What does MediShield and 4D have in common....

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An honorable member of the Coffee Shop Has Just Posted the Following:

I will go bit into the maths of each to show you what is the issue my main concern with Medishield.

We know that 4D is gambling ...so what has it any thing to do with Medishiled ....plenty if on go behind the maths.

In 4D many people put in little bets hoping to win big prizes based on winning numbers drawn.
So how good is it a business for Singapore pools? What are the margins?

When you get hundreds of thousands of people betting, more or less there is a bet one each of the 0000 to 9999 numbers. While some numbers are more popular than others, Singapore pools limit the total amount punters can bet on a particular number so that bets are spread evenly throughout all the
numbers. So if you use $10,000 to bet $1 on each of the numbers from 0000 to 9999, how much can you get in return.
Quote:
Total Prize Value
= 10 x $60(Consolation prizes) + 10 x $250 (Starters prizes)
+ $490 (3rd prize) + $1000 (2nd prize) + $2000 (1st prize)
= $6590

Total Bets Required To Win ALL PRIZES
= $1 x 10,000 4D combinations
= $10000

Expectancy Value
= $6590 - $10000
= -$3410 or -34% (negative value)


For every $1 you bet on 4D, you get $0.66 back. So we always tell people it is silly to 'invesf ' n 4D because you lose 34cents for every dollar you put in. Because of this Singapore Pools, make plenty of money and it is a 'sure win' business.

So lets now look at Medishield. It collects a small amount of money from everybody just like in 4D everyone contribute a small amount. Then for those unlucky fellers wh get sick...these guys receive a
payout just like the lucky people in the 4D system. You are unlucky to get sick but lucky to have a pay out so that life is not so bad for you - this is euphemistically called risk pooling. Just like 4D there is this concept of collection and payout. Let's see how good a business Medishield is compared with 4D:

Taking data from CPF financial statements

http://mycpf.cpf.gov.sg/NR/rdonlyres...Statements.pdf

Go to page 32

Amount of premium collected = $385M
Amount payout to claims = $248.M

Net gains = $137M (36%)

So this is the truth....the margins for Media shield is even better than Singapore pools 4D of 34%. This excess collection not paid out to people in the scheme. It is somewhat revolting that Medishieild meant to aid the seriously ill payout less than 4D. It is likely that other insurance schemes run by the pap are even worse.

That is why an accurial audit that is independent needs to be done on all these schemes that the pop runs to convert them into break even schemes maximising payout to claimants to reducing their suffering. Such scheme underwritten by the gov have to carry the best intentions f helping he people who enroll not be turned into something for accumulating reserves and funds.

Before we support changes to medishield all these things have to be done so that Singaporeans are clear that these schemes are set up to maximise the benefit for those who enroll otherwise it is no better than 4D....and today it's payout is worse than 4D which is absurd.


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