Singapore has a three-pronged approach to healthcare that comprises the programs Medisave, Medishield, and Medifund. These programs span either all or some portion of the healthcare needs of patients in the country. Medisave, like Obamacare, is a program that mandates that every household own a healthcare savings account into which the worker must contribute eight to ten and one-half percent of his annual income. And, like Obamacare, for the self-employed, the threshold for contributing is a very low $6,000 (Obamacare is $11,000). In 2016, median income for Singapore workers was $106K; consequently this would translate to a median contribution of $7,988 – $10,119 annually. Without consideration of income tax (approximately $7,000 for the median household in Singapore) a family is paying between $663 and $843 for routine healthcare coverage. In comparison, under Obamacare, the average American household is shelling out $440 a month under an employee plan and about $1,500 a month if self-insured.
Using the median annual income of $56,516 here in the USA for 2015, one can quickly see that the Singapore Medisave model would not significantly reduce the burden on the American worker as the requirements of such a plan would range between $377 and $471 monthly. Obviously, to obtain a premium reduction of $100 or more per month would require lowering the Singapore model percentages to somewhere between four and six percent. It would also mean that Americans would be receptive to such a mandated plan. The point here is that Medisave is a government program that mandates using a payroll tax to fund a healthcare savings account that can only be used in government –sanctioned situations.
The next tier in Singapore’s system is Medishield Life. Simply put, this amounts to catastrophic healthcare insurance for the individual. Enrollment, once again, is mandated, and (according to the tables listed on Singapore’s Ministry of Health website) annual premiums are as low as $55 for those 20 years and younger, increasing to a maximum of $855 at age 84. Under this program, governmental subsidies are doled out according to age and income class, with lower income participants receiving 5% more than middle income, who, in turn, receive 5% more than upper middle income. For context, upper middle income is defined as individuals earning $21,612 – $31,200. Moreover, any residency that is worth more than $13,000 will receive 10% less than the allowed subsidy, and any residency worth more than $21,000 will “not receive these subsidies.” A footnote adds that Permanent Residents will receive “half of the subsidy rates applied to Singapore Citizens.” So, even though the subsidy rates would appear generous (going from 15 to 25% at age 20—depending on income class—to 45 to 50% at age 90), it’s the fine print that tells the real story.
Medifund most closely mirrors our Medicaid system—a state-funded welfare program that supplies a safety net for those who are not assisted by Medisave or Medishield. However, there are a number of differences between the two. While we qualify for Medicaid support here in the USA on the basis of income and assets, Medifund is self-supporting in that it is funded by an endowment of $3 billion, but only the interest on that endowment can be spent. Should there by an economic crisis, this funding would be in jeopardy. Hospital boards decide who is indigent enough to require assistance. Although this brings to mind Sarah Palin’s death panels, less than one percent of applicants are turned away. No doubt such a plan has merit but we really have to stop and remember that our elected officials in Washington cannot keep their fingers off the money, thus any endowment would sooner or later be stolen. We only have to look at Social Security as an example of that.
So, in truth, to bring Singapore-style health insurance to America, we must suffer government intrusion by way of mandates that define health savings accounts, the amounts of which could change at the whim of the government; public ownership of most hospital facilities with the government deciding what equipment, procedures, and drugs are acceptable or covered, and we must sustain a tax base that will support catastrophic healthcare coverage for every individual. For a possible reduction in healthcare costs of $100 a month, is the loss of liberty worth it?
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