Medisave limits tweaked; standardised Integrated Shield Plan to be out next year

FROM January next year, the Medisave Contribution Ceiling (MCC), which is the upper limit on Medisave savings, will be renamed the Basic Healthcare Sum to be in line with the Central Provident Fund (CPF) terminology.

Health Minister Gan Kim Yong on Thursday told Parliament that the tweak is also meant to reflect that the sum is estimated based on what is needed for basic subsidised healthcare needs in old age.

"Any additional Medisave contributions beyond this amount will continue to be channelled to your Retirement and Special Accounts, and eventually, increase your CPF Life payouts," he said.

The new Basic Healthcare Sum will be set at S$49,800 from January 2016. This is a 2.7 per cent increase over the current ceiling amount of S$48,500 set last year.

And beyond 2016, Mr Gan said the Basic Healthcare Sum will be adjusted annually to keep pace with the growth in Medisave use by the elderly as life expectancy and healthcare expenditure increase, and Medisave uses expand.

Another change is that the ministry will remove the Medisave Minimum Sum (MMS).

"This means that you will no longer be required to use your CPF monies to first top up your Medisave account to the MMS when you apply to withdraw your CPF at age 55. You only need to follow the withdrawal rules as explained by the Minister for Manpower earlier," said Mr Gan.

The move follows MP Chia Shi-Lu's suggestion that the government consider adjustment to the existing MMS and MCC, which Mr Gan agreed with.

On the subject of the Integrated Shield Plan (IP), Mr Gan said his ministry has been working with the insurers to come up with a standardised IP, based on coverage at Class B1 wards.

This standardised IP will be introduced in the first half of 2016, after universal healthcare scheme MediShield Life is rolled out this year.

This would give Singaporeans time to better understand and adjust to MediShield Life before changes to the IPs are made, Mr Gan said, adding that most Singaporeans use Medisave to pay for MediShield and IPs.

And since every IP policy comprises two parts, Mr Gan said it is timely to consider restructuring the Medisave Withdrawal Limits (MWLs) for health insurance premiums into two components.

"Today, the MWLs apply to the total IP premium, combining premiums for MediShield and the additional private insurance coverage. Singaporeans are not aware of how much Medisave is being used for MediShield and how much is directed towards the additional private insurance component.

"With MediShield Life, we will give Singaporeans more certainty, by ensuring that Medisave will always be allowed to cover the net MediShield Life premiums after additional premiums if any, and subsidies. There is therefore no need to set a limit for this component. Beyond this, there will be an Additional Withdrawal Limit, or AWL, that will apply to the premium for additional private insurance coverage only."

Details about the new AWLs will be available later this year.