Medical Savings Accounts in Singapore: How much is adequate?

Author: 
Ngee-Choon Chia
Albert K C Tsui
Description: 
Paper No. 2005/02 - Apr 2005
JEL codes: 
Organisation: 
Abstract: 
While many studies have examined the cost-containment aspect of Medical savings accounts (MSA), few have investigated the adequacy of MSA to finance the health care expenditure. This paper estimates the present value of lifetime healthcare expenses (PVHE) of the Singaporean male and female elderly upon retirement at age 62. The estimation involves calibrating the stream of future healthcare expenditure; stochastic forecasting of cohort survival probabilities; and discounting the projected lifetime healthcare expenditure. Estimated values of the PVHE under various scenarios are used to assess the adequacy of the government-decreed minimum saving to be maintained in the MSA.