporeans from existing cohorts, or those under the ElderShield scheme, Dr Amy Khor, Senior Minister of State for Health, said that CareShield Life is a pre-funded scheme where premiums are paid only until a certain age (67) and the policy will continue to provide lifetime coverage.

"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 (the policy)," she said.

Some Singaporeans in existing cohorts had previously declined ElderShield coverage when they were auto-enrolled at the age of 40, she noted.

When ElderShield was launched in 2002, 38 per cent of Singaporeans who were auto-enrolled opted out, for example.

While the opt-out rate has since dropped to 5 per cent last year, about one in four people in the existing cohorts have opted out of ElderShield.

Other Singaporeans may also have made plans for their long-term care needs through other means, she said.

As of last year, about one-third of ElderShield policyholders have bought ElderShield supplements from the ElderShield insurers, which are Aviva, Great Eastern and NTUC Income.

Taking into account these considerations, the review 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.


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