(Delivered in Parliament on 10 July 2018)
As many Singaporean families can attest, financing of long-term care is costly. This is unlike hospitalization for emergencies or acute conditions, requiring a person to be in the hospital for a relatively short period of time. Once the acute stage has passed, a person usually requires some step-down care for a number of years. This can be unaffordable to families, necessitating a broad-based financial support scheme.
To this end, I agree that Eldershield in its current form is not adequate. Eldershield was designed to cover “severely disabled” persons, defined as persons unable to do at least three of the six activities of daily living viz. washing, dressing, feeding, toileting, walking and transferring. With this strict qualification criteria, the persons eligible to make Eldershield claims are those who face significant costs of treatment, care and medications. The current payouts of $300 to $400 per month are too small to give families the peace of mind they need.
Today’s debate is important, as CareShield Life is an opportunity to demonstrate our values. As we battle inequality and disturbing signs of an economic class divide, new policies for risk-pooling and mutual support will be increasingly necessary. In this regard, it is comforting to read in the Eldershield Review Committee’s Report (at page 33) that a respondent told the Committee that he did not mind paying more premiums as “we are all a society”.
Mr Speaker, we in the Workers’ Party support in general the rationale for CareShield Life. Nevertheless, there are certain aspects of the proposed scheme that appear to us to be more controversial. For instance, for a compulsory scheme, have the premiums been set too high, based on assumptions that are debateable? To ensure greater confidence and buy-in to the scheme, how transparent will the process of setting premiums and payouts be? These and other issues will be covered by my other colleagues.
For my part, I shall focus on two aspects of particular concern:
First, the eligibility criteria for claims i.e. how disabled must a person be before being able to make a claim?
Secondly, the premiums being differentiated by gender i.e. why should women be asked to pay higher premiums?
How disabled must a person be to make a claim?
Since CareShield is going to be a compulsory disability scheme, all Singaporeans born in 1980 or later will be making mandatory contributions for 37 years, from age 30 to 67. To justify such a national draw of Medisave savings, CareShield Life must be meaningful. CareShield Life must kick in to provide financial support to our citizens in times of disability.
Under the current proposal, CareShield will adopt the same eligibility criteria used in ElderShield. This worries me.
The assessors will have to determine whether a potential claimant is disabled enough as to not be able to do at least three of the six activities of daily living. How strict is the assessment? Here I wish to share the experience of one of my residents, who has since passed away.
This resident, Mr K, was suffering from an advanced stage of kidney failure and already had his leg amputated earlier due to diabetes. The insurer later decided to discontinue Mr K’s Eldershield benefits as the insurer’s panel doctor had assessed that he could perform all of the six activities of daily living “although partially”. When I appealed on his behalf for a re-assessment, the insurer wrote back to him to fill up another claim form. Meanwhile he was admitted to a hospice. When I saw him there, he requested me to write to the insurer to say that he would not be filling up the form as he was in the hospice. Eventually, his daughter filled up the form, and I understand that the hospice doctors assisted to get his Eldershield benefits restored. But within a month, he was dead.
Mr Speaker, I do not know what rigorous standard is applied to determine if a potential ElderShield claimant is disabled enough. When I read about the ElderShield premiums in the billions that have been collected over the years, it struck me how Mr K and his family have apparently been abandoned in their time of need. Is the experience of Mr K an aberration? If this is going to be the experience that will be carried over to CareShield Life, it would be unacceptable.
I am concerned that the “3-ADLs test”, which will exclude disabled persons facing high medical and care costs, would leave them in a lurch. By the time a person is unable to do 3 ADLs, one is in dire straits. One is either headed towards a nursing home or needs someone to provide care full-time. Before one reaches this stage, if Careshield can give some payouts, then it is likely that the disabled person can continue to be looked after at home with some part-time help. The payouts will fulfill a very important gap, to enable the disabled person to age in place and not tie up another nursing home bed.
Is CareShield not a good time to review the 3-ADLs test? Why not use a test of inability to perform 2 ADLs instead?
I note from Annex B of the Committee’s Report that under the long-term care scheme in Germany, persons can claim if they are assessed to have at least some impairment to independence on physical and mental conditions, with payouts which are tiered.
Mr Speaker, earlier Minister in moving the motion said the government will encourage those born before 1980 to opt in to CareShield Life. In this regard, if a 2-ADL test or some more flexible disability test is adopted for CareShield Life payouts, then more of the older cohorts currently on Eldershield may also be incentivised to join CareShield.
I would like to emphasize the point that CareShield Life will be a compulsory scheme, and young Singaporeans will have to pay 37 years of premiums. With this looming fact in mind, CareShield must have meaningful coverage, and my view is that the “3-ADLs test” needs to be reviewed and readjusted to serve this end.
Why is CareShield making women pay more?
It has been proposed that premiums for CareShield Life be differentiated by gender. Women will be asked to pay higher premiums, because, as the Committee says at Chapter 8, women have a longer life expectancy and have higher risk of severe disability. Yet, the Committee insists that CareShield Life’s features are “universality” and “risk-pooling”.
Could the government clarify whether there is any other country with compulsory long-term care insurance that discriminates premiums by gender? In any case, Mr Speaker, it is up to the government to decide whether this recommendation of the Committee should be adopted. After all, deciding whether to set premiums as gender-differentiated or on a unisex basis is taking a stand on our society’s values.
The Committee writes that having gender-differentiated premiums is needed to ensure that CareShield Life “remains sustainable regardless of the mix of men and women who join”. But for a compulsory scheme, where every birth cohort will be included, does this argument, of not knowing the mix of men and women who will join, hold water?
I refer to a 2010 article by Nicholas Barr, Professor at the London School of Economics, entitled “Long-Term Care: A Suitable Case for Social Insurance”. [2010] 44 (4), Social Policy & Administration, pp 359-374. Professor Barr agrees that to finance long-term care needs, using compulsory social insurance rather than optional private insurance will better cushion citizens from risk and uncertainty. On the issue of women living longer, however, Professor Barr argues that social insurance schemes for long-term care should NOT take this into account. He offers several reasons for this: “first, if the insurance is mandatory, there is little or no distortionary effect from charging men and women a premium based on joint probabilities….; second, there are obvious political difficulties from imposing on women a significantly higher contribution rate than men…; and finally, the use of unisex tables can be defended as a simple value judgment”.
So, what are our judgements and values?
In addition we must also recognise the fact that many women give up their careers and personal ambitions to do unpaid caregiving for their families, services which the families would otherwise have to pay for. A 2017 report by the Ministry of Social and Family Development (Insight Series Paper No 4/2017) found that women are much more likely than men to remain outside the labour force for family-related responsibilities. The younger women between 30 to 39 years old cited childcare as the main reason for not working, while females aged 60 and above cited housework and caregiving responsibilities as the main reason for not working.
Married women often provide care for their husbands, delaying or even preventing the men’s progression to becoming disabled. When husbands need long-term care, wives are there. Daughters, and daughters-in-law too, often step up to the plate. By so doing, many women have lower CPF balances than men.
What signal do we send to our mothers, wives, sisters and daughters by requiring them to pay higher premiums, while expecting them to do more caregiving for free? It seems that the opportunity costs to women are being repaid by higher premiums for CareShield!
If we talk about risk-pooling within each generation, with each generation paying for itself, is it too much to ask to risk-pool between the genders and use unisex tables for premiums?
Conclusion
I have stated my general support for the principle underlying universal and compulsory long-term care insurance that the CareShield Life scheme represents. I have, however, raised two issues which I believe are critical to the Scheme’s success namely, whether the qualifying “3 ADLs test” is too rigid and onerous, and asking for the premiums to be set on a unisex basis if the scheme is truly to be universal and inclusive.
The CareShield Life proposal has much potential to be a strong social safety net for our people. This is a great opportunity which should not be squandered.