PETALING JAYA: Despite Bank Negara capping insurance premium hikes at 10% per annum, there is lingering concern among medical insurance policyholders on whether they can still afford their policies.
According to them, the central bank’s announcement only came as a temporary relief.
Medical insurance policy holder R. Nandan said although he is relieved to know any increase in premiums will be minimal next year, he dreads the thought of what would happen if insurance companies are “hell-bent” on raising prices.
While the 52-year-old executive forks out around RM20,000 a year for insurance premiums for himself and four other family members, they have not extensively utilised their medical insurance which was bought over a decade ago.
“The planned increase in premiums is solely based on the rise of medical cost.
“I do not think this is right. An increase to a fair degree is acceptable but up to 70% is exorbitant. Is this justified?
“Private hospitals should be investigated if its charges are reasonable or if it amounts to profiteering,” he said.
To keep their charges low, Nandan said patients should be given the option to use generic drugs and unnecessary healthcare tests should not be imposed, noting that there seems to be little scrutiny on how a private hospital imposes charges for its services.
Nandan said insurance companies should offer generous discounts annually to policyholders who do not claim from their medical insurance.
Another medical insurance policyholder, who only wanted to be known as Lam, said he is concerned over the repricing and doubtful that Bank Negara’s measures would be long lasting.
Despite not making any claims, Lam, who is in his 50s, said his premiums have doubled since he purchased the policy more than 12 years ago.
He urged Bank Negara to scrutinise healthcare charges imposed by the private hospitals, which are based on a patient’s mode of payment.
Citing an example, Lam said his relative who was treated for meningitis at a government hospital for three weeks only had to pay RM15,000, whereas a friend of his who sought treatment at a private hospital for the same infection with medical insurance was charged RM75,000.
“How could charges be more than five fold at a private hospital? I understand if it is double the charges at government hospitals,” he said.
Lam also claimed that charges at private hospitals appear to be much higher if one pays with medical insurance compared to paying out of pocket.
“Are charges not supposed to be in uniform regardless of how one pays?” Lam questioned.
Senior insurance consultant Leonard Tan said any steep increase of medical insurance premiums on the grounds of rising healthcare costs could be avoided if private hospital charges were regulated by the Health Ministry.
Financial adviser in life and medical insurance A. Devadason said with the announcement, retirees could reinstate their policies without having to dig deeper into their savings to keep their policies active.
“Bank Negara’s move is favourable but these stop gap measures are just a temporary ‘band aid’,” he said.
“The fracture in the healthcare ecosystem must still be addressed by identifying the root cause of rising costs.
“This can be done by studying the roles of all parties involved – the insurer, policy holder and healthcare provider,” he said.
Federation of Private Medical Practitioners’ Associations of Malaysia president Dr Shanmuganathan Ganesan said transparency in hospital billing would help regulate non-consultation costs in private healthcare and empower general practitioners to play a larger role in primary care.
“These are critical steps toward ensuring affordable and accessible care. There is enormous cost-saving potential when opting for GPs.
“As a stakeholder in Malaysia’s healthcare sector, the association supports these interim initiatives by Bank Negara.
“However, the move is not a substitute for broader healthcare reforms, “ he said.
Welcoming the announcement, Association of Private Hospitals of Malaysia president Datuk Dr Kuljit Singh said the association will work with insurance and takaful operators as well as the government.
He added that discussions are ongoing with key stakeholders to ensure that both short-term and long-term solutions are sustainable and in the best interest of all.
On Friday, Bank Negara directed insurance providers to limit premium hikes, capping it at no more than 10% per annum.
