“If left unadjusted, payouts would cover a smaller portion of these costs over time,” the ministry said, noting that this is why the council recommended doubling the annual growth rate.
Singapore’s annual national long-term care expenditure has almost doubled from S$1.7 billion to about S$3 billion in the last five years, MOH noted.
“This is as more seniors require long-term care, with an ageing population. Costs are also increasing, due to evolving care needs of the population and inflation, driven by manpower and technology costs. Some of these trends are structural in nature, and likely to persist in the future,” the ministry said.
Among those who develop severe disability, half would stay in that state for at least four to five years, while three in 10 could remain in that state for 10 years or more, said MOH.
HOW MUCH WILL PREMIUMS INCREASE BY?
Premiums will need to increase to sustain the higher payouts, MOH said.
There will be a one-step increase in premiums in 2026 and they will then grow at 4 per cent each year. This is needed because CareShield Life premiums are only collected for a limited duration while the scheme’s payouts are for life, the ministry said.
From 2026 to 2030, those enrolled in the scheme will see their premiums increase by an average of S$38 annually, up to S$75 each year, said MOH.
To keep premiums affordable, the council recommended that the government provide transitional support to policyholders.
