Medishield Life – 3 holes to plug

Without knowing the fine details of the Medishield Life Scheme, pending announcements, the intention and objective of this scheme look quite positive or very positive. The frightening thing is that such a good scheme has to be enforced by compulsion. The act of compulsion is never seen as something positive. Doesn’t the Govt believe that this is a very good scheme and every mentally sane person would want to be in the scheme except for those who are unable to pay for it? But this is no longer an issue as the Govt has a string of assistance plans to make sure that no one will be left out for not being able to afford the scheme. It is thus a non issue and there is no need for compulsion as those who have weird reasons not to participate would be very small.
 
The Scheme could be more sustainable, likeable and attractive if 3 things are considered and be worked into the formula. One is medical cost. Medical cost must be closely monitored and not be allowed to run away. This hole is somehow not addressed by the Committee as far as I can recall. And this is a very dangerous hole that could turn into a nightmare to the computation of premiums in the future. When cost gallops away, the pressure to raise premium would be very demanding and even appears logical and necessary. Would there be a watchdog or govt body to put a lid on medical cost? I cannot believe the Committee could totally ignore this devil in the scheme when it is the primary driver of premium rates.
 
The second hole that needs to be plug is profit. The Medishield Life is a compulsory national scheme and profit must not be factor in the equation. And no one must use the issue of uncertainties to impute too thick a cushion to address the sudden rise in demand for medical care. Such reasonings of padding the premiums or collecting as much premiums as the insured can afford is a dangerous precedent in the thought process. It is outrageous. The premiums must be carefully computed to be just enough though no one is able to predict the margin of errors. Any excess cost by future uncertainties should be treated separately as an act of God or accident of nature. If one is allowed to build in all the future uncertainties, the unthinkables, then the premiums would never be enough.
 
Related to the issue of profit is the issue of excess premiums collected. Premiums that have accumulated from lower claims must be ploughed back to reduce future premiums payable. Such excesses should not be conveniently channeled to another reserved fund to be accumulated for the rainy days. This is a national scheme to provide for the needs of the insured to pay for their medical care and not a profit making scheme or a scheme to fill the national reserve. Has this been discussed and worked out?
 
Would the Committee address these issues and incorporate them into the Medishield Life Scheme? Have they done it, or would they do it? These are three very big holes that could allow the premiums to go up and up and looking very justifiable, no choice. High cost, high claims so premiums must go up. Excess premiums or profits have already been set aside as reserves and untouchables.

Kopi Level - Green

Pope Francis attacks the world’s economic system

Agence France Presse reported on 14 Jun 14 that ‘Pope Francis launched a sweeping attack of the world’s economic system in an interview…saying it discards the young, puts money ahead of people and survives on the profits of war.’
 
And this is what the 77 year old pontiff said, ‘It’s madness…We discard a whole generation to maintain an economic system that no longer endures, a system that to survive has to make war… But since we cannot wage the Third World War, we make regional wars. And what does that mean? That we make and sell arms.’
 
Now who is the Pope referring to? Which economic system is he referring to? For the enlightened, the answers are obvious. For the daft, they have been glorifying and praising the same economic system and the Evil Empire as the Empire of peace run by peace loving people. Now, would they believe the Pope or would they say the Pope is lying?

Kopi Level - Green

CPF – All the right reasons to keep your money safe and sound

The withdrawal age needs to be raised and more money needs to be kept in the minimum sums of RA and Medisave Accounts. Without raising the withdrawal age, without raising the minimum sums, the lives of the CPF members will be adversely affected, maybe cannot retire, no money for medical bills.
 
Let’s revisit the right reasonings for these good policy changes.
 
1. People are going to live longer. Many people will live till 80, 90 or older. So they must have more money in their retirement savings. Any statistic to show how many will live to 80 and above and how many will not live to 60 or 65?
2. Inflation will destroy the value of their savings. So the amount to be saved must be regularly adjusted and pegged to inflation rate. This reasoning very good. If inflation every year goes up by 10%, the amount to be kept in the minimum sum must go up accordingly. Nevermind if the salary is inflation adjusted.
3. The people need $120k in their retirement account, excluding their Medisave Account, can’t remember which year this $120k was based on, to be able to live a comfortable retirement life. I dunno how they got this amount, I only eat porridge and pickled vegetables. And I don’t go holidays, I don’t go to theatres, I don’t go to foodcourts or restaurants, I just stay at home and do nothing by the time I hit 70, if I am that lucky. I think I don’t need so much money to live on.
4. This one very important, some will squander their retirement money away on women, wine and songs, and the casinos. I think this one not applicable to me. I am vegetarian and living like a monk.
5. People after 55 years are incapable of looking after their own money, irresponsible and will either spend and spend, or will be cheated of their money. Really?
6. If these people squandered their savings, no one will be there to help them. Don’t expect the Govt to be there, don’t expect their children or family to provide the financial support. I believe my children and grandchildren will abandon me on the streets. And I can depend on my blogger friends to buy me kopi.
7. Putting the money in the CPF is the safest place on earth. Money will not run away. I got no money to live now, where got money to put in the CPF?
8. Interest rate also very high. Higher than inflation?
9. And it is all done for your own good. What good can it be if cannot touch the money?

What do you think? I have added some comments based on my own situation and needs. Not sure how applicable are these right reasonings to you people.

Kopi Level - Green

The desperate cries of a pathetic 76 year old aunty

Hri Kumar did not bargain for it. He did not invite non constituent residents to his honest conversation on the CPF. But his resident, a 76 year old aunty, was there with a plate of genuine misgivings. At 76 year old, she belongs to the generation that should have withdrawn all her CPF savings when she reached 55 and has nothing more to do with the CPF. I think she chose to leave some savings in the CPF for safe keeping. She did not know that once left inside the CPF, her savings would be subject to the changes in CPF rulings, and now her money is treated just like other younger CPF members, locked up and cannot be withdrawn unlike the old terms. She did not bargain for it. CPF is the safest place on earth to keep her money. She trusted the govt with her money. And CPF did not fail her. Her money is very safe with the CPF but can only be withdrawn subject to CPF’s rules and regulations.

Hri Kumar did not bargain for her presence and her untold story of pain and struggle to get her money back from the CPF. She even revealed that her money in a local bank was withdrawn without her consent, to pay her property tax to the Inland Revenue. People are now questioning whether a bank has the right to take money from the depositors without the depositor’s consent and hand it to another govt agency.

The plight of this aunty is unusual and should not happen at all. Why must she be subject to the new CPF regulations? When she opted to leave her savings in the CPF, did the CPF explain to her that the money will be affected by new regulations? Or when new regulations came into force, did the CPF give her a chance to withdraw her money before it comes into effect, or it was too troublesome to do so? This is the same as the arbitrary transfer of money from the OA to the RA when a CPF member reaches 55. And the CPF did not bother to inform the members that once the money is transferred to the RA it cannot be used to pay for HDB mortgages. Should not the CPF inform the members as this is a major policy change and affects the finances of its members? Many members were caught by this unpleasant surprise and ended up having to fork out cash when they had more than enough money in the CPF to service their mortgages.

Why did the CPF think it not necessary to inform the members of such policy change? And why were there no CPF officers present in the conversation to answer any technical or specific question concerning CPF policies and regulations? This is a public conversation conducted by the govt or MP to answer the questions of the people. And the aunty rightly asked and expected CPF officers to be there to give her answers to her queries.

A public conversation is unlike a private conversation among friends. Many people have had many frank and honest conversations with their friends and did not need the presence of some authoritative figures around. They knew that their conversations were just talking cock sessions with no requirements to solve any issues or problems. Yes they were talk cock and sing song sessions. But the public and honest conversation on the CPF, organised by an MP, cannot just be a talk cock sessions, oops, my apologies, cannot be just a mere conversation. It was a serious conversation and if there were problems that needed to be ironed out, they must be done. And if there were questions to be answered, it would be best for CPF officers to be present to answer them. It is unfair to expect a MP to know the details of CPF policies even if he is a super talent that is supposed to know everything.

Would this 76 year old aunty get her CPF money back when the money should have been returned to her when she hit 55? It is so sad to see a dignified ex school teacher begging the Govt to return her life savings in the CPF. Can you believe that?

Kopi Level - Green

Good policies and bad politics

I could not believe my eyes when I read what Chua Mui Hoong wrote in the Sunday Times this morning. The title of her article was ‘Good policies hampered by bad politics’. I am not going to dwell on how bad the politics were or even bother to figure out what were the good policies. Anyone who is aware of the population squeeze, influx of foreigners, housing shortages, transportation and high property prices, healthcare facilities and cost, CPF protest etc etc would know what is good policy and what is bad policy.

What is remarkable in the article is the rehashing of some issues that I thought would be forgotten, best left unsaid and not to be spoken again. Or at least that was the impression I had when I saw the deflection towards the wilderness and a refusal in a meeting of the minds.

What were the pertinent points raised by Low Thia Khiang in his opening address in the last Parliament session? Other than the phrase constructive politics, I don’t thing anyone remembers. Whatever he had raised were drown by the pompous outbursts of what is good politics and all that remained was a statement and reinforcement of power politics. I am constructive and you are destructive. Period.

Chua Mui Hoong remembered some of the things I wanted to write about but got caught in the latest round of CPF angst and thought it best to leave them aside while the CPF issues take the centre stage. Here are the very strong points raised by Low Thia Khiang that provoked so much unrestrained hostility in Parliament. It was like stirring the hornet’s nest.

1. If the people continue to support a govt party that uses high handed tactics against its political opponents, we are endorsing a bullying political culture.

2. If the people support a govt party that uses governmental resources, including civil servants, to serve its partisan goals, we are condoning the abuse of political power as an acceptable culture.

3. Using differentiating measures in policies to punish people who voted for the opposition breads a culture of divisive politics.

4. It also used to be said that the political incumbent has no obligation to level the playing field, that might is right, and that the political incumbent has the right to use all legal means to remain in poser because everyone will do it they are the incumbent. This is building a self serving political culture.

The above points clearly described the political culture of the day and how constructive can the political culture be if these cultures continue to dominate the politics of this wanna be democracy? What went on in Parliament after what Low said was all about the above, the kind of ‘constructive politics’ that are uniquely Singapore.

And what is amazing in Chua Mui Hoong’s article is a dressing down of the govt for its brand of constructive politics. Unbelieveable, and I do not wish to elaborate further and anyone who wants a better feel of what she said should discover the truth by reading the article itself. 

Though there was a vain attempt to blame the WP for not playing constructive politics, it did not hold much water. The opposition parties cannot engage in constructive politics when the tone and culture of politics are set by the dominant power of the day. The total absence of a follow up discussion on the above 4 points raised by Low is the best testimony of not wanting to talk about them. The subsequent robust attacks were more a diversion from the subject matter and to ignore the elephant in the room. And Chua Mui Hoong summed it up by asking ‘whether good policies can make up for bad politics – or the absence of any meaningful discussion of it’.  She presumed that all policies were good, so let it be. Can there be constructive politics when the conditions and culture mentioned by Low Thia Khiang continue to drive the politics here?

Why was there no discussion on the 4 main points raised by Low? Were they utterance of political myths, high falutins, or were they idealistic aspirations that don’t mean anything?

Kopi Level - Red