Wednesday, March 20, 2013

Medisave depleted by Medishield

My mum is a homemaker all her life. Folks like her do not have much retirement savings. Likely, many seniors like my mum could be better off without CPF Medisave a/c and Medishield coverage.

My mum has been paying cash for her health care expenses and has never once touch her medisave nor make any claim on her Medishield. Currently her medisave a/c is depleted by her Medishield as the premium has been increasing by leaps over the years.

She was influenced by my aunts who are 'PAP believers' with blind trust in our govt. They told her it is to her benefit to have a CPF a/c so that she could 'benefit' from govt top-up to CPF members' a/c. This normally happens when CPF policies change, whereby they 'demanded' more money from its members. So the govt would 'lighten' the burden with top-ups.

My mum has been putting money in her CPF a/c for more more than 2 decades in order to receive the occasional govt  top up. Then in 2001, the govt enticed elderly to put more money in their CPF, by encouraging them to be covered under Medishield.

As usual, their tactic is to give peanuts in return for walnuts. So they covered the 1st year premium of $132. My mum at that time was 69. We innocently thought that the premium was reasonable basing on the starting premium amount. By 2006, her Medishield premium has went up to $375 - which is more than 100% increase.

Last year (2012) it was $615. Then the bomb shell this year! Her premium for 2013 is $1123 - which is 82.6% increase in just 1 year! She has only $600+ in her medisave which is not enough to pay for her Medishield premium. As usual, because of the change in CPF policy, the govt will be giving top-up this year, which for her is $400. But there are a number of conditions attached to the top up which is to make sure you have to put more money into the CPF a/c first.

CPF gleefully send her a letter telling her to top up again. She will not be given the govt medisave top up of $400 until her Medishield is renewed. They make sure the $400 top up which could have help to offset her shortfall, is only given after extracting more money from her first.

Besides, the $400 is to 'help' offset premium increase over 2 years. So effectively, it is only $200 per year. What is $200 when the premium has shot up by $508!

She has been transferring money from her meagre life savings into her CPF all these years. Now after being covered by Medishield for 12 years, she has no money in her Medisave.  Elderly like her is better off holding on to their cash which they have full control over. Putting them in CPF only means 'can see but cannot touch'.  If an elderly is unable to keep putting money in CPF, they will be left without Medishield coverage in their critical years.

For this group of seniors, they should have kept away from CPF with its web of complicated policies, which most of them cannot understand.  CPF is as hungry as a wolf for money and is a bottomless pit, always demanding for more money from its members with perpetual changes in policy and all sort of 'new' schemes (CPF Life, Eldershield...etc,etc).

Elderly with little savings and no family member could easily see their retirement dried up and disappear once they get entangle with CPF. Like a spider web, there is NO escape for its victim.

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