Medisave tweak to help older folk pay for private plans
A NEW formula on the amount of Medisave that can be used to pay for health insurance premiums means that about 200,000 older people will be able to tap on Medisave to pay a larger share of their private integrated plans (IPs).
There will be two tiers to the Medisave withdrawal: the first for basic MediShield Life, and the second "Additional Withdrawal Limit" to help pay the higher IP premiums.
There will be no limit on the amount of Medisave that can be used to pay the basic MediShield life premiums. Health Minister Gan Kim Yong explained: "We have told Singaporeans they will be allowed to use Medisave for the full amount of their MediShield Life premiums after applicable subsidies. So there is really no need to put a limit on Medisave usage for MediShield Life premiums."
On top of that, people will be able to withdraw an additional $300, $600 or $900 a year, depending on their age, to help offset the cost of higher premiums for the private portion of their insurance.
For some, it could mean as much as $700 more than they can currently use from Medisave.
All IPs will incorporate MediShield Life. So part of the IP premium is paid to MediShield Life.
To help people understand the system better, the Ministry of Health has asked the five insurers to inform people of the amount of premium that goes to MediShield Life as well as the portion of their claims paid for by it.
Today, people can use $800 to $1,400 from Medisave to pay for their health insurance, enough to pay for Medisave premiums of $50 to $1,190 a year.
This means those in the oldest age group can use only $210 from Medisave to offset the IP portion of their premium. In the future, they can draw up to $900 a year just for the private IP portion.
More than 60 per cent of MediShield policyholders, or about 2.4 million people, have IPs.
Mr Gan said: "With these changes, Singaporeans will be able to use the same or more Medisave for the private component of their IPs."
Chia Shi-Lu, head of the Government Parliamentary Committee (GPC) for Health, said the Additional Withdrawal Limit covers most IPs targeting B1 wards. He said: "This may give pause to those who are on, or considering higher IP plans, as the ability to cover most of the premium through Medisave alone is an attractive one."
Fellow GPC member Tin Pei Ling said letting older people use more of their Medisave will help seniors, especially retirees, better afford an IP, should they choose it.