It should be noted, however, that the adequacy of Medisave balances to cover the majority of B2/C hospitalisation bills is based on current parameters, including the age profile of our population and current healthcare costs. Moving forward, two trends need to be watched carefully:

a. Already today, while the majority of Singaporeans are currently able to afford hospitalisation at Class B2 and C wards given Government subsidies and their Medisave balances, some Singaporeans – especially the low-wage workers and some of the self-employed – have insufficient Medisave balances to meet their medical needs. More efforts need to be made to ensure that they build up their Medisave balances; and

b. Health care costs will continue to rise in line with global trends. Our population is also greying. Together, these will result in increased Medisave withdrawals as compared to current withdrawal trends, based on the age profile of Medisave withdrawals⁵. There will therefore be an increase in pressures on Medisave balances. We cannot assume that adequacy of Medisave balances today implies the same for tomorrow.

Given these challenges, it remains critical for Singaporeans to contribute actively to their Medisave accounts and for policy-makers to remain prudent in their management of Medisave withdrawal policies.

⁵ Refer to Annex: Exhibit A-2 for Medisave withdrawals by age.

The amount of Medisave withdrawals for hospitalisation expenses typically increases with age (Exhibit A-2). The only exception occurs for females within the child-bearing years of 20s to 30s, who use larger amounts of Medisave for maternity purposes. After age 55, the probability of hospitalisation also rises steadily. As the population ages, withdrawals from Medisave for medical expenses will be expected to increase.