After Medishield coverage, blogger pays $0 for quadruple bypass surgery

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Blogger Andrew Loh who went for a quadruple bypass surgery has been sharing his experience with members of the public, and in an earlier post, he said that he was appreciative of the government subsidies and Medishield Life. He also shared a hospitalisation bill for an angioplasty he had before the major surgery, and the bill showed that Medishield paid $720 for a bill which totalled about $10,000 (http://theindependent.sg/medishield-life-paid-just-covered-720-of-a-10k-quadruple-bypass-surgery).

In another post in his Facebook today, he shared the finalised hospitalisation bill for his quadruple bypass surgery. The bill showed that he paid $0 after government grants and payout by Medishield Life.
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The final bill for his quadruple bypass surgery was $25,554.51. After  government grants of $20,644.88, and Medishield Life payout of $4,529.15, Mr Loh paid $380 using his Medisave.

Commenting on Mr Loh’s earlier bill for his angioplasty, ex-banker Chris Kuan pointed out that citizens should not think that they pay nothing for such huge government grants. He explained:

“Well remember the large employer and employee contribution to your CPF. Good – then consider 2 things. The more important one is how much of your CPF is drained away by market based pricing of your HDB flat and the huge run-up in private real estate prices, both a courtesy of the government control of the land bank and its macroeconomic policy choices.

The revenues the government derived from the landbank go into the reserves from which the earnings are extracted under the constitutional spending rule, to be used for government expenditures such as healthcare grants…The other is the difference between the rate of return achieved by GIC investing in proceeds from debts owed to CPF and the actual interest paid to CPF accounts. This provide the same effect on the reserves albeit on a smaller scale.

The Europeans may have paid 40-50 percent tax for social benefits of which government share of healthcare cost is one of them. But we, too have paid for that 63 percent government share in healthcare through the medium of CPF returns and real estate prices. The clever trick is that this way of financing government healthcare costs is not called taxes.

That is why Tharman can wax lyrically how Singaporeans are so much better off than the Europeans because we get more back from the government than taxes paid. Of course, Tharman being Tharman did not mention CPF and the effects of home prices and rates of returns. This is all the more reason that our CPF contributions must be seen as tax or at least tax-like.

The PAP has no magic bullet when it comes to financing government expenditures like healthcare, Their magic is to obfuscate the extraction of revenues to maintain the figleaf of being low-tax. This worked so well that a typical reaction of Singaporeans to increased social benefits or that Europeans enjoy a wide range of social entitlements is “do you want to pay high taxes”.

No, we already pay high taxes, it is just that they are not called taxes, which is the reason why I prefer the term transfers from individual to state to describe everything we paid to the government and benefits such grants and CPF withdrawal as transfers from state to individual.”