Rising Medisave Contribution

With reference to TODAY, Medisave contribution may have to go up to cover the costs of long-term nursing care, said Health Minister Khaw Boon Wan.

The rationale is due to the current contribution rate of 6.5 to about 9 per cent being not enough to cover both big medical bills and long-term care costs.

The first inkling of this came back in February 2009. In his speech on ‘Preparing for Silver Tsunami’, the Health Minister spoke on how we need to construct the equivalent of the 3Ms for the long-term care sector.  The 3Es are: Eldersave, ElderShield and ElderFund (The 3Ms refer to our medical care financing approach where Singaporeans save regularly in Medisave, while MediShield ensures efficient risk pooling and Medifund provides the ultimate safety net for the needy).

Currently, Medisave is allowed (with limits) to take care of some long term care issues via its Chronic Disease Management programme.

Where will the additional contribution come from? Employee and/or employer or from sub-division of the existing total CPF contribution? I believe the verdict will be out soon enough.