Medishield life premiums now compulsory/ increase to help SG govt save money?

Medishield life premiums now increase/ compulsory to help SG govt save money?-- (because govt medifund costs/expenses getting too high)?

Currently, those over 90 years old (& those with pre-existing illnesses) are not eligible (/pay higher premiums) for medishield and so ostensibly might appeal to medifund to pay/ subsidise their medical bills should they be unaffordable. By imposing higher medishied premiums and imposing the inescapable 'no opt out rule', perhaps the govt is intending to control costs by further socialising the cost of healthcare through higher medishield premiums rather than better healthy lifestyle education and other efforts to make Singaporeans exercise more- e.g. road cycling to work.

National Day Rally 2013: MediShield Life to cover every Singaporean, including elderly and those with pre-existing illness
" Elaborating on the changes, he said that universal coverage means there will be no more opting out, with everyone covered including the elderly and those with pre-existing illnesses.
MediShield Life will also give better protection for very large hospital bills, and patients will pay less out-of-pocket, said Mr Lee.
But with better benefts and coverage, this will mean that premiums will go up, he said. “(It) has to be because it has to break even,” he said, but added that the Government will subsidise premiums for those who cannot afford them."
http://m.todayonline.com//singapore/new-medishield-life-provide-lifelong-coverage-pm-lee

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FRIDAY 15 NOVEMBER 2013
More received help through Medifund in 2012: MOH
14 NOVEMBER
SINGAPORE — More needy and elderly patients received aid through the Medical Endowment Fund (Medifund) last year, the Ministry of Health (MOH) announced today (Nov 14).
MOH said that more than S$100 million in Medifund aid was provided to needy patients in 2012, an increase of about 12 per cent from the S$90 million a year ago.
S$86 million of the amount went to patients in the acute sector while S$16 million went to those in the Intermediate and Long-Term Care (ILTC) sector.
Needy elderly patients received S$33 million in aid, an increase of 19 per cent from the last fiscal year.
Over 587,000 Medifund applications were approved last year, MOH said. About 93 per cent of the successful applications received full assistance. On average, the amount of assistance was S$1,471 for inpatient treatments, and S$107 for outpatient treatments.
Medifund was introduced to assist needy Singaporeans with their medical bills, on top of government subsidies, Medisave and Medishield. In 2012, the Government injected S$600 million into the Medical Endowment Fund, bringing its total size to S$3.08 billion in capital sum, MOH said.
Copyright ©2012 MediaCorp Press Ltd. All Rights Reserved
http://m.todayonline.com//singapore/more-received-help-through-medifund-2012-moh

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References:
- 'One Million Diabetics By 2050 as Singaporeans Get Older, Fatter'- "Every one in two people, by age 70, will be diabetic - up from one in three today"(Men's Health, Oct2012, URL)

- '1 in 4 Singapore women do not exercise at all: Survey': "More than 57 per cent of them cited work as the main reason holding them back. Other reasons include family commitments, and not knowing where to start and how to take that first step towards becoming healthier."

Tags: healthcare, insurance, socialism, Singapore, inflation, compulsory, illness, obesity, diabetes, exercise,

MEDISHIELD LIFE- Problems with pre-funding

bic_cherry said:

Medishield life premiums now increase/ compulsory to help SG govt save money?-- (because govt medifund costs/expenses getting too high)?
... ...

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From the ST forum:
MEDISHIELD LIFE- Problems with pre-funding
Guess what the author n commentators are worried about is of the government playing the usual communist bait and switch trick (pretending to deliver the benefits of socialist community benefits)- laws are quickly amended and the payments (premiums) are enthusiastically collected but the funds are so corruptly and negligently managed that most communist promises almost always degenerate into shameless, oppressive ponzi atrocities.

In general, all encompassing Govt run socialism can only work under enlightened and impartial hands (both risks and benefits fairly socialised(redistributed), under the hands of leaders with obvious ulterior motives (e.g. moneytising one's position), compassionate capitalism in general works better with individuals at liberty to perform the charity themselves- remains a more stable alternative to a big but corrupt government- aka: 'animal farm'

The Straits Times; Published on Nov 19, 2013
MEDISHIELD LIFE- Problems with pre-funding
THE Government says the proposed pre-funding of MediShield Life is to benefit ourselves and not others ("MediShield Life: Panel to examine key issues"; Nov 10).
It explained that when we are young and working and have a good income, we can afford to put aside more into MediShield Life so that when we are old, we do not have to pay as much in premiums as we would otherwise have to.
Whether young working people can pay more is beside the point because premiums are paid using one's Medisave balance, and not current income, and tomorrow's seniors will likely have larger Medisave balances than today's young.
Instead of pre-funding MediShield Life, it is far simpler and more logical to retain the status quo. Leave the pre-funding premium in each young person's Medisave account and use this money, plus interest earned in the future, to pay for the true age-determined cost of MediShield Life when he is old.
Who would put money into a common savings pool if it requires him to surrender ownership of it, and he cannot even tell how much money is in the pool at any time?
And unlike saving the pre-funding premium in his own Medisave account, a person loses all his "unused" pre-funded premiums remaining in MediShield Life when he dies.
Also, new citizens or permanent residents start pre-funding only when they join MediShield Life. In contrast, most Singapore-born citizens will start pre-funding their MediShield Life earlier, possibly in 2015 when it is implemented.
Is it fair that newcomers in, say, 2030 get to enjoy the 15 years of pre-funding premiums paid by others?
Unless the Government succeeds in getting everyone to pay MediShield Life premiums, those who do not pay would also get to enjoy the pre-funding premiums paid by others.
It is difficult to avoid the perception that pre-funding is a "wealth transfer" from today's young to today's old, to make MediShield Life premiums affordable for the latter.
It also exposes today's young to considerable risk because when they become tomorrow's old, they have to depend on tomorrow's young to cross-subsidise their MediShield Life premiums - an inter-generation problem many nations face.
David Boey
Copyright © 2013 Singapore Press Holdings. All rights reserved.
Problems with pre-funding

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Comments on the same page seem to worry that medishield life will eventually take the form of a shameless, degenerate ponzi scheme:

Nicole7wong • 18 hours ago −
Good points raised, not unlike the debate currently raging in America and Japan.
It is in all likelihood that any money put into a common fund by today's working youth will be spent largely by the retiring babyboomers leaving little if any when today's working adults retires. This is just maths, with a inverted pyramid population there are just much more retirees tapping on to the medical fund than people contributing to them. Medical services are not cheap.
It is the almost the same story sold to the baby boomers when they are young with pension schemes. Pension schemes gets bankrupt before the people who contributed into them get eligible to enjoy them.
------
diealsomustbelikethat • 19 hours ago −
david is implying that the CPF scheme is a ponzi scheme. is there any truth to it?
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sgvoice • 19 hours ago −
I'm beginning to wonder why the government is so enthusiastic about pre-funding.

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How medishield life could end up no better than just another scam/ ponzi scheme

How medishield life could end up no better than just another scam/ ponzi scheme.

PM Lee himself cannot guarantee that the reserves of Singapore are safe from the greased fingers of bankers hands, so how can I trust PM Lee's promise that "when we are young and working and have a good income, we can afford to put aside more into MediShield Life so that when we are old, we do not have to pay as much in premiums as we would otherwise have to."(MEDISHIELD LIFE- Problems with pre-funding) when the Prime Minister himself has said in 'Regulating tightly 'not always feasible''(full text) that (whilst ideally) "a wall should be built between the safer commercial banking functions - that mainly involve taking deposits and giving out loans - and the more risky sort that hedge funds and investment banks engage in - which Mr Lee said sometimes amounted to 'gambling'."..."financial markets have variegated into all kinds of sophisticated activities, products, derivatives, investment activities, trading - and the (commercial banks) are also in these" . "It's very hard to draw a line," ....""if all the banks threaten to die at the same time, governments cannot help but go and rescue them", as they did in 2008 and 2009"...

PM Lee must thus convince Singaporeans that he is indeed able to draw the line to avoid having to use Singapore's reserves (and CPF monies) to bail out banks whom he has alluded to are already transferring citizens savings to their investment arms performing "all kinds of sophisticated activities, products, derivatives, investment activities, trading - and the (commercial banks) are also in these". To have to use national reserves on this known and prevalent malpractice- just to replenish the basic savings account monies that bankers gambled/ squandered "'rescue them' as they did in 2008 and 2009"- is I think unconscionable.

In so far that the Singapore government refuses (or declares it impossible) to effectively draw the line between what is essentially the systemic risk from bankers gambling and the running of safe commercial banks (separate from investment banking arms), I unfortunately cannot trust the Singapore government to run a prefunded medishield scheme cos the exposure to banker's profligacy and gambling, makes medishield life no safer than just another sickening communist bait-and-switch method scam/ ponzi scheme.

'Regulating tightly 'not always feasible' article:

We are choosing not to be healthy

We are choosing not to be healthy
FROM SANJEEV GATHANI
22November2013.
I read several articles recently, concerning obesity and the challenges facing today’s generation in maintaining a healthy lifestyle.
Given the pressures of chasing the five Cs, many of us forget that there will be no wealth without health. Even if we earn the wealth, the paradox is that we would have to pay doctors to earn our health.
The authorities have invested money and time to educate the public about adopting a balanced lifestyle. Exercise facilities and nutritional information are readily available. Yet, we choose not to take what is provided to us on a silver platter.
We make choices at every step of our lives, and we must make informed ones based on the information provided. Thereafter, we live with our decisions. No amount of advertising and education can help if one does not realise the importance of being healthy.
It is not the exterior, though, that matters. Ultimately, what matters is the engine inside that runs the body.

http://m.todayonline.com/voices/we-are-choosing-not-be-healthy

Perhaps property tax should increase to subsidise healthcare costs a bit (more).

For the record:

Perhaps property tax should increase to subsidise healthcare costs a bit (more).

sunzoner said:

PainRack said:

Thread source: Medishield life premiums to increase/ made compulsory to help SG govt save money?
You ask again why I say you live in fantasy world?...

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Now I get it. You are having some serious problem reconciling the "reality" you mentioned in your post and the facts of the matter.
You are assuming that any change in medishield/medisave can help the case you mentioned in your previous post. You then assumed the policy makers will put what you thought is important and implement something which might make the case you mentioned better.
You are unable to see that the three "medi" is the pillar of the incumbent's policy. Medisave - so less payment comes out of pocket for the patient. Medishield - so patients pay the rest in advance. Medifund - so when the patient really got no access to more money, state pay reluctantly.
This three pillar will not change.
For the case you mentioned, lets think how it will help him/her...
No more medisave? medishield covers maybe a tiny amount? lets bankrupt your family before the state comes in... ...
Bulls right?
Your WOT fails to help your arguement. Why? who does the politicians talk to? Empty air? They talk to the people. So why they use a description or language that defines things differently? Newspeak?
The healthcare bill paid for by the state is low. But the bill paid by the citizens can be big. I nfact, low state expenditure means the citizens have to foot the rest.
Your data on GDP cost???
Healthcare Financing | Ministry of Health
The state only pays 1.4% of GDP for healthcare. So even if overall healthcare spending is 4% of GDP, its a heavy 2.6% on citizens? aka more than half the burden falls on citizens. This is ok?
The above still doesnt include people who put off medical treatment or flat refuse to go see doctor in case they need to pay the bills.
So what if the healthcare expenditure is low? if people refused to see the doctor the expenditure is low. But does this mean healthcare is accessible or even low?
I think you really need to think about the issue rather than just get your data from the news...

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Hi Sun,
Thanks for reminding "The state only pays 1.4% of GDP for healthcare. So even if overall healthcare spending is 4% of GDP, its a heavy 2.6% on citizens", as mentioned and having explained myself, Singapore is still Sampan 2.0, so the young are not yet ready for the concept of "pre-funding" yet, at least not in a state where the national reserves are always in peril, where the prime minister is a puppet of bankers and who cannot properly regulate their use of savings deposits for risky, leveraged investments. So Inix and Pain, pls make sure that the other 2.6% is not still paid for by younger citizens, albeit with the seductive excuse of "pre-funding" cos no generation wants to be known as the one that mistreated the next &/or brought the nation down. Pls ask the govt to budget the 2.6% from its annual budget, maybe cut down MOM budget (they shuffle paper around too much)/ even cut defence budget (12billion annually is a lot of $$$)- or best= raise taxes- GST,corporate, COE, income tax, property tax- any better suggestions?

PainRack said:

I'm sorry, but you trying to find someone else to echo your viewpoint does not make it a valid policy item.
Your viewpoint just smacks too much of the 'its their own fault' mentality. Its people fault for being poor. Its people fault for falling sick. Its people fault for......
In other words, too much moral play, too little action.
I think you think you're trying to say that people should be empowered to take ownership and care of their own health, but your words are throwing out an entirely different vibe altogether.

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Sorry if the vibe is wrong but yes, indeed "people should be empowered to take ownership and care of their own health", in Europe where health care costs are socialised, so is wealth, I understand UK and Norway for example, the income tax is up to 60% iirc, Singapore current Max income tax is only 21% iirc- so if we were to follow, them income and corporate tax must be raised- although MNCs might grumble of not leave. UK and Scandinavian countries thus do not have the prefunding concept and those earning more contribute proportionally more (tiered income taxes)... The young are not compelled to pay more just because being young, they are easily bullied n just like the Vietcong in their sampans, can U trust the PAP in their sampans2.0 (ferrying the bankers around) to be able to run a viable 'pre-fund' system (as opaque as national reserves)?- even Obama care is paid for from govt budget(albeit debt), so why bully the young just because they are young? For a senior to demand that the young pre-fund medishield just so the senior can enjoy the best care reeks of bullying if not deception- in so far as generation after generation suffers diabetes earlier and earlier in life, and the solutions are subcontracted to big pharma with expensive drugs, healthcare cost will rise exponentially and soon, the young will be totally disillusioned and the consequence of such ill sentiment shouldn't be underestimated- heard of the Arab spring?

Whilst I am not against universal healthcare per se, European and Obamacare models reveal high government costs, any responsible suggestion must be fair to all sides- given the unhealthy/iresponsible lifestyles exaggerated generation after generation, something must urgently be done to stem the root of the obesity/ sedentary life problem. The singapore government has previously refused to reveal/ discuss the true health and quantum of our national reserves, so what suggests that the young will accept another compulsory obligation given the loud cries against NS already, will they believe or will they rebel? You should be old enough to know that the policies of politicians wearing rose tinted glasses often fail after not long.

Btw, I feel like writing an article about how, in a progressive society, the fraction of annual value (AV) as property tax (now mostly just 4% should be made higher than GST since GST hits the poor proportionally higher than the rich- rebates could be given for any property tax increase e.g.,at a waiver rate of say $4k AV p.a. worth per person, so that if the tax payable on a $20k property resided in by 4 Singaporeans would be 8%*(20k-4*4k)= $320 p.a.- but the same property resided in by only person will attract a tax of $1680 p.a (less Sgporean, less waiver...)..... Fair?.... Think my new idea is more important than this old medishield thread... Time I move on...agree w me?

Re: We are choosing not to be healthy

... the worse is that we are limited to deduction for insurance premium on our very own medisave even though
the amount inside can last us another 30 yrs +....damn the pigs

TKL: Pre-funding not feasible for MediShield Life.

bic_cherry said:

From the ST forum:
MEDISHIELD LIFE- Problems with pre-funding
... ...

Click to expand...

The Straits Times, Published on Nov 25, 2013
Pre-funding not feasible for MediShield Life
CURRENTLY, MediShield requires an annual premium that varies according to age. Younger people pay a lower premium, while older people pay a higher sum.
The Government is now planning to introduce MediShield Life, which covers people for life.
There has been some discussion about pre-funding for MediShield Life ("Problems with pre-funding" by Mr David Boey, last Tuesday; "Merits of pre-funding" by Ms Maria Loh Mun Foong; last Thursday; and "Caring for the old should be the norm" by Mr Geoffrey Kung; Forum Online, last Thursday).
The aim is for the insured person to pay a level premium to cover him for life. This is akin to a life insurance policy.
In both cases, the claim rate is lower for younger people and higher for older people. Pre-funding allows a person to pay a level premium that is deemed by an actuary to be sufficient for his lifetime.
There is, however, one key difference that makes pre-funding not feasible for MediShield Life.
In a whole-life policy, the sum assured is fixed for the duration of the contract.
For medical insurance, the cost of treatment is expected to rise over the years due to inflation. Also, the cost depends on the choice of hospital and specialists, and can vary significantly from one claim to another.
Some countries have adopted measures to make medical treatment more affordable for older people through cross-subsidies and supported by general taxation. They do not try to achieve this goal by using pre-funding under individual contracts.
Tan Kin Lian
Copyright © 2013 Singapore Press Holdings. All rights reserved.
http://www.straitstimes.com/premium...funding-not-feasible-medishield-life-20131125

Re: TKL: Pre-funding not feasible for MediShield Life.

kezgtree said:

... the worse is that we are limited to deduction for insurance premium on our very own medisave even though
the amount inside can last us another 30 yrs +....damn the pigs

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Guess the govt is afraid of personal medisave being exhausted... resulting in many Singaporeans being dependent on govt medifund help.... (govt considers personal medisave accounts a mode of prefunding- save when young to spend when old)- especially as health care costs escalate in old age (a mostly 'healthy' person might incur say 80% of his life time medical costs in the last year of life if say he suffers a severe/ fatal illness but clings on to hope of medical miracle cure- e.g. cancer treatment where chemo and radiotherapy even after surgery might not even effectively prolong life for 6months for a late stage cancer)

Thus I feel that reverse mortgage property to HDB is another source of funds for the property rich... Until a set limit of course, so that the aged sick can still have best chance to stay in their 'purchased' HDB property- and then medifund will then kick in.... So no need for all the complicated medishield life talk, and the govt can possibly be more generous with medisave withdrawals for serious chronic diseases...

As for the kids (is inheritance), they will have to depend on a credible govt to provide for a good education system and in consequence, a vibrant economy where there is no problem finding jobs (affordable rental HDB for those who cannot afford to buy HDBs).

All this is only possible if the Singapore govt is sincere in implementing/ guiding policies of good healthy lifestyles/ work life balance well- so that each generation is more happy than the last- so that the overall burden of healthcare costs is actually reduced rather than increased exponentially.

Re: TKL: Pre-funding not feasible for MediShield Life.

bic_cherry said:

...

Thus I feel that reverse mortgage property to HDB is another source of funds for the property rich... Until a set limit of course...

As for the kids (is inheritance), they will have to depend on a credible govt to provide for a good education system and in consequence, a vibrant economy where there is no problem finding jobs (affordable rental HDB for those who cannot afford to buy HDBs).

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reverse mortgage for hdb is creating a lot of homeless old people stinking up the streets now. that's not a solution for anyone. property tycoons should be rich enough to pay their bills, or sell off a million dollar condo.

and you wnat sinkiment for create jobs for sinkies? wait long long, or you take time travel machine back to 70's loh!

Re: TKL: Pre-funding not feasible for MediShield Life.

da dick said:

reverse mortgage for hdb is creating a lot of homeless old people stinking up the streets now. that's not a solution for anyone. property tycoons should be rich enough to pay their bills, or sell off a million dollar condo.
and you wnat sinkiment for create jobs for sinkies? wait long long, or you take time travel machine back to 70's loh!

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Reverse mortgage to HDB only for emergencies, at until 20% equity left, then medifund will kick in completely (4rm and smaller- so these elderly need not lose their homes/ have to downgrade), the converse is poll tax premised Medishield-life policy, outcome I think is the same, but more a bit more painful for the latter...

(Final figures subject to readjustment, this one = my ball park only.)

Medishield-life, PM Lee contradicts Lee Kuan Yew's hard truths political legacy.

Medishield-life, PM Lee contradicts Lee Kuan Yew's hard truths political legacy.
Quotes 2 sources below, comparison is very much self explanatory.

National Day Rally 2013: MediShield Life to cover every Singaporean, including elderly and those with pre-existing illness
" Elaborating on the changes, he said that universal coverage means there will be no more opting out, with everyone covered including the elderly and those with pre-existing illnesses.
MediShield Life will also give better protection for very large hospital bills, and patients will pay less out-of-pocket, said Mr Lee.
But with better benefts and coverage, this will mean that premiums will go up, he said. “(It) has to be because it has to break even,” he said, but added that the Government will subsidise premiums for those who cannot afford them."
New MediShield Life to provide lifelong coverage: PM Lee | TODAYonline

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My major objective in the early days was to make sure that nobody derails the idea of having individual accounts for CPF and Medisave. Whatever you earn, it’s yours. Because once you have that individual account, any suggestion that you put it into a common pool and everybody takes out from it (as with other welfare systems) is bound to lose you votes.
So if Low Thia Khiang says now, let’s set up a common pool, I think he’ll lose votes in the next election. Are you prepared to put your money into a common pool, having slogged and built up your CPF nest egg? It’s yours and if you don’t use it, you can leave it to your children or your relatives or whoever you like. Why should you put it into a common pool and everybody draws out at your expense, which is what’s happening in some Western countries? The system has collapsed.
From Lee Kuan Yew : Hard truths to keep Singapore going. (Eds Han FK, Z Ibrahim, Chua MH, L Lim, I Low, R Lin, R Chan) Straits Times Press 2011

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Lower premiums with collective effort from all parties

The Straits Times, Published on Dec 02, 2013
MEDISHIELD LIFE
Lower premiums with collective effort from all parties
I DO not see how ordinary citizens can play a significant role in pre-funding the cost of a national health-care scheme like MediShield Life except to be more conscious about leading a healthy lifestyle to prevent sickness ("Role of pre-funding" by the Ministry of Health; last Wednesday).
The Government's generous budget for health-care expenditure should provide the main funding.
Citizens also need to be encouraged to be responsible and maintain good health to keep costs down, and the insurance industry encouraged to make less profit.
The question of the affordability of premiums does not end when the Government provides help for the current cohort of elderly Singaporeans, because society will always have elderly who are poor.
If pre-funding in MediShield Life is meant for each cohort, would it not be better and fairer for policyholders to keep the funds in their respective Medisave accounts and use them when needed in old age?
MediShield Life should include a no-claims bonus for healthy elderly policyholders to pay less annual premiums. This will encourage people to adopt a healthy lifestyle to save costs while not burdening others.
The key to an affordable premium is the collective effort of all parties involved to guard against waste to save cost.
The concept of setting aside pre-funded amounts contributed by each cohort till old age is not practical because a person's fortune, lifestyle, health and lifespan may change.
How can the prevailing "affordable" premium be administered when, in a cohort, each policyholder has different health risks at varying ages?
According to a Bloomberg study, Singapore's health-care system is one of the most efficient in the developed world, with a very small percentage of gross domestic product (GDP) per capita spent on it. We can improve it with higher GDP allocation.
If we can resolve the cost issue of the new MediShield Life - with insurers keeping premiums level, the health-care industry controlling waste to keep costs down, and people paying less by leading a healthy lifestyle - the system would operate well with affordable premiums.
Paul Chan Poh Hoi
Copyright © 2013 Singapore Press Holdings. All rights reserved.

Lower premiums with collective effort from all parties

Re: TKL: Pre-funding not feasible for MediShield Life.

bic_cherry said:

The Straits Times, Published on Nov 25, 2013
Pre-funding not feasible for MediShield Life
CURRENTLY, MediShield requires an annual premium that varies according to age. Younger people pay a lower premium, while older people pay a higher sum.
The Government is now planning to introduce MediShield Life, which covers people for life.
There has been some discussion about pre-funding for MediShield Life ("Problems with pre-funding" by Mr David Boey, last Tuesday; "Merits of pre-funding" by Ms Maria Loh Mun Foong; last Thursday; and "Caring for the old should be the norm" by Mr Geoffrey Kung; Forum Online, last Thursday).
The aim is for the insured person to pay a level premium to cover him for life. This is akin to a life insurance policy.
In both cases, the claim rate is lower for younger people and higher for older people. Pre-funding allows a person to pay a level premium that is deemed by an actuary to be sufficient for his lifetime.
There is, however, one key difference that makes pre-funding not feasible for MediShield Life.
In a whole-life policy, the sum assured is fixed for the duration of the contract.
For medical insurance, the cost of treatment is expected to rise over the years due to inflation. Also, the cost depends on the choice of hospital and specialists, and can vary significantly from one claim to another.
Some countries have adopted measures to make medical treatment more affordable for older people through cross-subsidies and supported by general taxation. They do not try to achieve this goal by using pre-funding under individual contracts.
Tan Kin Lian
Copyright © 2013 Singapore Press Holdings. All rights reserved.
http://www.straitstimes.com/premium...funding-not-feasible-medishield-life-20131125

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Despite his pathetic 30 years in the line, Tan Kin Lian does not even know how insurance works. The premiums paid are not just lying around collecting dust until a claim is made. It is invested in all kinds of instruments. That is why level premiums are workable in reality.

Let's say a person starting at 25 pays insurance and only makes a claim at say 65. That gives 40 years for his premiums to be invested. The job of the insurer is to ensure that the returns on investment keep pace with medical inflation.

It is far better to lock in a level premium at a possibly higher rate, rather than start off low but keep having your rate revised at the whim of the insurer. The insurer will have every incentive to eat you alive.

Whole life insurance does not have fixed sum assured as well. It grows at 1 to 2% per annum depending on how good the insurer is.

And cross funding is just a cute term to make the younger generation subsidize the needs of the older generation. As a member of the older generation, he and I would welcome it, but it is bad for the kids. That guy is pathetic.

Re: TKL: Pre-funding not feasible for MediShield Life.

Thick Face Black Heart said:

Despite his pathetic 30 years in the line, Tan Kin Lian does not even know how insurance works. The premiums paid are not just lying around collecting dust until a claim is made. It is invested in all kinds of instruments. That is why level premiums are workable in reality.
Let's say a person starting at 25 pays insurance and only makes a claim at say 65. That gives 40 years for his premiums to be invested. The job of the insurer is to ensure that the returns on investment keep pace with medical inflation.
It is far better to lock in a level premium at a possibly higher rate, rather than start off low but keep having your rate revised at the whim of the insurer. The insurer will have every incentive to eat you alive.
Whole life insurance does not have fixed sum assured as well. It grows at 1 to 2% per annum depending on how good the insurer is.
And cross funding is just a cute term to make the younger generation subsidize the needs of the older generation. As a member of the older generation, he and I would welcome it, but it is bad for the kids. That guy is pathetic.

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Hi ThickFace, u double posted your message, anyhow, my reply is as follows for your convenience, please continue any further discussion on prefunding/ TKL letter at the thread U started, thanks- Debunk Tan Kin Lian's views on medical insurance
Why prefunding structure for Medishield-life is like fitting square peg into round hole.

Thick Face Black Heart (03Dec2013) said:

Thread source: Debunk Tan Kin Lian's views on medical insurance
Maybe I misread him, if I got the impression that he was FOR cross funding, rather than AGAINST cross funding.
In any case, it is possible for premiums to be fixed from the start, but for claim limits to keep pace with inflation. That is what whole life insurance does, and I don't see why the same concept cannot be transferred to medical insurance.
Unless you're saying medical inflation is much faster than the overall rate of inflation - in which my contention would be for the govt to co-fund the scheme. Medical inflation is something that the govt much play an active hand in managing. If it fails, the govt must co-fund the necessary amount.
There ARE reasons why a floating premium that increases with age and subject to changes in life expectancy is appropriate, but not for the reasons TKL mentioned. If there is to be universal insurance coverage, the govt must ensure such a floating premium scheme has adequate checks and balances. Thus far what I'm seeing is that the govt wants everyone covered but still pushing the biggest share of the pie to us without actually detailing how premiums and costs will be contained over the long term.

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Hi Thick Face, Mr Tan did not explicitly state that he is against cross funding, however, his insistence that govt fund elderlies healthcare costs from general taxation rather than from collecting higher premiums from younger Singaporeans suggest his aversion (to cross funding) as strongly so.

The problem with prefunding however, according to Mr Tan, is that such fixed annual premiums mechanisms are indeed only better suited for unitary claim and terminal condition based insurance policies such as whole life policies: http://en.m.wikipedia.org/wiki/Life_insurance in which insurance payout are prefixed, largely inflexible (can claim once only and that is it) and only happen in castrophic/terminal instances- e.g. death/ permanent disability/ terminal illness- I.e. where medical treatment is at best palliative and NOT curative/ life extending ... BUT medishield is insurance for mostly curative/ life prolonging medical treatment (cancer cure/ kidney dialysis/ transplant)- so because the life insurance structure is deemed too rigid and inflexible to be applied to a health insurance scheme, Mr Tan suggests that the only sustainable way forward is by term insurance, not prefunding since it is likely that a prefunded model is too rigid and narrow and thus will not satisfy the needs of Singaporean's where immediate healthcare costs is concerned.

Term insurance, appreciated for its widespread of earlier claim options, unfortunately however, is linked to floating premium rates- in which case, we are back to square one and better off improving the health of Singaporeans and tweaking the current medishield system rather than throwing the baby out with the bath water and instead defining medishield along the lines of a (terminal illness- terminal claim) based structure (whole life, prefund annual premiums)- which regretably, would be akin to fitting a square peg into a round hole.