How does Singapore’s healthcare system stack up against Obamacare?

[ORIGINAL ARTICLE: http://www.btinvest.com.sg/insurance/health-insurance/how-does-singapores-healthcare-system-stack-up-against-obamacare/]

Publication Date: 28 Feb 2013

Author: Travis Jone


Singaporeans have the benefit of a successful public health insurance scheme through the MediSave, MediShield, MediFund and ElderShield programs. Experts in other countries have designated Singapore as a model to be emulated  when reforming their own national healthcare systems. This is certainly true in the country with the highest medical costs of any place in the world, the United States.

On February 13, the US government released its plans to expand the Patient Protection and Affordable Care Act (also known as Obamacare) that was enacted by President Barack Obama in 2010 by establishing healthcare exchanges that will act as hubs for people in each state to compare qualified health insurance plans and prices. These exchanges are expected to create an even greater degree of competition among insurers, keeping premiums low and educating consumers of their options. Obamacare ultimately is a system in which private insurance companies can provide coverage to Americans, but it must be within a government mandated framework, and the government will be providing its own alternative insurance plans to keep insurance companies honest..

Since medical insurance can allow people with relatively little income to pay for very costly medical treatments, even if they don’t have full-time employment, it’s easy to see why it would be advantageous for some to participate in a system similar to Obamacare, rather than the ‘spend-what-you-save’ model used by MediSave. For this reason, it’s a good idea to examine which system is better for Singaporeans and why.

Inside the US, opponents of Obamacare have cited several aspects of Singapore’s healthcare system that they believe make it the superior option: First, having citizens and employers save and fund a majority of an individual’s healthcare keeps government healthcare costs low. Next, Singapore spends only a fraction of its budget on healthcare compared to the US. Also, Singapore does not have nearly as many restrictions on which doctors and facilities patients can use. This puts major healthcare decisions in the hands of the individual. Furthermore, many Singaporeans still have private medical insurance to protect from catastrophic illness in addition to their MediSave savings. The main problem that Obamacare opponents would have against the Singapore system is that is doesn’t allow an individual the freedom to opt out of MediSave, but mandatory participation is still present in Obamacare itself.

The US state that was the basis for much of Obamacare, Massachusetts, has been facing large increases in healthcare costs within the state, while Singapore’s healthcare cost increases are lower than most other countries. These low costs, in turn, make MediSave’s 6% income withholding,  more effective at covering an individual’s medical fees. Thus, with the high costs of care in the US, a higher percentage of income may need to be set aside if a MediSave style system was adopted.

From many American’s perspectives, Singapore has a great model for addressing a nation’s medical needs. Singaporeans should rest assured that the system that their government has put in place now has a proven track record of success relative to other developed countries. Whether or not the system works when implemented into a economy and population as large as the United States’, however, has yet to be seen.


THOUGHTS:

  • Why is it important to talk about Obamacare vs Singapore’s Healthcare System
    • The Trump administration is threatening to repeal the Affordable Healthcare Act (colloquially termed “Obamacare”) which has the potential to leave thousands of Americans without health insurance. The system of mandatory health insurance under Obamacare is very similar to Singapore’s Medishield Life scheme, hence there is value in comparing both systems to evaluate the pros and cons of each.
  • Comments on Article:
    • Unfortunately this author only refers to Medisave, which is only one part of the 3M framework we have in Singapore (SCS yo!). This means that the author potentially does not have a holistic understanding of the Singaporean healthcare system, making this comparison kind of iffy.
    • Medisave and Obamacare are honestly very different schemes. While Medisave is a mandatory savings account, Obamacare is mandatory healthcare insurance for all. Hence, comparing the two is like comparing an apple with a pear to determine which tastes more like an orange.
    • Rather, the author could compare Obamacare to Medishield (Medishield Life was only introduced in 2015, hence at time of publication it did not exist). Since, both are mandatory governmental insurance schemes.
    • The author also claims that our system is a  ‘spend-what-you-save’ model, which is not entirely true. The final M: Medifund, actually provides subsidies and grants to low income Singaporeans. This is to ensure that all Singaporeans are granted access to quality healthcare, regardless of financial status.

BY: CHRISTINE OW

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