CareShield Life: Government should not use market prices as a benchmark for policy premiums

Recently the press interviewed me on the Careshield Debate. I am adding my views to this debate by sharing my answers to the questions I was asked.

What are some possible reasons for the intense public reaction to the Careshield Life premiums, as compared to other gender-differentiated policies? For instance, CPF Life also has gender-differentiated pay outs.

There is a difference between CPF Life and Careshield – for CPF Life, the premium paid is the same for both genders while for Careshield there is a big difference in premiums to be paid. So, people are looking at the cost today versus a pay out some time in the future.

Despite there being obvious benefits in the future, for many the debate is much more intense because they may be sensitive to cost due to the already high cost of living and, so, any additional costs can be sensitive. Increasingly more Singaporeans are finding the cost of living beyond what they can afford comfortably.

What are the reasons behind why these economic or seemingly rational explanations do not seem to satisfy certain groups among the public?

While actuarially fair, there are 2 reasons why people are unhappy;
1) Since this scheme will be run by the government, and not a private insurance company, there are some perception problems. For one, people see the government as a service provider to serve all Singaporeans equally. Also, they do not think that the government should be making a profit from any schemes that they provide to Singaporeans.

So, they are not happy if they think that this is being run as a 100% market driven thing. In any case, the government has the capacity to do this, without it being market driven, and still not come out negative because the past scheme showed that the government collected $3b and paid out only a negligible amount in claims.
2) This is a compulsory scheme with an opt-out option. Some people are unhappy that this being a compulsory scheme is being is following market principles strictly, and that there must be some concessions made for a compulsory scheme.

In your view, what are the most compelling reasons (if any) for making the Careshield premiums gender-neutral?

I feel the government should make this scheme gender neutral for two reasons. First government is not a private sector company and government should provide some of these services to the public at concessions. The government source of revenue for Careshield and CPF Life and other such schemes is not just through the collection of premiums but also through the taxes Singaporeans pay and also from the returns of our sovereign wealth fund – these are all the peoples’ resources.

So as a government, some services should be provided at a subsidy because citizens are already contributing to government revenues in many other ways. There must be something called citizens’ privilege and having a gender neutral Careshield and equal CPF Life pay out may be the right thing for the government to do. Furthermore, based on past records, the government is net positive and not negative in the past.

Will the government succeed in convincing the public? How could the government have handled this better?

The government has a tough task to convince the public as the cost impact is very high. Especially some young Singaporeans who believe that they can take care of themselves and may not like a compulsory scheme that will cost them high.

The 2 possible ways the government could have handled this situation better:

1) Show Singaporeans what the actual cost of coverage is and then decide to have a permanent citizens subsidy to be below the actual cost with women getting a higher subsidy.

2) Government could have just averaged the cost of the genders and come up with one premium for both genders – for men slightly higher than what has been announced and for women slightly lower. This would have completely avoided the debate for a scheme that may actually be a very useful one for everyone in the future.

Bottomline is leaders should exercise greater political judgement in policy-making. The civil servants have presented to the political leaders a logical scheme based on what a market driven approach would look like.

But the government is not a company and we cannot apply what may seem logical in a market driven system to policies affecting the lives of citizens the government was elected to serve.

Our leaders need to be able to take what the civil servants present to them and fine tune whatever policy or scheme they want to implement to improve the lives of the majority of Singaporeans.

I see the debate on charging school teachers for parking in schools in the same context – the idea is logical, to have a clean wage system and the charges teachers have to pay are close to the market rates.

But in reality, schools are not public car parks, so market rates should not apply. So, we either charge teacher a token amount only or just don’t charge them. This requires political judgement.

I guess this government works on pragmatism more than politics but sometimes when it is the time to convince the public to buy-into a national scheme or idea, some political acumen never hurts.


*Facebook post by Inderjit Singh.

 

 

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15 Responses to “CareShield Life: Government should not use market prices as a benchmark for policy premiums”

  • Sounds Nice:

    So polite & politically correct arguement. But, who will listen and agree ?

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  • Stand Up and Speak for Us!:

    Can you stand as an Independent and make our voice heard loud and clear at the next Parliament?

    None of the White MPs dare raise the ‘disquiet’ of Singaporeans.

    All afraid to lose their posts?

    Talking online alone is never good enough!

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  • Kelvin Wang:

    Just opt out. I had done it for others.

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  • rukidding:

    More like “inside kosong liow”…and “finding ways” to ‘beef up” that “leak” !

    You are right,…they shouldn’t be using “market rate” and “hope” to “milk some $$$$” out of this scheme.

    As usual,….”their plans and proposal” always have “ulterior motive” behind these days !

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  • let us topple clown pap Ljs !!:

    Inderjit, you are a classmate of one of us. We know you. Engineering 1985.
    You can do it. Please join OPPOSITION coalition and topple the evil clown left behind by the evil lky who is justly today and everyday tortured in hell for the evil of lying when alive and leaving behind clown when dead.

    Inderjit, we all die one die, a matter of sooner or later. Today, while we are alive, we see this evil clown left behind by evil departed lky. We, together, can do it, if we put our minds to it. Let us do it. It is not for you, or for us. It is for our children, grandchildren and their offsprings.

    It can be done, Inderjit. Please join in. thank you.

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  • HarderTruths:

    Another ex-pappy. Can anyone believe him? He alludes there is nothing wrong with the money-grabbing policies for both CPF and Careshield, He believes the government should be transparent with the costs.

    Talk cock sing song.

    Either he shows he is with the people or not. I see just another pappy supporter not wanting to make waves but have his cake and eat it.

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  • Trust only myself:

    Kelvin Wang:
    Just opt out. I had done it for others.

    That is why they make it compulsory this time…..

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  • Bapak:

    We will kick PAP out. Indejit Singh should join Dr TCB. We will appoint you as the next Minister of Health. Then you change the system no point just talk and no action. PAP has been ignoring all the feedbacks. The only way is to kick them out.

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  • Hahaha:

    schools are not public car parks? If unhappy, resigned and joined a tuition agency also gotta pay parking fees what? And definitely more. Singapore no have slavery system. If teachers or any of the 140+k public servants (alleged as a ‘lean’ public service but in fact high cost) felt underpaid and overworked, just leave. gct ever said – Nobody owes anybody a living. Period

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  • Bapak:

    Careshield? Can opt out? Which one are you referring to, pls clarify? Good thing must share bro. Thank you.

    Kelvin Wang:
    Just opt out. I had done it for others.

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  • Rotting Society Citizens:

    NATO means No Action Talk Only. This is the common past-time of retired Ministers, MPs, NMPs and Civil Servants.

    It’s like a puppy that can only barks but has not teeth to bite.

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  • LIONS:

    Abolish GST for basics especially MEDICAL BILLS FOR SINGAPOREANS who are retired.

    Ageing population implies MORE FINANCIAL BURDEN ON MEDICALS N ITS ACCOMPANYING BIG BILLS N G$T.

    PAP DO YOU HEAR OR YOU JUST WANNA KWAI-LAN N BE SACKED NEXT GE!

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  • Bystander:

    have always admire Inderjit.
    Yes, stand up and be counted and fight for us, join the Opposition Coalition. PAP is getting too despicable, everything goes up in prices and costs, can’t convince us, resort to compulsion, by law, to suppress us.
    Enough is enough.

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  • dont be silly:

    Bystander:
    have always admire Inderjit.
    Yes, stand up and be counted and fight for us, join the Opposition Coalition. PAP is getting too despicable, everything goes up in prices and costs, can’t convince us, resort to compulsion, by law, to suppress us.
    Enough is enough.

    bayi is a businessman first, politician second.
    him join oppo coalition?
    wait long long lah.

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  • Stand as An Independent..:

    That’s the only way you can speak up for Singaporeans in Parliament.

    Singaporeans may even elect you as President after your good showing!

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