Medishield Life – What to worry about?

Gan Kim Yong has fleshed out some of the details concerning premiums payable in year 2015 and year 2019. Under Medishield Life, with higher payouts and benefits, it is expected that the premiums should logically be higher. But given the fact that the coverage is for everyone, young and old, covering the whole population with everyone paying, would there be economy of scale to offset the premiums to make it even lower instead?

Gan Kim Yong announced that the premiums would be held unchanged for the next 5 years which is quite reassuring. This is possible by taking into consideration all contingencies that could be foreseen, a kind of front loading. So whatever that needs to be added in, real or imagination, or just to take care of the unexpected has already been added to the premiums payable. Just wondering what is the percentage in this front loading to the actual cost? If it is 30%, it means the premiums are already 30% higher than it should be. And this is a very conservative guess. What if you have a decision maker that wants to think of everything under the sky that could crop up and wants to include them for safety measures, never mind, it is ok to collect more?

Would Gan Kim Yong be transparent as to how much has already been added in the calculation of the premiums? There are enough statistics from the Medisave schemes to give a reasonable estimate of claims against cost. As Gerald Giam has pointed out in Parliament, the claims came up to be 67% of the premiums collected. I stand corrected if the number is slightly different from Gerald’s number. The data shows that there is room for the lowering of the premiums instead of raising it like someone who wants to cover front and back and top and bottom, every hole that he can possibly think off or imagine.

Gan Kim Yong has given the impression that he is very concern about the cost of premiums and wanting to ensure that it will remain affordable. I find the affordable formula frightening if the cost of medicare in hospitals is not reined in and not allow to run away like a wild horse. It would be more reassuring if he also announces that the policy and objective of the Medishield Life is not profit making and any profit would be ploughed back to lower the premiums in the future. Would he commit to this?

The other frightening thing about the premium tables is the premium for the oldies. Oldies are expected to continue to pay premiums up to the age of 90. How many people would have the money to pay premiums at that age? Many would have long retired by the time they reached 65 or 70. The PMEs may even be retired by 50 or 55 and cannot find reasonable employment. There are exceptions for people to work to 90. Maybe you can find some working as cleaners in the hawker centres and food courts.

Would Gan Kim Yong want to consider lobbing off the senior citizens from his tables, say by age 70 or 75? Would it be too big a burden for the govt to pay for the oldies? He has said that there will be more govt subsidies to help the seniors, why not have a policy to remove them from the premium tables and the govt absorb the cost? Under the PGP, those 80 and above will not have to pay for the Medishield Life premiums. Is this applicable to those in the pioneer generation but not yet 80? Why is this not extended to the future seniors when they hit 80? How many seniors in the future can afford to continue to pay Medishield Life premiums after paying for a life time and no longer having an income?

Kopi Level - Green