Parliament Highlights - 8 Jul 2014

MEDISHIELD LIFE DEBATE





MediShield Life gets MPs' backing
But some call for more subsidies while others raise worries about sustainability
By Salma Khalik, The Straits Times, 9 Jul 2014

THE proposed MediShield Life insurance received unanimous support from all the 13 MPs, including three from the Workers' Party (WP), who spoke on it in Parliament yesterday.

But some were worried the medical insurance for everyone for the rest of their lives cannot be sustained, while others called for more premium subsidies.

Other issues raised include the Integrated Shield Plans (IPs) that two out of three people have bought from private insurers, and duplication of insurance with company coverage.

The MPs made these points during the debate on the scheme, following Health Minister Gan Kim Yong's speech to start the debate, which will continue today.

Dr Chia Shi-Lu, head of the Government Parliamentary Committee (GPC) for Health, got the ball rolling by calling it a "bold move that promises to build a more equal and inclusive society".

But the Tanjong Pagar GRC MP is concerned whether it can remain both sufficient and sustainable, "given that both advances in health care and demand for health care can be unpredictable".

Dr Chia and several MPs also asked if premiums - which will remain unchanged for the first five years - can be kept affordable in the long term.

Fellow GPC member Tin Pei Ling (Marine Parade GRC) asked if the ministry will, if necessary, "take steps to mitigate the impact of the increased premiums" beyond the first five years.

Mr Zainal Sapari (Pasir Ris-Punggol GRC) urged the Government to "make clear distinctions with what is a 'must-have' and what is a 'good-to-have'".

Earlier, Mr Gan gave a summary of the report by the MediShield Life Review Committee led by Mr Bobby Chin, a former managing partner of international accounting firm KPMG Singapore.

It includes removing the lifetime claims cap, increasing benefits and retaining the deductible while reducing the co-payment amount people must pay out of their own pocket for hospital bills.

Mr Gan also raised the committee's concern on affordability of premiums after retirement, and agreed to people paying more in their younger years when they are still working so that they can get a premium rebate later in life.

He also promised to "revise Medisave withdrawal limits from time to time, to ensure they always fully cover the MediShield Life premiums".

Mr Gan assured the House that "those who need help with premiums will always receive support".

Nominated MP Mary Liew, while noting that the elderly and low-income workers have subsidies for their premiums, expressed concern for housewives and single parents. She asked the Government to help them.

Mr Gerald Giam, the Non-Constituency MP from the WP, asked for premium subsidies - which two out of three people will get - to be given automatically if they had been means-tested for other schemes.

He also asked for these subsidies to be pegged to health-care inflation so that their value "is not eroded with rising health-care costs and premiums".

Several MPs also spoke of IPs offered by five private insurers, which add on to the basic MediShield and is pegged at private wards or hospitals.

Mr Ang Wei Neng, (Jurong GRC) praised the idea of setting up a standardised IP for stay at a private B1 hospital ward.

He hoped more companies will "choose to pay B1 IP premiums for their employees" rather than have their own health insurance schemes which are not portable. The committee had recommended that firms support MediShield Life as a portable scheme.

Mr Gan also spoke of "strengthening incentives" to companies willing to provide portable medical benefits to their workers.

'Three things' can keep a lid on costs
By Salma Khalik, The Straits Times, 9 Jul 2014

THE key to a good health-care system is "getting the best outcome at the lowest cost possible", said Health Minister Gan Kim Yong yesterday, as he outlined what his ministry will do to achieve it.

In his opening address in Parliament for the debate on the MediShield Life Review Committee Report, Mr Gan said the hallmarks of a good system are that it achieves high quality, is cost-effective, accessible to all and sustainable for future generations.

This is why it is important to have patients co-pay big hospital bills as it "imposes discipline on both providers and patients to focus on the most clinically appropriate and cost-effective option".

If there was minimal or no co-payment, patients are more likely to consume more and providers would supply more but, he added: "More does not necessarily mean better."

Worse, the resulting higher costs will have to be paid for by everyone else, either in the form of higher premiums or taxes.

Mr Gan said his ministry will work with the community, health-care providers and insurers on the three things needed to keep a lid on health-care costs.

The first is to keep everyone healthy: "We will work with community partners to make healthy living as effortless as possible."

Next is to ensure health-care dollars are spent wisely: "Providers should not prescribe more costly tests and treatments simply because patients are covered by insurance, if these provide limited value."

Third is to manage the claims on MediShield Life insurance, which will cover everyone for life. This includes taking "a closer and harder look at charging practices".

Today, bills for hospital treatment for more common problems are already published on the ministry's website, so the public can compare the charges.

"The Government will do more," Mr Gan said.

It will work with the five insurers offering Integrated Shield Plans to share information on unusually large bills, and see if there is "a certain pattern of claims or behaviour by health-care providers".

To ensure MediShield Life is accessible to all, the Government will subsidise according to need, hence the amount of subsidy will be pegged at income or, where there is no income, on the annual value of a person's residence.

The new scheme also has to be sustainable or "our children's generation will be paying for the bulk of our health-care costs when we are old", he said.

Managing costs and keeping the national insurance scheme sustainable is the responsibility of the Government, insurers and patients alike.

The minister thanked the 11-member committee, some of whom were present in Parliament yesterday, for their hard work.

In conclusion, he said: "MediShield Life goes beyond health-care and insurance.

"It is a reflection of the kind of society we want to build: a more inclusive society where we pool our resources together to help the sick among us; and a more caring and progressive society, where those who are needy receive more help."

Bigger push for portable medical benefits
Tripartite group to look into getting more employers to get on board
By Andrea Ong, The Straits Times, 9 Jul 2014

A TRIPARTITE working group has been formed by the Singapore National Employers Federation, the National Trades Union Congress (NTUC) and the Government to look into getting more employers to shift to portable medical benefits built on MediShield Life, Health Minister Gan Kim Yong said yesterday.

The Government will also consider strengthening incentives to companies which are willing to provide such portable benefits to their workers, one of the recommendations by the MediShield Life review committee.

Mr Gan made these announcements in opening the parliamentary debate on the committee's report on MediShield Life.

In it, the review committee had called for employers and unions to work together to reduce the duplication of coverage between employer medical benefits and MediShield Life.

The minister noted these concerns as well as the worry that employees who rely on employers' benefits would lose such coverage when they stop working or retire.

He said MediShield Life provides an opportunity for stakeholders such as employers and unions to work together to better assure workers of lifetime medical coverage, not just for the duration of their employment.

While the 1 percentage point increase in employer Medisave contribution from next year will help, Mr Gan said more can be done to urge employers and employees to shift towards portable benefits built upon MediShield Life.

He said he is encouraged that the public service has taken the lead to raise its employer Medisave contribution to officers to help them pay for MediShield Life or Integrated Shield Plans.

"I hope more employers and unions will work together to do this for their workers," he said.

Yesterday, at least seven of the 13 MPs who rose to speak touched on the issue of portable benefits.

Most supported the need for these benefits to prevent duplication with MediShield Life, and had suggestions for how to get more employers on board, such as improving the messaging to companies and giving more financial help or tax exemptions.

While there are existing tax incentives for employers which switch to portable plans, the MediShield Life committee estimated that less than one in 20 employers offers such portable benefits.

Labour MP Zainal Sapari (Pasir Ris-Punggol GRC) noted that NTUC has been calling for portable medical benefits for several years.

However, the annual and lifetime claim limits set by the old MediShield scheme meant that many preferred to tap on their employers' benefits to avoid eating into their MediShield claim limits.

That will be less of an issue now as MediShield Life will have no lifetime claim limits and higher annual claim limits, he said.

Dr Chia Shi-Lu (Tanjong Pagar GRC), chair of the health government parliamentary committee, said companies could reimburse employees for taking up their own insurance plans or give additional Medisave contributions to help workers pay for premiums.

Non-Constituency MP Gerald Giam said companies can consider purchasing riders for their employees to cover the co-payment portion of medical bills so they will pay less out of their pockets.

Dr Lam Pin Min (Sengkang West) went a step further by asking if the Government should consider legislating portability, as the United States had done.

But Nominated MP Teo Siong Seng, chairman of the Singapore Business Federation, spoke up on behalf of businesses that prefer the flexibility to decide whether to adopt portable benefits.

Their own group medical benefits may be cheaper and also a way of attracting and retaining talent.

Puthucheary v Gerald Giam on MediShield reserves
By Andrea Ong, The Straits Times, 9 Jul 2014

A PEOPLE'S Action Party (PAP) MP and a Workers' Party (WP) MP have clashed for the second time over whether MediShield is storing too much in its reserves.

The exchange between PAP MP Janil Puthucheary (Pasir Ris-Punggol GRC) and WP Non-Constituency MP Gerald Giam yesterday continued from their face-off in May, when Parliament last sat to debate the President's address.

Rising to speak on the MediShield Life review committee's report, Mr Giam asked if the MediShield Life fund is setting aside too much for reserves.

This would come at the price of "excessive premiums to cater to an extremely unlikely, but catastrophic event", he said.

He pointed to requirements set by the Monetary Authority of Singapore's (MAS') Risk-Based Capital Framework, which regulates all insurance funds, as a gauge.

Mr Giam said MAS expects insurers to meet a capital adequacy ratio of 120 per cent. This ratio measures a fund's net assets against its total risk requirements.

The ratio of the MediShield fund at the end of 2012 was 165 per cent. The fund has set a target ratio of 200 per cent, which Health Minister Gan Kim Yong has said is in line with industry best practices. Mr Giam, however, said he did not see the justification for exceeding the requirements by 80 percentage points.

Dr Puthucheary later rebutted him, saying the 120 per cent set by MAS is not a target but a floor insurance schemes must operate above.

Many private for-profit companies operate with a capital adequacy ratio of 200 per cent or more to avoid putting their operations at risk, he said. "This is the correct thing to compare with."

In his speech, Mr Giam also cited the "very low" loss ratio of MediShield. Last year, he said, its medical loss ratio was 44 per cent, meaning that out of every dollar collected in premiums, just 44 cents were paid out in claims.

As he did in May, Mr Giam compared this to the United States' Affordable Care Act or Obamacare, where insurance companies must issue premium rebates to policyholders if their loss ratio falls below 80 to 85 per cent.

He also called for more actuarial data on MediShield Life, such as the Government's targets for the medical loss ratio, capital adequacy ratio and reserves.

But Dr Puthucheary later repeated his charge that Mr Giam had made a mistake in citing the US example. The ratio Mr Giam cited for MediShield was "a simple ratio between the premiums that are brought in and the claims that are paid out every year".

The Obamacare minimum loss ratio of 80 to 85 per cent includes not just direct claims but also the money put aside for unpaid claim reserves and contingent benefits, among other things, he said.

A more appropriate comparison in Singapore is the incurred loss ratio, which compares the premiums people pay with the claims that are paid out as well as what the MediShield fund will need to meet its future liabilities, he said.

MediShield's incurred loss ratio last year was 91 per cent, he said. The average over the last five years was 96 per cent.

Watch out for rising health-care costs, say MPs
By Kash Cheong, The Straits Times, 9 Jul 2014

MANY places with promising health-care systems have found themselves struggling with high costs and Singapore should not go down that road with MediShield Life, several Members of Parliament cautioned yesterday.

From Taiwan to Britain, the MPs noted, health-care costs are rising and the schemes are "surviving on borrowed time".

Dr Chia Shi-Lu (Tanjong Pagar GRC), chairman of the Government Parliamentary Committee for Health, said that social public health systems such as those adopted in Hong Kong or Britain appear attractive as most medical services are practically free.

But such systems are very expensive to maintain, he said, and can also be very inefficient.

Non-emergency services and highly specialised care can be quite severely rationed and of uneven quality, he said.

This has created "dual track systems" where private medical services are increasingly in demand and command higher fees, and also a problem of over-coverage.

Several MPs also pointed to Taiwan's National Health Insurance (NHI) scheme as a warning against overconsumption and how costs can spiral out of control.

Started with much fanfare in 1995, the NHI scheme sank into deficit four years later, "and has been sinking ever since", said Dr Chia.

Unlike MediShield Life, the NHI also covers outpatient care. This has encouraged patients with minor ailments to visit doctors often instead of self-medicating, and many were prescribed antibiotics even when they did not need any.

This has led to Taiwan having one of the highest numbers of clinic visits in the world per capita, and also high antibiotic resistance due to the overuse of these drugs.

Ms Tin Pei Ling (Marine Parade GRC) noted that these problems have led to the Taiwanese government having to borrow from banks to fund the NHI scheme.

The financing gap is widening in Japan too, she added.

In the United States, the national insurance programme known as Medicare is also fast becoming "unsustainable" because enrolment is growing faster than the economy.

Given these concerns, Non-Constituency MP Yee Jenn Jong and Dr Chia urged the Government to set up an independent panel to evaluate the cost-effectiveness of treatments before reimbursing them.

Britain's National Institute for Health and Care Excellence also evaluates the cost-effectiveness of treatments, Dr Chia said.

Health Minister Gan Kim Yong gave the assurance that financing would be kept sustainable through co-payments, where citizens foot part of the medical cost.

THE COSTS OF CHEAP HEALTH CARE

“This spawns dual-track systems where private medical services are in demand and can command increasingly exorbitant fees due to a lack of alternatives... This paradoxically leads to overcoverage: Citizens pay a premium in taxation to help fund the social health-care system, but yet feel compelled to purchase private insurance plans to obtain more choice with respect to treatment.”

- Dr Chia Shi-Lu (Tanjong Pagar GRC), on the costs of a system that provides minimally priced, or free, health care

GO ALL THE WAY

“The inclusion of pre-existing illnesses is a huge relief, and the 75 per cent government subsidy is generous. But why not go all the way and help those who are already ill and have paid the price of their illnesses all these years?... Their savings are depleted, and many are constrained in terms of their employment choices, prospects and earning capacity... This is not only a more impactful way of helping the disadvantaged, but also a way of levelling the playing field for them.”

- Ms Penny Low (Pasir Ris-Punggol GRC), on why higher premiums for those with pre-existing conditions should be waived

COMMUNITY’S MAJOR CHALLENGE

“The health issue in the Malay-Muslim community is still a major challenge... I hope that the Community Leaders’ Platform chaired by (Minister-in-charge of Muslim Affairs) Yaacob Ibrahim can encourage partners to work towards long-term plans to overcome these health challenges... With proper planning and effective implementation, the health issue in the Malay-Muslim community will move towards a positive situation. When this happens, it will be a contribution from the community towards the management of efficient health-care costs in Singapore.”

- Mr Muhamad Faisal Abdul Manap (Aljunied GRC), speaking in Malay, calling for a targeted response to tackle health issues in the Malay-Muslim community

TRADE PACT’S IMPACT ON GENERIC DRUGS

“There are fears that (the Trans-Pacific Partnership’s) new rules will strengthen the drug monopoly of big US pharmaceutical companies by altering patent laws in their favour... The MediShield Life review committee has recommended using generic drugs as far as possible to lower costs. We will need to guard against the TPP drastically changing intellectual property rules that may delay drugs from becoming generic.”

- Non-Constituency MP Yee Jenn Jong, on how trade agreements may pose a problem for drug costs

BUSINESSES’ CONCERN

“For the first five years, the Government has committed to providing subsidies so that MediShield Life premiums will remain affordable. This reduces the need for workers to look to their employers to bear the costs. But what happens after the transitional period ends?”

- Nominated MP Teo Siong Seng, urging the Government to maintain a pro-business environment with MediShield Life

New Bill makes it easier to help fight cross-border crime
Help can now be given to foreign authorities for more types of offences
By Ian Poh, The Straits Times, 9 Jul 2014

SINGAPORE has strengthened its commitment to the fight against cross-border crime by making it easier for the country to accept requests for help from foreign authorities.

A Bill was passed in Parliament yesterday to amend existing laws to expand the types of offences for which such help can be rendered.

This now includes all offences here that carry a maximum jail sentence of at least four years.

Also, the conditions that must be fulfilled before help can be given have been relaxed for some kinds of assistance, such as locating someone believed to be in Singapore.

Speaking in Parliament yesterday, Senior Minister of State for Law Indranee Rajah said the Mutual Assistance in Criminal Matters Act was enacted in 2000 against the backdrop of decreasing trade curbs and rapid globalisation. But there remains a need for effective international cooperation against international criminals who try to escape the law through jurisdictional loopholes, she said.

"The legislative amendments tabled today represent further strides to enhance Singapore's mutual legal assistance framework," she said before the debate on the Mutual Assistance in Criminal Matters (Amendment) Bill.

Mutual legal aid requests received by Singapore increased from 74 in 2012 to 114 last year, according to the Ministry of Law.

The law sets out various forms of assistance that Singapore may request from foreign countries, and vice-versa.

These include arranging for a person to travel there to give evidence, and activating domestic enforcement to help with search and seizure procedures.

The amended law allows for a more "calibrated" approach to the requirement of "dual criminality", which states that requests can be approved only for acts that also constitute an offence here.

This requirement is not needed now for "non-coercive" forms of help like locating persons; it applies only to "coercive" ones such as finding and seizing assets.

It does not apply in some cases involving foreign tax evasion, even if the help requested is considered "coercive".

More kinds of offences, beyond just those linked to money laundering or drug trafficking, are also covered. These include selected Road Traffic Act offences.

During the debate on the Bill yesterday, Mr Hri Kumar Nair (Bishan-Toa Payoh GRC) said it "significantly" widened the scope for cooperation between Singapore and other countries.

He said it complements the changes to the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act, an anti-money laundering law which was amended on Monday.

Proposed law to better protect, support families
By Ian Poh, The Straits Times, 9 Jul 2014

A BILL for a new law aiming to better protect and support families was tabled yesterday in Parliament.

The Family Justice Act seeks to do this by strengthening court infrastructure and enhancing court management processes.

Under the proposed law, a new Family Justice Courts will be set up to hear all family-related proceedings.

Comprising the High Court (Family Division), the Family Court and the Youth Court, it will have a central registry that will receive, assign and manage all cases for hearing.

The new courts will have a Presiding Judge, to be appointed by the President on the recommendation of the Chief Justice.

The Presiding Judge will be the most senior judge there.

He will also be a judge or judicial commissioner of the High Court.

For any proceeding that involves the custody or welfare of a child, the new courts can appoint registered specialists such as doctors, counsellors and social workers to assess the child so as to prepare expert evidence.

A Family Justice Rules Committee, chaired by the Chief Justice, will also be set up to formulate rules to regulate how the new courts operate.

Public transport emergency response project to cost S$6.3m
By Faris Mokhtar, Channel NewsAsia, 8 Jul 2014

A two-year public transport emergency response programme, which aims to enhance the capabilities of the Land Transport Authority (LTA) and public transport operators in responding to public transport incidents and emergencies, will cost S$6.3 million.

The project, called the Fusion AnalyticS for public Transport Emergency Response (FASTER) project, uses data from various sources including telecommunications, farecard and video data to determine commuting patterns. It can also analyse the impact of public transport incidents.

This information was revealed by Transport Minister Lui Tuck Yew in Parliament on Tuesday (July 8) in a written reply to Non-Constituency Member of Parliament Gerald Giam, who had asked details of the project's implementation as well as how much it would cost.

Mr Lui said that out of the total cost, the LTA will fund about S$2.7 million while IBM will bear the remaining cost of S$3.6 million. He added that research partners involved in the project will benefit in developing new capabilities, services and products.

The minister also said measures are in place to ensure strict confidentiality of data used. For instance, telecommunications data will be anonymised and cannot be used to identify individuals. He added that strict non-disclosure agreements have also been signed by the partner organisations involved.

S'pore current account surplus to GDP ratio one of the world's largest
By Mok Fei Fei, The Straits Times, 9 Jul 2014

SINGAPORE still boasts one of the world's largest current account surpluses in relation to its gross domestic product (GDP), despite the weaker global economic conditions.

Minister for Trade and Industry Lim Hng Kiang told Parliament in a written reply yesterday that the surplus declined from 23.7 per cent of GDP in 2010 to 17.5 per cent in 2012, before picking up to 18.3 per cent last year.

Mr Lim was responding to Nominated MP Tan Su Shan, who had asked about the Government's position on the declining trend of falling current account surplus to GDP ratio and whether this trend would reverse soon.

A current account measures the difference between a country's savings and investments, taking into account factors such as trade numbers.

Analysts see it as a way of taking stock of a country's economic health: A surplus indicates a nation is a net lender to the world; a deficit means it is a net borrower.

Mr Lim said the drop in the current account surplus between 2010 and 2012 was mainly due to a decrease in the trade surplus as net exports fell in line with the slowdown in global trade activity.

"Despite this moderation, our current account surplus to GDP ratio remained one of the highest in the world," he said.

Last year's upturn in regional and global trade meant Singapore's trade surplus also improved.

But Mr Lim highlighted that Singapore's current account surplus as a percentage of GDP is expected to gradually decline due to the ageing population.

"This is because of a slower accumulation of savings, even as investment spending continues to support our economic restructuring efforts and the upgrading of public infrastructure," he noted.

Nonetheless, he said, the value of the nation's goods and services export is expected to rise as the economy moves up the value chain and improves its competitiveness.

This in turn will help to ensure resilience in Singapore's trade balance and current account surplus over the medium term.

Mr Lim also gave the assurance that there is still "ample" domestic liquidity, citing three indicators. Firstly, he noted, the surplus in the trade and current account balance remains sizeable and continues to be a source of fund inflow into the domestic economy.

Also, interest rates have remained low over the same period; and finally, he said, his ministry has not seen any unusual flow of capital into and out of Singapore.