Commentary: Complex patchwork of Singapore’s healthcare system needs to be ironed out

SINGAPORE: Two significant changes to Singapore’s healthcare financing framework were announced in recent weeks: Adjustments of the means testing for healthcare subsidies, and the raising of MediShield Life premiums by as much as 35 per cent. 

The first announcement caused hardly a ripple, despite the Health Ministry maintaining that up to 1.1 million Singaporeans and Permanent Residents (PRs) would benefit from the changes that kicked in from Oct 1. 

The second, though, saw some consternation and confusion about whether this hike, set to take effect from April 2025, also applies to premiums for Integrated Shield Plans. (The answer is no, although it’s likely the private sector will follow suit, given that the moratorium on premium increases has expired.)

Even the MediShield Life Review Committee dwelt at length on public incomprehension when members were gathering feedback in its 2024 report: "Most participants had heard about MediShield Life but did not know that it was the national health insurance scheme. Many also did not have a good understanding of the scheme and its parameters."

Nevertheless, it says a lot for the trust people have in the state that on the whole, there was little public reaction to the changes.  

The average Singaporean tends to take the maths minutiae for granted. The most common questions we ask are also the most basic ones: “Can use MediSave?” or “Can MediShield cover it?”  Eyes are usually only opened when we’re confronted with a medical bill.

To be fair, wading through each new confusing stream of numbers requires, first of all, an understanding of how the healthcare system in Singapore works. It would be a wonder if anyone besides an industry expert could manage it, even if we tried.  

All the same, let’s try.

SINGAPORE’S HEALTHCARE FINANCING SYSTEM

In Singapore’s healthcare system, what you’re entitled to financially depends on several things, including the colour of your Community Health Assist Scheme (CHAS) card (if you’ve applied for one), the amount in your MediSave, what generation you belong to, whether you have private insurance, and so on. 

It also depends on how your household fares under the means testing framework of monthly household income per capita. This is sometimes known as the national means testing framework, which also applies to social and educational help programmes. 

That’s where the latest changes make a difference to how much financial help you get with your healthcare needs.

Here’s a quick primer.

First, some healthcare subsidies are entitlements - they’re for every citizen and PR, with more for the pink IC holder. These include hospitalisation in C and B2 ward classes, specialist outpatient clinics and polyclinic outpatient treatment. Now this entitlement has been extended to some types of palliative care for the terminally ill. 

For hospitalisation, whether in acute or community hospital, anyone can choose the cheapest option which has the greatest amount of subsidies, regardless of age or income. 

But to prevent overconsumption by those who can pay their own way, means testing is employed for different income bands. Those with per capita household income below S$2,100 will get the topmost 80 per cent subsidy, while those in the highest income tier with more than S$3,600 will get at most 50 per cent.

These changes don’t require any work on the individual’s part. The “system” automatically churns out new numbers as and when you need healthcare treatment. 

Second, other subsidies come with means tests that would disqualify the better off. Individuals must apply for these, like the Home Caregiving Grant or Seniors’ Mobility and Enabling Fund. 

If there is no household income, the annual value of the property comes into the picture, dissected into different levels. Housing and Development Board (HDB) households would make the mark, but not all private homes - a bugbear for retirees who live on landed property. (The October changes did not mention property values.) 

The irony of this is that it makes better financial sense for the elderly to live on their own. In this demographic, a retiree with no working adult living with them in an HDB flat is best placed to get the greatest subsidies. 

Third, compulsory insurance programmes like MediShield Life and CareShield Life are a whole different category. Premiums are drawn from individual MediSave accounts depending on age bands, with the younger folks paying less than older.

The assurance is that as premiums go up, so will subsidy levels. There’s also the promise of MediSave top-ups from the government. 

PATCHWORK OF POLICIES

If you’ve made it through all that, you’d likely agree that Singapore’s safety net for healthcare is strong, but patchworked. Policies and schemes seem to be continually added one on top of the other with overlaps, different eligibility criteria and changing terms. 

It’s a never-ending game of catch-up, and the rules are always changing.

On the outpatient front, for example, some drugs and chronic ailments are more heavily subsidised than others, but it’s a “dynamic” list due to medical improvements and changing patient profiles. Then there are MediSave withdrawal limits that do not depend on how much you have in your MediSave account. 

Another conflicting cluster in the patchwork: For stays in acute and community hospitals, there are seven income bands with subsidies from 50 per cent to 80 per cent. But at Specialist Outpatient Clinics, treatment subsidies are divided into five bands with the highest income level, tagged at S$7,000, getting a subsidy of at least 30 per cent. 

Come January 2026, a deductible for outpatient fees will be included on top of co-payment, which will no longer be 10 per cent across the board but levied in graduated form. How will this new patch be sewn on top of the rest? 

NUANCED OR CONFUSING?

Over the years, attempts have been made to simplify this patchwork. A start has been made with acute and community hospitals - which makes the new elements in outpatient fees puzzling. 
 
It’s tempting to suggest that the whole system be torn down and built up again based on just one or two principles. 

But in healthcare, there are too many factors at play that are sometimes contradictory, like an individual’s ability to pay and a citizen’s right to care options for the best possible clinical outcomes. With finite national resources, the state is caught between promising a basic level of healthcare for all, while ensuring that the most money goes to those most in financial need.

That calculus also includes the increasing involvement of the private sector and community-based organisations, which can claim government subsidies, even as they offer different service standards and charge different rates. 

Another example: Private insurers that offer Integrated Shield Plans tagged on to MediShield Life. The result is differences in insurance premiums, types of coverage and choice of doctors and medications - a boon for the discerning consumer, but a mess for the masses. 

With health insurance, cost and, perhaps, time taken for claims to be paid out are really the only things a layperson can immediately grapple with. Already, there are calls for government intervention and regulation in this market. 

The combination of state subsidy, choice, checks and competition makes the system even more complex. 

From an administrator’s point of view, our healthcare framework would be “nuanced”. To a consumer looking for help, the word would simply be “confusing”. 

It’s simply too difficult for us to comprehend all its working parts, even when we try. We simply have to trust, willingly or unwillingly, that someone somewhere is looking out for our interests in getting the help we’re eligible for. 

Far easier and more convenient to bestow trust on institutions - and grumble only when the bill arrives. 

Bertha Henson, a former journalist, is the author of When Mama Fell, an e-book available for free reading at www.whenmamafell.com. This article was adapted from the last chapter of the book.