Reserves can’t use for healthcare – what have we been using?

medisave

From a cashflow perspective – are we spending any money on healthcare?

I refer to the article “Reserves cannot be further tapped for healthcare: PM” (Straits Times, Mar 5).

It states that “Singapore cannot draw more from its reserves to fund healthcare spending in the future, as this will quickly deplete its nest egg, said Prime Minister Lee Hsien Loong.

The needs of an ageing society are beyond those of “a rainy day”, he said. “It is an ‘everyday need money’ day. We will need to spend more on healthcare every year, year after year, for many years to come.”

In this connection, Singapore’s public healthcare  spending as a percentage of GDP, at just about 2.5 per cent ($9.8 divided by $400 billion), is probably the lowest in the world.

Singapore workers contribute” up to 10.5 “percent of their wages to mandated savings accounts (Medisave account) that may be spent on health care” and “insurance””.

This is I believe is in a sense from a cashflow perspective – probably the highest national health insurance contribution (pre-pay basis) in the world.

From a cashflow perspective – the Government  may still not be spending any money on healthcare, as total annual Medisave contributions plus the annual interest on total Medisave accounts’ balances may exceed total annual government spending on healthcare and withdrawals for medical expenses and insurance premiums.

Leong Sze Hian

 

 

About the Author

Leong
Leong Sze Hian has served as president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), invited to speak more than 200 times in over 30 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of Indonesia and Brunei. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.