A more inclusive Home Protection Scheme

A more inclusive Home Protection Scheme

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Benjamin Png started this petition to Minister for Manpower and

Statement
Persons with pre-existing chronic diseases who want to purchase a HDB flat with their CPF cannot get mortgage insurance due to a gap in the system. 

The Central Provident Fund (which is under the Ministry of Manpower) administers the Home Protection Scheme, and they have repeatedly declined covering persons with "serious pre-existing medical illnesses", despite appeals from MPs. They have also not disclosed this secret list of serious pre-existing medical illnesses. Furthermore, CPF is not willing to even consider the fact that: 

  1. In Singapore, "serious" pre-existing medical illnesses now have treatments that allow patients to live meaningful and productive lives.
  2. There are patients with these illnesses who have worked hard and have sufficient resources to buy a simple HDB flat, and would just like basic mortgage insurance so that they do not have to worry about burdening their families.
  3. These patients, if they are working and supporting their own parents and/or families, are not allowed to be covered under the Dependents' Protection Scheme (also under CPF), which means greater burden on their families, even if these patients do well like a "normal" person.
  4. It is rather discriminatory to automatically exclude persons without consideration of the above, even as Medishield Life, being under CPF as well, takes effect. 

Problem
Currently, it is compulsory for all persons using their CPF to purchase mortgage insurance, called Home Protection Scheme (HPS), to cover their HDB flats. However, because of "underwriting", some persons are automatically and systematically excluded from this compulsory scheme, based on their pre-existing medical condition. Some of these conditions include:

  • Heart conditions requiring a pacemaker
  • Kidney transplant
  • Liver transplant
  • Physical disability
  • Thalassemia major
  • Kidney dialysis
    *This list is not exhaustive because there is no disclosed list of excluded conditions. You or your loved ones could be included in this list.

CPF's current advice is to turn to private insurers. However, they did not realize that in actual fact, private insurers are not willing to cover the abovementioned persons as well. This is a gap within the system, thus persons with the abovementioned diseases will have zero mortgage cover. 

Implications
1. For patients who purchase HPS prior to acquiring diseases that involve the above, it is fine for them. However, we have a fair number of young persons who have developed the above as a result of a congenital condition, and when this low-average income young person grows up, falls in love, gets married and wants to purchase a HDB flat using his CPF, he is then denied mortgage insurance from CPF board. Because of the congenital condition, he or she is also denied to be under the Dependents' Protection Scheme. In addition, although Medishield Life would cover pre-existing illnesses, it does not cover some outpatient treatments that the patient requires. 

2. Now if this young person is doing fairly well since he/she has been taking very good care of himself/herself, and falls in love with someone who is also doing fairly well, they will not be eligible for a BTO, or any housing grants. Private insurance is an option, but to date, insurance companies that I have checked with are not willing to provide coverage since CPF does not want to.

3. The only way that this young person can be absolved from the above dilemma, is to do very poorly and choose a low-income spouse, so that he or she is only eligible for HDB rental flats, and therefore would not need to worry about a mortgage. A slightly better scenario is if this young person does not do that well and also picks the correct spouse who also does not have any pre-existing illnesses and while they can’t afford private insurance, they at least can get some HDB grants and purchase a BTO.

Why This Issue is Important
1. From a meritorious point of view, this clearly does not send a very positive message to patients with the abovementioned conditions. Should these patients rise above the challenges their illness brings and does relatively well to rise to an average income state, they will be heavily penalized when it comes to basic needs such as housing and healthcare. In addition, the spouse is penalized as well. The current policy penalizes those who work hard, and double penalize them if they are working to support others in the family. 

2. Socially, I cannot imagine the anxieties the young couple would go through, especially for the parents of the well spouse, and the thought of their child marrying someone who cannot be insured. I also cannot imagine the psyche of these patients, who already have to deal with being born with a congenital illness and struggle through life, knowing that they will become a burden to their families because they cannot be insured for something as basic as a house.

3. In addition, should they find enough resources to buy a house without insurance, it will be an entire family that will be impacted, and could potentially place a family with young children in significant financial crisis. I believe that is why CPF had instituted HPS to be compulsory, to avoid such a scenario.

4. Should the above happen, the family members will all have to turn to financial aid, which increases their dependence on the system. I believe this is why we have also instituted compulsory healthcare insurance, to reduce the likelihood of a person being dependent on the system.

5. I believe that there is this gap because of the small number of people impacted and perhaps some outdated assumptions about the above conditions. But I believe that as we have a first world healthcare system, the treatment outcomes for these conditions are very different now. For example, we have transplant recipients now who are working as surgeons, lawyers, social workers, etc.

Solution
1. Review the automatic exclusion policy that HPS has. If a person has sufficient resources to even purchase a HDB flat, it does not make sense that they cannot be insured.

2. Patients who are already covered by CPF Medishield or PMIs for these same illnesses should not be in the automatic exclusion policy in the first place, as it would appear to be contradictory. Furthermore, with the implementation of Medishield Life in November 2015, the automatic exclusions from CPF Board would appear to be even more contradictory. HPS should follow along the same lines as the CPF Board.

3. Release the list of medical conditions found in the automatic exclusion list to the public, so that people can make better financial decisions about their housing. 

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