Subsidies can be on graduated scale: Khaw
Under means-testing scheme, difference can be just one percentage point
By CHEN HUIFEN
HEALTH Minister Khaw Boon Wan yesterday revealed that the differentiated subsidies for patients with varying incomes could be calibrated on a graduated scale under the means-testing framework his ministry is working on.
And that scale could be narrowly divided, such that the difference in the proportion of subsidy received by two adjacent income brackets could be just one percentage point apart.
‘For example, today’s Class C is 80 per cent (subsidy level),’ explained Mr Khaw. ‘So for those who are classified as low income, they will continue to enjoy 80 per cent (subsidy).
‘And if we decide that it should be reduced to 65 per cent for high income, then in between, we can just have a very graduated scale. In fact with computerisation, it’s no big deal. We can have one percentage point difference. So you have 80 per cent, 79 per cent, 78 per cent … until 65 per cent, if we decide that 65 per cent (will be the Class C subsidy) for high income (earners). So that way, we don’t have big jumps.’
Speaking to some 500 grassroots members and leaders at a dialogue session in Ang Mo Kio yesterday, Mr Khaw tossed out the possible subsidy caps for the high-income in the different class wards. He said feedback received so far seems to suggest that the reasonable subsidy level for this group is around 65 per cent subsidy if they choose Class C, and 50 per cent for Class B2. These compare with 80 per cent for Class C and 65 per cent for Class B2 today, regardless of their income level.
The audience was largely concerned with the fairness of the means testing system. Mr Khaw stressed that the means-testing framework has to be based on a simple affordability assessment due to the acute nature of hospitalisation. This is why he chooses to use personal income as the assessment tool, rather than household income.
While he agrees with most that the means testing system currently used in nursing homes is ‘more correct’, the suggested assessment tool for hospitals is predictable, less cumbersome and less intrusive. ‘I’m going for simplicity. And because of simplicity, I need to err on the side of generosity. At nursing homes, we have plenty of time to evaluate, collect all kinds of audited information, then the thoroughness will remain.’
That generosity could be extended to retirees who are likely to be assessed on their housing type. He pointed out that they may have less funds in their Medisave because the scheme was only implemented in 1984. The government is mulling over retaining current subsidy levels for this group, except for the very well-off - say, those whose annual property value is at the top 20 per cent. They will have to be subjected to means testing.
Even with the implementation of means-testing, the government will continue to invest heavily in healthcare to cope with the ageing population and higher expectations of patients. Mr Khaw estimates that his ministry will be spending an average of $200 million a year over the next 10 years to expand capacity.
Source : Business Times - 14 Jan 2008
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