The government has outlined a new insurance scheme for long-term care for Singaporeans with severe disability. Compared to the current scheme called ElderShield, the enhanced scheme, called CareShield Life, will have higher and lifetime payouts.
The government plans to implement CareShield Life in 2020. Those aged 30 to 40 in 2020 will be the first cohorts to join the scheme. Subsequent future cohorts will join the scheme when they reach the age of 30. The government will provide premium subsidies and financial support to ensure that the scheme is affordable and nobody will lose coverage because of an inability to pay.
Those born before 1980 can opt to join the scheme from 2021. The government is also looking into measures to encourage and support existing cohorts of Singapore residents to join CareShield Life.
CareShield Life is the result of recommendations made by a review committee on changes to the ElderShield scheme to better address the long-term care needs of the ageing population.
Differences from current scheme
Enrollment in CareShield Life will be compulsory, unlike the existing opt-out ElderShield scheme.
CareShield Life will provide lifetime coverage and higher payouts that increase over time — up from a current cap of six years.
The new scheme promises bigger initial cash payouts — S$600 ($447) per month instead of the current S$400.
The enhanced benefits will need to be supported by higher premiums. For the first five years of scheme implementation, payouts and premiums will both increase by 2% per year. Subsequent adjustments will be reviewed regularly by an independent CareShield Life Council.
Other details include:
- Permanent means-tested subsidies for lower- to middle-income Singapore residents: Up to two-thirds of Singapore resident households will be eligible for CareShield Life subsidies of up to 30%.
- Transitional subsidies for the first five years from scheme launch
- Additional premium support: For those in financial need who are unable to pay for their net premiums after premium subsidies, they can receive Additional Premium Support from the government.
The Ministry of Health predicts that about three in 10 Singaporeans will live a decade more after they suffer a disability, and 38% of ElderShield policyholders currently claim payouts for the full eligible period.
The government will also take over management of CareShied Life on a non-profit basis from NTUC Income, Great Eastern and Aviva, the three private insurers currently providing ElderShield coverage.
ElderShield began in 2002, paying out S$300 or S$400 a month to policyholders who cannot independently perform at least three out of six activities of daily living — eating, bathing, dressing, transferring (from the chair to bed, for instance), going to the toilet, and walking or moving around. The payouts last for five or six years, depending on when policyholders joined the scheme.