Tuesday, 27 April 2021

Health Insurance Premiums Rising Up to 30%!

 

The Government is putting huge efforts to save jobs, offering financial support to both businesses and individuals amidst the pandemic. The health insurance companies, however, have decided to increase people’s burden at this critical time, raising health premiums by up to 30%.

The Federation of Malaysian Consumers Associations (Fomca) President Datuk Marimuthu Nadason feels that there will be many cases where the policy will lapse because they cannot pay the premium. Those who fail to pay the premium will be denied the right to use their medical card.

Unlike medical insurers, banks have been trying to help the businesses or individuals by giving moratoriums where borrowers may defer their loan repayments. What makes it more interesting is both the banks and the insurance industry fall under the purview of BNM.  Shouldn’t it (moratorium) be imposed on medical insurers too?

The 2020 Global Medical Trends Survey by Willis Towers Watson found that Malaysia ranked among the highest in Southeast Asia in terms of expected increase in medical costs. The survey projected medical spend to rise from 11.6% in 2019 to 12.6% in 2020. Another report by Aon’s 2019 Global Medical Trend Rates Report cited Malaysia’s cost of medical care as having risen above the global average in recent years with double-digit medical inflation at 13.6% in 2019. A higher increase from 12.4% incurred in 2018.

Overall, however, in-patients at all private hospitals in 2020 declined with claims made by policyholders reduced according to the Association of Private Hospitals of Malaysia (APHM).

“In other words, the insurance companies should take this into consideration before imposing the hike. Furthermore, all patients who were COVID-19 positive were taken to Government hospitals, and indirectly there would have been fewer claims or pay-outs in claims by insurance companies,” said Parti Sosialis Malaysia (PSM) chairperson Dr Jeyakumar Devaraj.

“Many of them mark up prices and over-investigate and over-treat when there is a third-party payer. Medical treatment should not be provided by for-profit-parties, whether insurers or doctors... There is too much conflict of interest, and there is a severe asymmetry in information. Patients have great difficulty in discerning when their doctor is over-treating,” he said.

Both medical costs and insurance premiums need close supervision. Like how the Social Security Organisation (SOCSO) is structured, the Government should step in to pay insurance premiums where people who cannot afford it. Our overcrowded government hospitals too need expansion or increase in capacity. In fact, MoH’s public health budget has been reduced by 11.7% to RM5 billion in 2021 compared to RM5.7 billion in 2020.

Our current range of health expenditure is between 3-3.9% of GDP (2008-2018), according to the World Bank. Estimates of current health expenditures include healthcare goods and services consumed during each year. This indicator does not include capital health expenditures such as buildings, machinery, IT and stocks of vaccines for emergency or outbreaks. The World Health Organisation is suggesting an expenditure of up to 7% of GDP! We therefore need substantial investments in the public health system to lessen the people’s burden for quality healthcare.

 

Reference

1.     G Vinod, Health insurance firms hike premium rates, Bank Negara mum, 26 March 2021, Focus Malaysia

2.     Jeyakumar Devaraj, Four reasons why Malaysia’s healthcare system is ailing, 16 June 2019, Aliran

3.     Veena Babulal, Increase health expenditure to 7pct of GDP, govt told, 4 June 2020, NST

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