The Business Times, Wednesday 14 August, 2002
What they say
Ministry of Health spokesperson:
'It is better for Singaporeans to join ElderShield when they are still young and healthy. They may not be able to join at older ages, as by then they could develop pre-existing disabilities which would make them ineligible.
'Joining early allows a person to pay lower premiums as he is able to spread his premium payment over a longer period. The risk-pooling element allows for affordable premiums and also for underwriting to be waived.
'The premiums are level premiums with a pre-funding feature. This means policyholders pay more than their health risk at their younger years, so the extra they pay now goes to pay fund the older-age premiums as they grow old.'
Patrick Lim, Life Planning Associates:
'I think the ElderShield benefit is too small. And my chances of dying are much greater than of suffering those disabilities. Putting in a death benefit will make the scheme more palatable.'
Michael Lee, Cornerstone Planners MD:
'People may die before they are hit with the failure of three ADLs. Or after a year with three ADLs. It will be good if there is a death benefit. Then everyone definitely makes a claim. But as it stands, if you die without a claim you just contribute to the pool.'
Mark Myerson, i-Benefits:
'People may gripe that the $300 monthly benefit is not enough. They're right; it isn't. But you have to buy that first $300 of cover from somewhere. It may as well be from ElderShield since it has been tendered out effectively and there is no underwriting. Buy a top-up if you need more.
'The question isn't whether $300 is enough. You can say MediShield isn't enough. So should you opt out? No - for the same reason - it's cost effective and there is purchasing power to squeeze the insurer.
'I'd definitely say long-term care isn't the first priority for many, but since its easily available, why not? If I was in ElderShield, I'd take the single-premium option. I'd be more than happy to pay and even if I never claim, I'd have peace of mind. I'd buy a top-up later but I wouldn't miss this opportunity at all.'
Joseph Chong, New Independent:
'ElderShield's benefit is meant to be basic. It's not meant to be enough. Of course, it's not enough.
'In private schemes, underwriting is key. ElderShield has no underwriting, but how do you quantify that as a plus? We have a client who was rejected from a private scheme. He's not disabled but he had diabetes and hypertension. And that's enough to say you can't get in.
'How sure are you that you won't get hit with severe disabilities tomorrow? The principle of insurance is risk pooling. You share the risk immediately. It never makes sense for people to self-insure unless you have so much money. Then you're not a candidate for ElderShield. But in any case, the money isn't coming from cash. It's from MediSave, and you can't take that money out. MediSave itself is a self-insurance fund. The government is letting you convert it into true-blue risk pooling, and people lose sight of that.
'We have no interest in promoting ElderShield . . . It just irritates us that people are dropping out and the arguments don't make sense.'
Isaac Low, First Principal group manager:
'I'd tell people to stay in the plan. The average Singaporean, male or female, is expected to spend a third of his or her life with a chronic disability. And you can't compare the ElderShield premiums to an annuity. You can't buy any annuity based on the premiums at $200 or even $500 a year.
'You may say fine, I'll just leave the money in MediSave. But what if you get hit tomorrow? If you think you can save for yourself and self-insure, fine. But is that a better way to manage your risk, or should you transfer the risk? If it's a catastrophic risk, even though it's a small chance, you should transfer it. In this case the risk is catastrophic.
'The amount covered is small, but it's a basic plan. The government wants to keep it simple. Everyone is in. Given the constraints, this is as good as it gets.'
