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National Health Services for Expats in Singapore

Submitted: April 2014

In Singapore, healthcare is not free unless you are an insured person. Even if you are, co-payments will likely need to be paid, but these co-payments are primarily designed to deter overuse of the healthcare system.

That being said, the Government intervenes at many levels, including notably:

  • Subsidised medical bills
  • Mandatory social insurance
  • Price controls, and
  • Residual, tax-financed social assistance programmes.

The system's overall purpose is to achieve affordability while favouring individual responsibility.

Under Singapore's social insurance scheme – the Central Provident Fund (CPF) – all Singaporean citizens and Singapore Permanent Residents (SPR) must be enrolled. Foreign nationals without SPR status are not required to sign up for CPF coverage.

The health component of social insurance in Singapore is commonly referred to as the "3M" system, because of its three pillars: Medisave, MediShield, and Medifund.

Medical subsidies

Medical subsidies are the first level of Government intervention in Singapore. Under this scheme, up to 80% of your medical bills are paid by the Government. Typically, SPRs get subsidy rates about 20 to 25% lower than Singaporean citizens. Subsidy rates are means-tested since January 2009, and they are applicable only:

  • For Singaporean citizens or SPRs, and
  • In Class C and class B2 hospitals, day surgery and specialist clinics, and certain other services.

An overview of the subsidy rate structure may be found here.

Medisave

Medisave and the Central Provident Fund

Medisave is a contribution-based scheme that may look like social insurance programmes of many other countries, except that contributions are paid into a Medisave account. Accordingly, the scheme will not pay for medical bills in excess of your original contributions.

Medisave is part of the four CPF-regulated accounts, namely:

  • the Ordinary Account (OA) – for housing, investment, education and CPF premiums
  • the Special Account (SA) – for retirement planning
  • the Medisave Account (MA), and
  • the Retirement Account (RA), which combines your OA and SA savings as you turn 55.

It should be noted that the combined CPF contribution rates gradually decrease once you are aged 50 or over. This is because the Government first expects you to save towards housing, then retirement, then healthcare, the first two being much more expensive than the latter.

At the beginning of your career, employers pay 16% while employees pay 20%. Once you are aged 65 or over, employers pay 6.5% whereas employees must pay 5%. Due to Singapore's growing social security needs, these rates are regularly reviewed on the upside. In the 2014 budget, the Government has proposed to raise them further with effect from 2015.

Mandatory CPF contributions generally attract tax relief.

Do you need to have a Medisave account?

All employees in Singapore are automatically enrolled for Medisave, and contributions to Medisave are deducted from gross pay. The Medisave contribution rates vary depending on the employee's age, but they range from 7 (below 35) to 9.5% (over 50). Rebates may apply for employees earning less than SGD1,500 per month, and there is CPF contributions do not apply on the part of your salary exceeding SGD5,000 per month.

There is no requirement for the self-employed to sign up for Medisave unless they earn at least SGD6,000 based on their profits made in the previous year.

Medisave account features

The maximum balance you may have on a Medisave account – the Medisave Contribution Ceiling (MCC) – is SGD45,500. Any amount in excess of the MCC is transferred to the individual's social insurance account for pensions. See FINANCIAL – Pensions for Expats in Singapore.

Any funds in the Medisave account attract risk-free, Government-guaranteed interest. Typically, the rate tracks the Singapore 10-year Government bond yield (currently 1.5%), plus 1%, which is already high by Singaporean standards. There is a 4% floor, but there is no guarantee this floor will stay indefinitely. In September 2013, the Government announced that Medisave accounts would keep the 4% floor until 31 December 2014.

Further to this, there is an additional 1% interest for the first SGD60,000 you hold in your aggregate CPF accounts. For Ordinary Accounts, the additional rate is only applicable on the first SGD20,000.

Medisave withdrawals – medical bills

Funds may be withdrawn for hospital care and certain expensive outpatient services, e.g. if you have a chronic illness, that you or your family members need. It should be further noted that all individuals aged 55 or over are required to keep a minimum balance – the Medisave Required Amount – of SGD38,500 at all times.

More information on the eligible services for a Medisave withdrawal can be found here.

Medisave withdrawals – other circumstances

It is possible to withdraw your Medisave funds in the event of:

  • Death
  • Permanent disability
  • Permanent departure from the Singapore and West Malaysia area, providing you give up your Singaporean citizenship or SPR status
  • Residence in West Malaysia – for Malaysian citizens only.

MediShield/ElderShield

MediShield is an insurance plan designed for expensive treatment resulting from long-term or major illnesses. ElderShield, on the other hand, is designed to insure against the financial risks of severe disability. Premiums for Shield plans may be paid from your Medisave account, and it's possible to opt out from MediShield.

In practice, many Singaporeans choose to sign up for an enhanced cover through Integrated Shield plans or ElderShield supplements. These are subject to higher premiums, but they allow for treatment in the private sector or Government hospitals whose classification is B1 and over.

Medifund

Medifund is a tax-funded programme, which is designed to help the neediest Singaporean citizens or SPRs with their healthcare bills. Technically speaking, it is a SGD200m endowment fund, whose interest income (SGD3m) pays for Medifund subsidies. Part of this SGD3m is dedicated to the Medifund Silver programme, which aims at helping individuals aged over 65.

Medifund is designed to provide social assistance to individuals who cannot afford healthcare, despite the above mentioned schemes. This programme has only a residual scope.

 

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