SINGAPORE - First, it was school fees. Now, it is health subsidies.

Just a month after the Education Ministry (MOE) said that non-citizens will have to pay more than citizens to attend school at Singapore's educational institutions, the Health Ministry announced yesterday that health subsidies given to Permanent Residents (PRs) will be cut by 10 percentage points by January 2012.

Both changes are aimed at making a sharper distinction between the benefits and privileges a citizen is entitled to, as compared to non-citizens.

Currently, citizens enjoy heavy subsidies in Class B2 and C wards, while PRs receive significant subsidy and foreigners don't get any at all.

With the revision, citizens are still entitled to an 80-per-cent subsidy for a Class C ward. But PRs will be entitled to 60 per cent of cost, down from 70 per cent.

Speaking at the sidelines of blood donation event yesterday, Health Minister Khaw Boon Wan said: "Our data suggests that about 6 per cent of our patients are PRs, so this reduction in subsidy for them, will save us about $7 million dollars a year, which we would then use to top up our growing subsidy for citizens."

Mr Khaw says it's only right for citizens to enjoy more subsidies than non-citizens.

But the move means PRs will have to make some adjustments.

"If you're not already insured with a private shield, then you should seriously think about taking up one because your basic MediShield is really aimed at the B2, C subsidy rates. So now that your subsidy will be less, I think you need to augment it with a private shield," advised the Minister.

The reduction will be implemented in three stages to make it easier for PRs to adjust to the new policy.

From Jan 1 next year, the subsidy for PRs in Class B2 and C wards in public hospitals as well as specialist outpatient clinics will be cut by five percentage points. And in July next year, it will be cut another 5 percentage points.

The subsidy for PRs in the intermediate and long-term care sector, like community hospitals and nursing homes, will be cut by 5 percentage points.

In January 2012, there will be another 5 percentage-point reduction.

This means that by 2012, PRs will receive 20 percentage points less healthcare subsidies than citizens.

Last month, aside from the higher school fees to be paid by non-citizens, MOE also said Singaporeans will have a higher chance of getting their child into popular primary schools during the primary one school registration exercise.

Previously, Singaporeans and PRs get an equal chance at the ballloting phase, but from this year, citizens will get an additional ballot.

Medisave contribution rate may go up to cover costs: Khaw 
Medisave contribution may have to go up to cover the costs of long-term nursing care, said Health Minister Khaw Boon Wan.

This is because the current rate of 6.5 to about 9 per cent is not enough to cover both big medical bills and long-term care costs.

"You need more contribution into Medisave. Right now, 6 to 8 per cent is for acute hospitalisation. But, if collectively we decided that we wanted to also save on long-term care, then we must be prepared to inject more money," explained Mr Khaw.

Medisave has been around for 25 years and was originally meant to pay for major hospital stays but it has been expanded to include some outpatient payments.

"We've never priced that into Medisave contribution rate. So that's a topic almost certainly I see a need for discussion during the coming Budget Debate," said the minister.

Mr Khaw added that the increase will depend on what the Members of Parliament support.