Pioneer Generation Package – The brass tacks

While the euphoria is still in the air that the 2014 budget is as generous as one could expect, let’s get down to brass tacks to know what it really means to the beneficiaries. As a 65er, it is up close to want to know what one will get from this package.

Assuming that one is healthy and not going to visit the outpatient clinics often, one is not going to get any subsidy from this provision. The main thrust of the Pioneer Generation Package is the life long subsidies of $200 to $800 per annum which are targeted at the impending introduction of Medishield Life Insurance. Presumably the Medishield Life will cover all and sundries of medical conditions of an oldie and there is no need to quibble over what is covered and what is not, and also no need to look at the fine prints of the T & Cs.

As I pointed out in my first post on this subject, the 65ers will get $200 per annum for life. And if this is fixed, meaning no incremental adjustments over the years as the 65ers grow older, it is likely that most of them will get about $4000 in all for another 20 years of lifespan, plus or minus depending on when one kicks the bucket. And that is it, nothing more, nothing less.

The next part that a 65er will be interested to know is the premium for Medishield Life. The current Medishield Plan premiums for a 65er are around $400 to $800 per annum depending on the coverage. The Medishield Life premiums cannot be lesser than these for the same age group. Assuming that the premium is $1000 and a 40% subsidy, a 65er will still have to pay $600 for the annual premium. The net cash impact is another $400 outlay on top of the $200 top up.

For the 65ers in the current Medishield basic plan, the net cash impact is unchanged but presumably with better coverage. Not sure about the co payment part and how much one will eventually have to pay for hospitalization under the Medishield Life.

The impact on the premium is not going to be static on two grounds. One, if the $200 per annum top up is going to stay as it is over the years while the Medishield Life premium rises with age. Another expected change is the annual adjustment of premiums by the insurers tagged to the amount claimed and the escalating cost of hospitalization bills. The status quo situation as projected by the current computation may not stay and the premium cost to the 65ers could go up and up with time. The compulsory Medishield Life Scheme may not be what it is today, and the funny thing, we don’t even know what this animal is like except to assume that it is benign. Would it be so and for how long before it turns into a beast like the dreaded CPF schemes, started with good intention but not the same any more?

There are many variables that can change along the way when the agenda changes. On the whole, the govt is giving away $8b over a 20 year period. With 3.5m citizens, excluding PRs, and at an estimated average premium of $400 pa, the premium to be paid to the ‘insurers’ will be $1.4b a year or $28b over 20 years ceteris paribus. Who is going to benefit from this $28b? Leong Sze Hian and Roy Ngern wrote in their joint paper that the govt needs not pay a cent more for healthcare with the schemes proposed in the budget.

Kopi level - Green


Anonymous said...

After all the mumbo jumbo in the PGP, the net result may still be the same or worse.

That $8 shorty is at it again. Talking as if Santa Clause is on duty 24/7, 365 days a year.

Cutting away the crap, just say that the PGP is FREE medical care for the rest of their remaining lives.

Now, that's something, no bullshitting, no rhetoric.

Anonymous said...

Typical strategy is to set the fee low. This already done as last year there was a large increase in premium so this year with the change, they can just do a small increase so people will accept that the change only have small impact. Next come with subsidies that make u feel good that it is even lower then you have expected.

Then the vacuum cleaner will come later when the premium starts increasing and the subsidies stay static or disappear. Go check the past scheme it's the same strategy.

Anonymous said...

I dread to think of the premiums one has to pay fr medshield life. Its definitely NOT going to be low and who do u think will be laughing all the way to the bank!

patriot said...

In Sin, what is made good today could turn lousy or even abhorrent the next moment. THIS IS BECAUSE THE RULERS ARE FREE TO PLAY WITH RULES AT WILL. THEY HAVE ALL THE SAYS TO PLAY WITH STRATEGY TO SUIT THEMSELVES.



Anonymous said...

If the Medishield Life Scheme is to be run as a private company with profit motive, you will know that it will smell.

The same logic like the transport companies, so many years never raise premiums, the cost is going higher, the shareholders' interest must be taken into account, etc etc.

Why is such a big monopolistic national health insurance scheme not run as a stats board with no profit motive and no shareholder's profit to answer to?

Anonymous said...

As a oldie but not belonging to the pioneer generation, I am really worry.

In the past before retirement, I know I need to pay income tax when I earning something but I also know that I need not pay if I have no income.

I also know that if I wanted to not pay property tax, I can choose not to own any property.

Then come the gst or consumption tax. This one must pay but at least it is tied to what I consume and I can choose to consume to the level of survival.

Now medishield life arrives. Now as retiree with no income, how to pay? If don't pay is it a criminal of offence that I have to be jailed? If so I really worry.

Anonymous said...

Like GST to help the poor?

Anonymous said...

The Pioneer Generation Package is an ad hoc policy solution targetted at a particular generation.
It is not an ongoing budget allocation to solve problems for the elderly.

Expenses for people growing old, who are not defined as the Pioneer Generation.
PM Lee has not solved any problems for you.
You will still be a burden to your children.

Anonymous said...

RB, with a $8b package and you only got $4000 over 20 years to cover the Medishield Life insurance, maybe not enough some more. Not so big deal leh.

Anonymous said...

$200 a year. If two years only $400. RB must live another 10 years to get $2000 to help him pay for Medishield Life.

b said...

It is a pack of wolves running the show. Which pocket will the $8b really go into? No need to be a genius to figure it out lah. Still believe in such crap when transparency is not in place? Still cannot understand why it takes 50 years to compute the reserve figure?

Anonymous said...

Also the $1 million dollar salary for the pukima generation.

PSS said...

Many engaging in the social media discussion seems to miss the BIG POINT about this PGP, Medishield Life tinkie ......

PSS said...

At the end of the day, such issues were already more or less figured out by Fermat, Pascal and Isaac Newton about 300 years ago or more than 3 centuries ago

PSS said...

It is in the discipline of Statistics

PSS said...

More specifically, in the field of PROBABILITY

PSS said...

To hit the issue on the head of the nail, let all the people including all the oldies be = to the sample space S


A be the event people would hit 90 and above

PSS said...

What is P(A) = to ?

[ P(A) means probability of event A ]

Once this is figured out, supposedly likely all mysteries and all the to-ing and fro-ing, all the "arguments", "speculations", "theories" are likely to be "clarified"!

The implications and the probability of many other consequences ( events ) would likely be crystal clear ......

There are many "statistics experts" in the social media, one of them frequently commenting in this blog. Now is the time to do the "heavy lifting and serious statistical inference". No point talk and talk but come to real matter cannot deliver ....