By Salma Khalik
A new long-term care insurance, called CareShield Life, will be launched in 2020, and will be compulsory for everyone aged 40 years and younger in that year. The Government has promised financial help for people from lower-and middle-income households, and for those who have trouble paying the premiums.
Here is what you should know about this new scheme:
Q I already have MediShield Life. Why do I need CareShield Life?
A MediShield Life insures you for high hospital bills or expensive medical treatments such as for cancer.
CareShield Life is to help you financially should you become severely disabled and require long-term care. The payout is in cash every month so you may do what you like with it, such as employing a helper, or offsetting the cost of daycare.
Q How do I get payouts?
A To qualify, you must need help in doing at least three of the six activities of daily living (ADLs). These are bathing, dressing, eating, toileting, transferring such as from bed to chair, and moving from room to room.
You need to get a qualified healthcare worker such as a doctor, nurse, physiotherapist or occupational therapist to certify your status.
It is free the first time you do an assessment. But if you are found to not need help with at least three ADLs and need to do another assessment later, you need to pay the cost of it. If you are deemed to need help with three ADLs, you will be reimbursed the fee by CareShield Life.
Q How much payout will I get if I need help with three ADLs?
A The payout will depend on the amount in force at the time you make your claim. In 2020, it is $600 a month. Once you start claiming, you will continue to get the same amount every month so long as you remain disabled.
If you become severely disabled after the age of 67, you will get the payout in force when you were 67 years old, in other words, the year you paid your last premium. There is no time limit for how long the payouts are given.
Q What can I use the payout money for?
A Anything. The cash is yours outright.
Q Why can't I pay the whole premium amount in one lump sum, like those on ElderShield can?
A With ElderShield, the payout amount is fixed at $300 a month for up to five years or $400 a month for up to six years, depending on the scheme you are on.
With CareShield Life, the payout will increase over time to offset the higher costs of care in the future. The amount of increase may vary, so it is not possible to know, upfront, the total amount of premium that needs to be paid.
Q Why do I have to pay higher premiums as I get older? Current ElderShield policyholders pay the same amount every year.
A The premiums to be paid will depend on the payouts, which will increase over the years, as well as the amount of claims made against the scheme. Inflation is also a factor.
If more claims are made than anticipated, premiums will have to go up to keep the fund solvent. On the other hand, should the claims made be less than expected, then the increase in premiums may slow down.
Q Do I get higher payouts if I start making claims at an older age?
A The payout amount is not age-based. It will go up annually based on the year in which you first make a claim. Two people of different ages making their first claim in the same year will get the same monthly payout.
However, the payout for people older than 67 will be pegged at the payout amount in the year they stop paying premiums, at the age of 67.
Q Am I entitled to premium subsidies? And if so, how much?
A There are three levels of permanent subsidies:
•30 per cent if you are from a household with per capita monthly income of $1,100 or less.
•25 per cent if it is between $1,101 and $1,800.
•20 per cent if it is between $1,801 and $2,600. If you still cannot afford to pay the premiums, the Government will make up the shortfall for you. There will also be transitional subsidies for Singaporeans that range from $70 in 2020 to $30 by 2024. Those who join in 2020 will get a total of $250.
Q What happens if I don't have enough money in my Medisave to pay the premium even with the subsidy?
A You may use the Medisave savings of a family member, such as your child, to pay the premium. You can also pay in cash.
If those options are not possible for you, you will be means-tested and if you qualify for subsidies, the Government will pay the outstanding amount for you.
Q I am already on ElderShield. Can I switch from ElderShield to CareShield Life?
A Yes, but only from 2021. You will need to top up your premiums to switch to CareShield Life. Those who had opted out of ElderShield may also join. Details of how this can be done will come later. However, people in these groups who are already severely disabled will not be able to join CareShield Life.
Q What happens if I already need help with three ADLs before I'm 30 years old? Am I excluded?
A No, CareShield Life is an all-inclusive long-term care insurance, so no one will be left out. You will need to pay the first premium at the age of 30 to join the scheme.
Since you already require help with three ADLs, you will be able to collect the monthly payout the same year. Once you start collecting the payouts, you no longer need to pay any premiums.
Q If I don't live in Singapore and have no intention of returning, can I opt out, as I have done for MediShield?
A No, CareShield Life is compulsory for all Singaporeans and permanent residents. It does not matter if you do not reside here. If you need help with three ADLs, you will be given the payout which is in the form of cash.
MediShield Life is different as it pays for treatment that has to be carried out here.
Q Can I buy supplement plans to get higher payouts, as is possible with ElderShield?
A Yes. Plans that add an additional amount to the monthly payouts will likely be available from private insurers.
Differences between ElderShield and CareShield Life