Wednesday, October 23, 2013


Ross Douthat and Reihan Salam have both inched a bit closer to endorsing some sort of partially socialized solution to America's health care system with Salam mentioning Singapore.  I was a bit surprised to learn that someone at AEI wrote favorably about Singapore's social welfare system back in 2008:
Medisave, which covers about 85 percent of all Singaporeans, is a component of a mandatory pension program. Employees typically pay 20 percent of their wages into the Central Provident Fund (CPF), while employers pay 13 percent. (Since 1992, the self-employed have also participated.) At the beginning of 2007, CPF had over $1 billion in surpluses.

Medisave accounts can be used to pay directly for hospital expenses incurred by an individual or his immediate family. Limits are in place on the extent of Medisave funds that can be used for daily hospital charges, physicians’ fees, and surgical fees. The idea is to cover fully the bills of most patients in state-subsidized wards of public hospitals. Beyond that, individuals dip into their own pockets or use benefits from insurance plans (see more on this below). Medisave can also be used for expensive outpatient treatments such as chemotherapy, renal dialysis, or HIV drugs.

Medishield, the second part of the program, is a national insurance plan that covers the higher cost of especially serious illness or accident, which in Singapore’s system is described as “catastrophic.” Singaporeans can choose Medishield or several private alternatives, some offered by firms listed on the Singaporean stock exchange. Premiums for the insurance plans, including Medishield, can be paid using Medisave accounts.

Medifund, the third part, was established by the government for the roughly 10 percent of Singaporeans who don’t have the means to pay for their medical needs, despite the government’s subsidy of hospital and outpatient costs. The fund was set up in 1993 with $150 million, with the budget surplus providing additional contributions since then. Only interest income, not capital, may be disbursed.

Finally, there’s Eldershield, an addition to the 3M structure that offers private insurance for disability as a result of old age. It pays a monthly cash allowance to those unable to perform three or more basic activities of daily living.

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