Use of Medisave Funds to pay for Parents’ Healthcare Expenses

Mr Gerald Giam Yean Song asked the Minister for Health what percentage of Singaporeans currently draw from their adult children’s Medisave accounts to pay for their own healthcare expenses.

This Parliamentary Question that I asked the Health Minister on 21 October 2011 relates to a point that I brought up in my maiden speech on 18 October, concerning the healthcare burden that low income families have to bear. It is an issue of great concern to me, which I will continue to raise in future Parliament sittings.

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Mr Gerald Giam Yean Song asked the Minister for Health what percentage of Singaporeans currently draw from their adult children’s Medisave accounts to pay for their own healthcare expenses.
The Minister for Health (Mr Gan Kim Yong): Sir, in 2010, there were around two million working Singaporean CPF members, of which 80,000, or less than 5%, used their CPF to pay for their parents’ healthcare expenses. If we exclude older CPF members from the denominator, the proportion will be slightly higher, but it will still be around 5%. A total of $732 million was withdrawn from Medisave accounts in 2010 to pay for direct medical expenses. Of this amount withdrawn, 18% was withdrawn to pay for the parents’ treatment. Out of the total amount of Medisave withdrawn for the elderly’s healthcare expenses last year, about 45% was from their children’s Medisave accounts.
Sir, family support is an integral part of our healthcare financing framework. It is also an important second line of defence. But MOH is mindful of the burden and the responsibility borne by the younger generation in supporting the healthcare expenses of their elderly parents. The Government has from time to time provided top-ups to the Medisave accounts of the elderly. Between 2005 and 2011, nearly $1 billion was distributed to elderly Singaporeans this way. Workfare also helps older, low-income workers build up their Medisave by providing additional contributions over and above the normal CPF contribution rates. Nevertheless, I believe more can be done to help the elderly, especially those in the lower and middle-income families and we are exploring ways to help them.
Mr Gerald Giam Yean Song (Non-Constituency Member): Mr Speaker, just one supplementary question. Given that the Government has put forward this principle of self-reliance to Singaporeans, does the Minister feel that this situation, where a lot of elderly have to draw from their children’s Medisave accounts, is a departure from this principle of self-reliance, because the children will also have to build up their own Medisave accounts for the future?
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Mr Gan Kim Yong: Mr Speaker, I thank Mr Giam for the question. In fact, self-reliance is a very important underlying principle of our healthcare financing framework. But to ensure good health for Singaporeans, everyone has a role to play. Firstly, at the individual level, each one of us must take personal responsibility for our health. If we do not adopt healthy lifestyle, if we are not careful in our diet and eat laksa everyday and so on, I think no one can help us keep ourselves healthy. So, we have to take responsibility for our own state of health, and we also have to make it our personal responsibility to save up for rainy days, in case we fall ill one day.
But beyond the individual, family also plays an important role. Mutual support in the family will provide a second line of defence and this is part and parcel of our family values. This is what our society is about and it is important for us to continue to encourage mutual support within the family. We must not weaken that value.
And beyond the family, I think society, as a whole, also plays an important role. Just about three to four days ago, on Tuesday, I attended a concert called “Rays of Hope”. The concert was organised by the National Cancer Centre of Singapore (NCCS). The concert was to raise funds for the young cancer patients. I think the society also plays a role. The doctors come together, raise funds for their patients. This is another very precious value of our society that we should try to preserve and, of course, the Government itself will also play our role. In fact, we spent about $2.2 billion a year providing subsidies for our patients.
So, I think this is part and parcel of our broader sense of self-reliance. At the individual level, we try to achieve sufficient savings for ourselves. Beyond the individual level, the family achieves self-reliance through mutual support. And beyond the family, society as a whole achieves self-reliance by helping one another. The Government, at a national level, we achieve self-reliance by providing support for those who need it most.
Mr Gerald Giam Yean Song: Mr Speaker, I still remain concerned about the financial health of these children who have to fork out money for their parents’ medical treatment. I understand this principle in our values that we have to support our parents, but for those children who are from lower income backgrounds – is there additional help that the Ministry intends to provide to them, to assist them as they assist their parents, so that they do not have to draw down on their meagre Medisave accounts to be able to help their parents.
Mr Gan Kim Yong: Mr Speaker, for the lower income, whether they are older or whether they are from the younger generation which Mr Giam was concerned about, the Ministry does help them for their medical needs. First and foremost, we want to encourage as many of them as possible to stay on MediShield, which should provide a basic insurance to cover most of the medical expenses in hospitals. We have provided up to 80% subsidy for our B2, C class wards in hospitals which generally have larger medical bills compared to outpatient.
With the Government subsidy for the B2, C class wards, generally, the patients would be able to afford the B2, C class bills without out-of-pocket expenses, only drawing from the Medisave, MediShield and so on. Up to about 70% of them would have no out-of- pocket expenses. That means that they are fully covered, in one way or the other. Secondly, among those who have out-of-pocket expenses, the remaining 30%, about one-third of them, receives help from Medifund. So, we want to make sure that all Singaporeans whether you are in the high-income or low-income groups, whether you are old or young, will be able to receive medical treatment that is appropriate for them. We also provide financial counselling at the beginning to make sure that they opt for the right class of ward so that they can afford it. But at the end of the day, I think it is important for us to emphasise individual responsibility so that we encourage them to save sufficiently for their old age for their medical needs and if they do get into trouble, we have many ways to help them.
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Recently, I think the Prime Minister announced a series of initiatives to enhance our financial support for medical care, one of which is Primary Care Partnership Scheme (PCPS) which caters to the older and the lower-income Singaporeans to allow them to have subsidised care at the private General Practitioners (GPs). We have also enhanced the drugs subsidies at the hospitals and our polyclinics to ensure that the drugs will remain affordable to our lower income families.

Mr Gerald Giam Yean Song asked the Minister for Health what percentage of Singaporeans currently draw from their adult children’s Medisave accounts to pay for their own healthcare expenses.

The Minister for Health (Mr Gan Kim Yong): Sir, in 2010, there were around two million working Singaporean CPF members, of which 80,000, or less than 5%, used their CPF to pay for their parents’ healthcare expenses. If we exclude older CPF members from the denominator, the proportion will be slightly higher, but it will still be around 5%. A total of $732 million was withdrawn from Medisave accounts in 2010 to pay for direct medical expenses. Of this amount withdrawn, 18% was withdrawn to pay for the parents’ treatment. Out of the total amount of Medisave withdrawn for the elderly’s healthcare expenses last year, about 45% was from their children’s Medisave accounts.

Sir, family support is an integral part of our healthcare financing framework. It is also an important second line of defence. But MOH is mindful of the burden and the responsibility borne by the younger generation in supporting the healthcare expenses of their elderly parents. The Government has from time to time provided top-ups to the Medisave accounts of the elderly. Between 2005 and 2011, nearly $1 billion was distributed to elderly Singaporeans this way. Workfare also helps older, low-income workers build up their Medisave by providing additional contributions over and above the normal CPF contribution rates. Nevertheless, I believe more can be done to help the elderly, especially those in the lower and middle-income families and we are exploring ways to help them.

Mr Gerald Giam Yean Song (Non-Constituency Member): Mr Speaker, just one supplementary question. Given that the Government has put forward this principle of self-reliance to Singaporeans, does the Minister feel that this situation, where a lot of elderly have to draw from their children’s Medisave accounts, is a departure from this principle of self-reliance, because the children will also have to build up their own Medisave accounts for the future?

Mr Gan Kim Yong: Mr Speaker, I thank Mr Giam for the question. In fact, self-reliance is a very important underlying principle of our healthcare financing framework. But to ensure good health for Singaporeans, everyone has a role to play. Firstly, at the individual level, each one of us must take personal responsibility for our health. If we do not adopt healthy lifestyle, if we are not careful in our diet and eat laksa everyday and so on, I think no one can help us keep ourselves healthy. So, we have to take responsibility for our own state of health, and we also have to make it our personal responsibility to save up for rainy days, in case we fall ill one day.

But beyond the individual, family also plays an important role. Mutual support in the family will provide a second line of defence and this is part and parcel of our family values. This is what our society is about and it is important for us to continue to encourage mutual support within the family. We must not weaken that value.

And beyond the family, I think society, as a whole, also plays an important role. Just about three to four days ago, on Tuesday, I attended a concert called “Rays of Hope”. The concert was organised by the National Cancer Centre of Singapore (NCCS). The concert was to raise funds for the young cancer patients. I think the society also plays a role. The doctors come together, raise funds for their patients. This is another very precious value of our society that we should try to preserve and, of course, the Government itself will also play our role. In fact, we spent about $2.2 billion a year providing subsidies for our patients.

So, I think this is part and parcel of our broader sense of self-reliance. At the individual level, we try to achieve sufficient savings for ourselves. Beyond the individual level, the family achieves self-reliance through mutual support. And beyond the family, society as a whole achieves self-reliance by helping one another. The Government, at a national level, we achieve self-reliance by providing support for those who need it most.

Mr Gerald Giam Yean Song: Mr Speaker, I still remain concerned about the financial health of these children who have to fork out money for their parents’ medical treatment. I understand this principle in our values that we have to support our parents, but for those children who are from lower income backgrounds – is there additional help that the Ministry intends to provide to them, to assist them as they assist their parents, so that they do not have to draw down on their meagre Medisave accounts to be able to help their parents.

Mr Gan Kim Yong: Mr Speaker, for the lower income, whether they are older or whether they are from the younger generation which Mr Giam was concerned about, the Ministry does help them for their medical needs. First and foremost, we want to encourage as many of them as possible to stay on MediShield, which should provide a basic insurance to cover most of the medical expenses in hospitals. We have provided up to 80% subsidy for our B2, C class wards in hospitals which generally have larger medical bills compared to outpatient.

With the Government subsidy for the B2, C class wards, generally, the patients would be able to afford the B2, C class bills without out-of-pocket expenses, only drawing from the Medisave, MediShield and so on. Up to about 70% of them would have no out-of- pocket expenses. That means that they are fully covered, in one way or the other. Secondly, among those who have out-of-pocket expenses, the remaining 30%, about one-third of them, receives help from Medifund. So, we want to make sure that all Singaporeans whether you are in the high-income or low-income groups, whether you are old or young, will be able to receive medical treatment that is appropriate for them. We also provide financial counselling at the beginning to make sure that they opt for the right class of ward so that they can afford it. But at the end of the day, I think it is important for us to emphasise individual responsibility so that we encourage them to save sufficiently for their old age for their medical needs and if they do get into trouble, we have many ways to help them.

Recently, I think the Prime Minister announced a series of initiatives to enhance our financial support for medical care, one of which is Primary Care Partnership Scheme (PCPS) which caters to the older and the lower-income Singaporeans to allow them to have subsidised care at the private General Practitioners (GPs). We have also enhanced the drugs subsidies at the hospitals and our polyclinics to ensure that the drugs will remain affordable to our lower income families.

Author: Gerald Giam

Gerald Giam is the Member of Parliament for Aljunied GRC. He is a member of the Workers' Party of Singapore. The opinions expressed on this page are his alone.

3 thoughts on “Use of Medisave Funds to pay for Parents’ Healthcare Expenses”

  1. Excellent points.

    The key point in the answer is that the fully 45% of Medisave withdrawals for “elderly” Singaporeans medical expenses came from their children’s Medisave accounts. This is simply not sustainable with smaller famillies, rising healthcare costs and an ageing population.

    It is disingenuous to lump Medisave which is our own money with Medishield which is reportedly the world’s most profitable medical insurance scheme (according to Leong Sze Hian) and Medifund (which is a genuine source of help to the needy)

  2. If I am reading this correctly, out of $732M withdrawn from Medisave in 2010, 18% or $131.76M were spent on elderly parents’ medical treatment. Out of this 18% (or $131.76M), 45% or $59.292M came out of the children’s medisave accounts.

    Realistically, we are looking at $59.292M out of the $732M (or approximately 8.1% of Medisave withdrawals) coming from the children’s Medisave accounts.

    One factor we need to consider is the income distribution of these children’s Medisave accounts, as we will have scenarios of poor elderly parents with high / med / low-income children.

    An area of focus should be on the poor elderly parents with low-income children; we need to get a breakdown of the income of the children as a whole, then we can look at the adequacy of current social / government support for the low-income range.

    Another focus could be on the cost of medical treatment for these elderly parents, and compare that against the income of the children.

  3. Medishield as an insurance is not enough. There are alot of areas whereby a basic Medishield plan is not sufficient, and that patients will need to fork out additional cash, in terms of Medisave or cold hard cash. Be mindful, that the claims are subjected to deductibles and co-insurance.

    To be safe in coverage, one needs to purchase a private medical insurance from namely: NTUC Income, Prudential, Great Eastern, Aviva and AIA. However, as deductibles and co-insurance still plays a part, additional riders (which uses cash), are needed to be purchased in order to be considered “fully covered”. [not all riders covers co-insurance and deductibles]. Also bear in mind on the maximum claim limit per policy and/or per year.

    Medifund is to assist needy families with medical assistance in Polyclinics and Hospitals. However, the sandwich class (those whose income levels are slightly higher to be considered low-income, but are strained down by mortgages and cost of living), may or will not be fully funded. Hence, it is this group of people who are most likely to be in a crisis if anything happens.

    Overall, I understand the Government’s perspective in a making healthcare each Citizen’s responsiblity and not to drain public resources and funds (unlike the USA model). However, I think more should be done to assist and educate the public on the importance of healthcare.

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