COMMENT Malaysians working in Singapore will likely face higher medical costs due to changes in policy that will see a slashing of rates for permanent residents (PR), while foreigners are no longer eligible for subsidies.

singapore orchard road 031106 For example, Singaporeans used to receive an 80 percent subsidy for hospitalisation in a C class ward, while PRs received 70 percent.  

On 1 July 2010 however, the subsidy for PRs was slashed to 65 percent and by July 2011 it will go down to 60 percent, amounting to a 16.7 and 33.3 percent rise in hospitalisation costs respectively.

In the past both citizens and PRs enjoyed the same subsidy, so comparatively by 1 July, 2011 the increase for PRs is effectively 100 percent.  

Foreigners like Malaysians receive no subsidy. This means that a Malaysian on a work permit, S-Pass, employment pass or long-term visit pass, may have to pay up to 3.33 times more than a Singaporean.

And while Malaysians who have a Central Provident Fund (CPF, the island’s equivalent of Malaysia’s EPF) Medisave account can use the funds for overseas hospitalisation, for example at 12 approved Malaysian hospitals, the catch is that they have to do so through two approved healthcare providers in Singapore.

This appears to apply even to Malaysians who are at the moment living outside the island state.

Disclosure needed

Conspicuously missing from the media reports on the matter was whether Medishield, which is the CPF medical insurance scheme available to CPF holders, will be extended to cover hospitalisation in Malaysia.

ambulance medical service 100907 stabilize Medishield as well as private insurers’ CPF approved medical insurance plans currently do not cover overseas hospitalisation, except in cases of medical emergencies.

The proposal to extend Medisave to overseas hospitalisation was first mooted about a year ago, and one wonders why in all that time no consideration was given to coverage and hospitalisation in Malaysia, considering the number of Malaysians who make up the Singapore work force and who have CPF savings.

The media has reported that the new scheme, with more healthcare providers approved and more people utilising it, will result in over 50 percent cost savings. However, will this result in less claims and higher surpluses for the Medishield scheme?

What we need is disclosure of the amounts of claims and the surpluses of the Medishield scheme now, so that studies can be made into whether premiums can then be gradually reduced and whether surpluses can be used to offer benefits like periodic health screening, which will undeniably reduce medical costs in the long run due to early detection of health problems.

Medisave limits can also be reviewed to take into account the risks and inconvenience faced in using overseas hospitalisation. Currently, Medisave limits are insufficient to cover increasing medical costs in Singapore and patients end up forking out more from their own pockets.

The current system burdens those who are considering treatment in Malaysia with the additional dilemma of weighing their choice against a Singapore hospital, which may exceed the claim limits imposed by Medisave.

Only short-term solution

Allowing Medisave to be used overseas in Malaysia may just be a short-term, partial solution to the problem of rising healthcare costs in Singapore. Ultimately, Singapore has to consider spending more on healthcare than the current four percent of GDP, of which I believe only about two percent is public spending.

In contrast, Malaysia's healthcare spending was 2.2 percent of GDP in 2008, with private healthcare spending at 2.6 percent.

By the way, medical costs in Singapore have gone up again. A media report says that between 2008 and 2009, hospitalisation bills increased three percent for Class B1 wards and 10 percent for Class B2.

As lower income Malaysians generally opt for the cheaper B2 wards, it appears that the rising hospitalisation costs are affecting the poor more than the rich.  

LEONG SZE HIAN'S late father moved from Kuala Lumpur to Singapore in 1952-53. Since he was born in Singapore in 1953, there may be some confusion as to whether he was conceived in Malaysia or Singapore. His next article will be on the implications of CPF (Central Provident Fund) policy changes for Malaysians in Singapore.