There are three legs of healthcare insurance that seniors should pay attention to. The first is acute care insurance – Medishield Life – that helps you with serious condition and treatment that normally require hospitalisation. Medisave and other government subsidies are intended to cover primary care that includes anything from cough and cold to management of chronic conditions like diabetes. The third leg is long term care for when you are severely disabled and need long term help for day-to-day living — this is where the current Eldershield 400 and the yet to be launched Careshield Life will be something you want to have.
Most seniors should already be covered by Eldershield unless you opted out. If you are not severely disabled, you are eligible to join ElderShield. While many complained that it is another way for the government to make you pay more, it is actually a good scheme at an affordable cost for long term care. The maximum payout for Eldershield 400 today is $400 per months for 6 years if you are deemed severely disabled. By today’s costs of living, this is clearly on the very low side and offers little protection. That is why Careshield Life will be launched in 2021 – and you should sign-up or upgrade.
- Careshield Life will pay $600 per month for life as long as you are severely disabled – there is no cap. And starting in 2021, the payout will increase by 2% per annum – the idea is to create a scheme that will keep pace with inflation.
- There is a cost for the additional benefit but it is minimal for the extra protection under the new scheme. The premiums will increase from Eldershield depending on your age bracket. But Careshield Life will probably be the most affordable long term care insurance you can buy in Singapore.
- To keep costs low, Careshield Life will be underwritten and managed by the Singapore government. Eldershield is now managed by private insurers – so the future Careshield Life administration and claims process will be better streamlined.
- To encourage all citizens and PR to sign up for Careshield Life, the government is offering incentives for those who sign up in the first two years of launch. Subsidies will reduce you annual premiums for 10-years and can be as high as $2500 for those born before 1960.
- If you opted out of Eldershield and want to join, you will be subjected to medical assessment by the private insurers and can be rejected. Come 2021, Careshield Life will be more lenient and will likely accept all who previously opted out as long as you are not severely disabled – without need for medical assessment.
- Like Medishield Life, the intent of the government is to be inclusive of all regardless of rich or poor. For those who cannot afford the premiums, there is means-testing to offer premium support or other financial assistance
There is no reason I can think of for anyone to not upgrade to Careshield Life — the additional $600 may not cover all your expenses should you become disabled, but it will help relieve some of the burden and you can count on the payout for life. As we grow older, the probability of needing long term care will increase even if you do not need it now.