We are heartened that Mr Yan Shun Cai is considering the adequacy of his MediSave for future healthcare needs.
The Basic Healthcare Sum (BHS) is an estimate of the savings needed for the member’s basic subsidised healthcare expenses from age 65 onwards. The BHS for CPF members below the age of 65 is adjusted annually, taking into account the latest trends in MediSave use, policy changes and healthcare inflation.
Upon turning 65, the BHS for each cohort will be fixed for the rest of their lives. $66,000 was the BHS for the cohort which turned 65 in 2022. As Mr Yan is 53 years old this year, his BHS will only be fixed when he turns 65.
The premiums for MediShield Life and CareShield Life are fully payable by MediSave. For Integrated Shield Plans (IPs), MediSave can be used to pay for the private insurance component of IP premiums, but this is capped by annual withdrawal limits ranging from $300 to $900.
In sum, Mr Yan may have underestimated his BHS and overestimated the amount of MediSave that would be withdrawn to cover his IP premiums, as he did not take into account the withdrawal limits. We would like to reassure Mr Yan that the BHS is sufficient for basic subsidised healthcare needs from age 65, and we revise this every year to ensure it remains adequate.
It would not be appropriate to set the BHS based on IP premiums, given these are optional products that cover more than basic healthcare. As premiums could rise significantly with age, in deciding to buy or renew an IP, one should consider their ability to pay premiums over the long-term, including the amount of cash outlay.
MediSave contributions above the BHS are transferred to the member’s CPF Special or Retirement Accounts to avoid over-savings in the MediSave account and supplement the member’s retirement payouts. The CPF Special or Retirement Accounts have interest rates equal to or higher than the MediSave Account, and payouts can be used for healthcare needs if necessary.
We thank Mr Yan for his feedback, and will continue to review our healthcare financing policies to ensure they remain relevant.
Lydia Loh (Ms)
Director (Finance Policy)
Healthcare Finance Division
Ministry of Health
终身健保和终身护保的保费可以由保健储蓄全额给付。至于私人综合健保双全计划（Integrated Shield Plan，简称IP），保健储蓄可用来支付私人保险部分保费，但年度提款顶限是300元至900元。