I refer to the article “MediShield Life to focus on three areas in second phase of review” (Straits Times, Jan 29).
Focus on who pays how much to cover everybody?
It states that “After consulting about 500 people from all walks of life in 14 focus group discussions, the MediShield Life Review Committee set up in November has identified three areas to focus on:
- The benefits, premiums and limits to be set for the new universal medical insurance, so that people will feel reassured that they can afford the healthcare that they need, and also be able to afford the higher premiums they will need to pay annually.
- How to bring everyone into the scheme. These are people who are currently uninsured, the elderly beyond insurable age, and those with pre-existing diseases that exclude them for coverage, and new citizens. Some in this group could be making claims from the start, and will certainly increase the payouts by MediShield. The question is who should pay for it – the people themselves, the government, or the rest of society. And how much needs to be paid so the scheme can work yet be fair to all.
The committee also heard a “very strong call” on the Government to help the elderly and those in the lower income group pay for their insurance premiums. Mr Chin said his Committee will call on the Government to do so.”
Government spends nothing on Medishield?
In my view, what may be missing in the deliberations, is the fundamental issue that the Government has not spent a single cent on Medishield since its inception, as the scheme is funded by premiums from the insureds in the scheme.
Are there any national health insurance schemes in the world that does not cost the Government any money?
The above is significant, given that from a Cashflow perspective, the Government does not spend a single cent on healthcare, as total Medisave contributions in a year, exceed total Government operating and development expenditure, Medisave withdrawals for direct medical expenses and withdrawals to pay Medishield premiums.
Medisave inflows exceed withdrawals?
Also, with the total Medisave balance of $60 billion in 2012, I have not even factored in the annual interest of $2.4 billion into the above.
In other words, from a Cashflow basis, I estimate total Medisave inflows in a year may be about $10 billion, against total Medisave withdrawals of less than $7 billion.
Leong Sze Hian
*Leong is the Past President of the Society of Financial Service Professionals, an alumnus of Harvard University, has authored 4 books, quoted over 1500 times in the media , has been host of a money radio show, a daily newspaper column, Wharton Fellow, SEACeM Fellow, columnist for Malaysiakini, executive producer of the movie Ilo Ilo (24 international awards). He has served as Honorary Consul of Jamaica and founding advisor to the Financial Planning Associations of Brunei and Indonesia. He has 3 Masters, 2 Bachelors and 13 professional qualifications.