National Day rally chas

National Day Rally 2018: How it Affects Long-Term Healthcare Financing

In this year’s National Day Rally speech, PM Lee focused on four key announcements: cost of living, housing, Merdeka Generation Package, and healthcare affordability. In this article, we will focus on the issue of long-term care financing and what new changes are being made to meet the needs of our ageing population. Is enough being done to address the long term healthcare needs in Singapore? Here are the major announcements pertaining to healthcare you should know of.

Enhanced CHAS Scheme – Extended to Everyone With Chronic Conditions

Who should be concerned? – Singaporeans with chronic condition(s) who previously did not qualify for CHAS (household monthly income per person over $1,800)

In the near future, the Enhanced CHAS Scheme will be extended to everyone regardless of income. It will be a tiered scheme according to income and will cover Singaporeans with chronic conditions.

The current CHAS schemes covers costs for lower-middle income families when they visit their local GPs. The scheme subsidies costs for treatments like common ailments to chronic disease treatments like diabetes, dementia, stroke and more. Find out more about the current CHAS scheme here.

Currently, there are about 1,600 participating GP clinics that are under the CHAS scheme. More polyclinics will be built by 2020 in the heartlands like Sembawang and Eunos to cater to the growing healthcare needs of our population in the community.

  Current CHAS – Blue Card Current CHAS – Orange Card Enhanced CHAS Scheme
  1. Household income per person is $1,100 and below
  2. For households with no income, the Annual Value (AV1) of residence must be $13,000 and below
  1. Household income per person is $1,101 to $1,800
  2. For households with no income, the Annual Value (AV1) of residence must be $13,001 to $21,000
1. Extended to all Singaporeans with chronic conditions regardless of income. 
Benefits for chronic conditions
  1. Up to $80 subsidy per visit
  2. Capped at $320 per year
  1. Up to $50 subsidy per visit
  2. Capped at $200 per year
  1. Tiered by income
  2. More details to be announced

Source: CHAS SG

Is it sufficient? 

Though details of the Enhanced CHAS Scheme have not been announced, it is unlikely that the subsidies are sufficient to cover the costs of long-term care, especially for those in the lower income tiers.

According to the Journal of Diabetes article by Ang, Yap & You (2018), the estimated lifetime cost to manage a type 2 diabetes is SGD 132,506 for an individual who is diagnosed at age 40. A diabetic patient will have to pay for oral medication (pills), blood glucose monitoring kit and regular check-ups from a polyclinic or their own GP. 

While, the subsidies could encourage citizens to continue with follow-up visits that are crucial to chronic disease management, the cost to care and manage chronic diseases are exorbitant. Thus, subsidies from Enhanced CHAS scheme may not be sufficient to cover the full extent of managing a chronic disease. 

Merdeka Generation Package – Those Born in the 1950s

Who should be concerned? – Singaporeans born between 1950 and 1959

Increasing healthcare financial costs are one of the main worries of the Merdeka Generation as most of them are in their 60s and have retired or will be retiring soon. With the introduction of the Merdeka Package, the Merdeka Generation are able to receive care and meet their medical needs without worrying about the high financial costs. It is similar to the Pioneer Generation Package (PGP) but the coverage for the Merdeka Generation will be lesser as compared the PGP.

This Merdeka Package will cover:  

  1. Outpatient Subsidies
  2. Medisave Top-Ups
  3. Medishield Life Premiums Subsidies
  4. Payouts for long-term care

More information about this scheme will be released in 2019. Read up more about the Pioneer Generation Package here.

CareShield Life – Financial Support for Long-Term Care 

Who should be concerned? – Singaporeans born before 1980

To defray costs of long-term care financing, MOH will be implementing CareShield Life scheme in 2020. PM Lee stresses the importance of being insured and prepared for future care needs in the event that we are unable to perform 3 or more Activities of Daily Living (ADL) when we grow old. Those who are born in 1980 or later are automatically registered under the scheme. Singaporeans who are born earlier can choose to opt in to CareShield Life Scheme. Read our detailed breakdown of CareShield Life here.

Are These Subsidies Sufficient for Long-Term Care? 

“Intermediate and long-term care (ILTC) services are typically required for persons who need further care and treatment after being discharged from an acute hospital as well as community-dwelling seniors who may be frail and need supervision or assistance with their activities of daily living.” – Ministry of Health

There are a few options for long-term care in Singapore, ranging from nursing homes to home care.

Long-term care option Estimated monthly cost
Daycare $250 – $1,200
Domestic helper $800
Live-in nurse $1,000
Nursing home $1,200 – $3,500
On-demand home nurse (once a week) $800

Let’s take the example of Mr Lim, an elderly man aged 66 years old who is unable to perform at least three ADLs. His long-term healthcare costs are as follows:

Item Cost per year
Domestic helper $9,600
Milk feeds $12,000
Adult diapers $2,400
Home nursing $2,400
Follow-up appointments $1,200
Medication $1,200
Total $43,200

Without taking into account insurance premiums, Mr Lim will incur $43,200 in healthcare costs.

Assuming his household income per person is $1,500. He will be eligible for the following healthcare subsidies:

  1. CHAS Orange – Capped at $200 per year
  2. Careshield Life – $600 monthly payout, totalling $7,200 annually
  3. Merdeka Generation Package – potential payouts for long-term care and outpatient subsidies

Total healthcare cost per year after subsidies:

Before subsidies Less CHAS Less Careshield Life After subsidies
$43,200 -$200 -$7,200 $35,800

With a household income per person of $18,000 annually, Mr Lim will need to rely on his Medisave and/or family members to help undertake the remaining $35,800.

Summary of Different Schemes

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