All About CareShield Life

What is CareShield Life?

CareShield Life was launched on 1 October 2020 for all Singapore Citizens and Permanent Residents (PRs), to replace the previous ElderShield scheme. See launch report here – MOH: Launch of CareShield Life & Medisave Care Here is a quick overview of what this national long term care scheme is about:

• All Singapore Citizens and PRs are automatically enrolled when they reach 30 years old.
• Similar to MediShield Life, CareShield Life is a compulsory scheme.
• Covers for pre-existing conditions and disabilities.
• Annual premiums are paid through Medisave.
• Pays out $600 a month if you are severely disabled – by definition, if you are unable to do at least 3 out of the 6 Activities of Daily Living (ADL). More on this later.
• Premium and pay out increases by 2% every year. This percentage will be reviewed every 5 years. However the pay out will not increase further when there is a claim.
• Pay out is for lifetime, for as long as you remain severely disabled.

Who is this for?

The first group of CareShield Life policyholders were enrolled on 1 October 2020 for those who are aged between 30 and 40 on the launch date. Subsequent new entrants will be automatically enrolled into this program when they turn 30 years old. Here are the breakdown:

• First group who were auto-included are born between 01 Jan 1980 to 01 Oct 1990
• Subsequent enrolment – 30 years old birthday
• Auto-conversion at end-2021 will be done for existing ElderShield 400 policyholders who are born between 1970 to 1979. However, this is subject to current health conditions. Members of the existing ElderShield 400 program will receive a notification of the conversion after it is done. If members would like to opt out of it, they have up till end 2023 to inform MOH of reverting to the ElderShield 400 program and they will receive the refund of the excess premium paid.

What is it about?

CareShield Life is a long-term care plan that covers for severe disability. Being severely disabled is defined as not being able to perform at least 3 out of the 6 following Activities of Daily Living (ADL): washing, dressing, feeding, toileting, mobility and transferring.

These are the definitions for the respective activities that we do everyday.

1. Washing
   The ability to wash in the bath or shower (including getting into and out of the bath or shower) or do a sponge/bed bath.
2. Dressing
   The ability to put on, take off, secure and unfasten all garments and, as appropriate, any braces, artificial limbs or other surgical or medical appliances.
3. Feeding
   The ability to feed oneself food after it has been prepared and made available.
4. Toileting
   The ability to use the toilet or manage bowel and bladder function through the use of protective undergarments such as diapers or surgical appliances if appropriate.
5. Mobility
   The ability to move indoors from room to room on level surfaces.
6. Transferring
   The ability to move from a bed to an upright chair or wheelchair, and vice versa

Worrying Statistics about Long-Term Care

As Singapore has an ageing population coupled with lower than expected birth rates, it is important to look at how severe disability could impact the society as a whole, and how this could potentially put a strain on Singapore’s financial systems.

According to a report released by the ElderShield Review Committee in 2018:

• 1 in 2 healthy Singapore residents aged 65 today could become
  severely disabled in their lifetime.
• About 3 in 10 could remain severely disabled for 10 years or more.

Elsewhere in a recent report and projection done:

• By 2030, the number of resident Singaporeans 60 years of age and older with one or more ADL limitations requiring human assistance is projected to be 82,968 persons.
  • Of this number, 38,809 (47%) are estimated to have one or two ADL limitations,
  • and 44,159 (53%) to have three or more ADL limitations

With the increase in longevity due to medical advancement and technology, compounded by low birth rates, the lack of long term care finances does pose a significant social issue.

Why do we need it?

According to a study conducted in 2019, a single elderly above 65 years old needs $1,379 every month to meet the basic needs.

For seniors aged 55 to 64 years old, the monthly amount needed is $1,721.

This amount only caters for the basic needs, and it has not factor in long term care costs if seniors were diagnosed with severe disability.

Source: TODAY – Singapore seniors each need at least S$1,379 monthly to meet basic needs

If we were to take that into account, it would include an additional amount of about $1,200 for long term care, medication, treatments and other miscellaneous costs today.

The fees for nursing homes ranges from about $1,200 to $4,500 a month before Government subsidy, in which the amount is subjected to means testing. This is where things get tricky for most middle income earners, where the high and long term fees may dry up their savings as subsidy may not be sufficient for the long term.

The above cost illustrations are for today, but what about the future, after taking into account economic and medical inflation? Rising labour costs and inflation are a real threat to the value of our money.

CareShield Life – Is it foolproof?

Long-term care is a real risk when we are in our later years, especially as I witness how my late paternal and maternal grandmothers were in their later years. My paternal grandmother was taken care of in a nursing home for a few years before she passed on, and my maternal grandmother was taken care by a domestic helper for more than 10 years. It is fortunate that they have many children to take care of them (more than 8 of them chalking out money every month to support the expenses).

Compared to a typical size of a nuclear family today, how are we going to take care of ourselves in the future where most families generally have one or two children? And even so, are we going to burden them with this additional costs, where it will be tough for them to even take care of themselves in the future?

How about for some of us who do not have children or are single? Other than ourselves, who else can we depend on?

What about the scenario in which we suffer from a major disability that robs us of the ability to perform one or two out of the six ADL, where we will not receive any pay out from CareShield Life? In this case where help is equally important, especially if we are unable to perform two out of the six ADL, who can we get the financial assistance from?

Is the basic coverage from CareShield Life is enough? With a starting $600 per month pay out now, we are already falling short of the $2,000 + that we need for monthly subsistence and additional costs for long term care.

The above are some other considerations that we have to think through for ourselves now that the basic coverage is done for us.

Overall, I’m glad that the government is giving the ElderShield a revamp. The flexibility that this plan has is the ability to progressively increase the payout in future, depending on trends and claims experience. As this is a compulsory scheme, the government ensured the inclusiveness of everybody by setting a suitable coverage and premium as a baseline, while allowing the rest of us to ‘upsize’ our coverage by utilising our Medisave to partially/fully fund for it. You can find out more about the supplement plans here.

To find out about the other types of insurance that can complement your portfolio, I’ve done up a video explaining the Four Types of Insurance.

Disclaimer: Information written is to my best knowledge as per the date posted and has no legal rights. It represents my personal opinion, which may be different from yours, and that’s totally cool. It is important to read the policy contract and documents for the full terms and conditions. This post does not constitute a recommendation. Please seek professional advice before committing to a plan as it is a long term commitment.