Minister of State for Health Chee Hong Tat is pushing for a new mandatory insurance scheme for Singaporeans, ElderShield. The government insurance pays S$400 a month for 6 years to Singaporean elderly who are permanently disabled. Previously an opt-out insurance scheme, Minister Chee Hong Tat is intending to increase the premiums of ElderShield and make the scheme mandatory.
“There was a need for balances among the concerns raised. First is to find the balance between enhancing the scheme’s benefits (such as payouts) and the consequent impact on premiums that the policyholder would have to pay. There is a need to balance the short- and long-term objectives, and the dual need to have a risk-pooling scheme such as Eldershield and for individuals to prepare for old age through savings. There has been some feedback to make the scheme compulsory in order to make the risk-pooling work well. However, one issue would be how low-income Singaporeans would be able to afford to pay and benefit from the scheme.”
The Singapore government has prepared a 14-member committee, the ElderShield Review Committee, to decide on the new proposals of ElderShield, and likely making it mandatory with premiums paid from the Central Provident Fund (CPF) like MediShield Life, another mandatory national insurance scheme.
Aside from MediShield Life and CPF Life, ElderShield will be the third mandatory insurance scheme forwarded by the Singapore government in recent decade. However, MediShield Life was revealed to have collected more premiums than it disbursed, prompting widespread fear that the Singapore government is again profiting out from Singaporeans again.
The decision to pass ElderShield will rest on the 14-member committee selected by the government and the ruling party-dominated Parliament. Singaporeans are not allowed any power to decide on the matter.
The move to shore up government coffers has also sparked new fears that Temasek Holdings may be running low on CPF funds due to its losses.
Raising new insurance schemes also offload taxes meant for the low income and needy, hence passing the burden of welfare from the government to people-funded pool of insurance premiums.