‘So shocked by increase’: No easy solutions as Malaysians grapple with sharp spike in medical insurance costs

GREATER TRANSPARENCY NEEDED, CONSUMER GROUP SAYS

Efforts are underway to find solutions to the complex issue.

Since September last year, insurers have had to provide consumers with the option to purchase health insurance products with a co-payment feature.

Bank Negara Malaysia said that premiums for products with co-payment features are 19 per cent to 68 per cent lower than similar products without these features.

Analysts have called for greater transparency in how insurance premiums are calculated, as well as an independent body to regulate the private healthcare sector.

Azrul of Galen Centre proposed setting up an independent commission to review charges and fee increases in private healthcare. 

The commission could have powers similar to Malaysia’s Competition Commission and take over regulation of health insurance and takaful products from Bank Negara Malaysia, he suggested.

Bayan Baru parliamentarian Sim Tze Tzin, who has been vocal about medical inflation, told CNA the Public Accounts Committee would be holding proceedings in parliament next month. Different stakeholders will be asked to share their side of the story. 

“It is (an) entire ecosystem and on the receiving end are the patients and policyholders,” he said. While insurers and private hospitals are profit-driven, their profits should not be “excessive”.

In 2023, insurers Prudential, Great Eastern, and AIA made net profits of RM963 million, RM1.123 billion, and RM1.41 billion respectively.

Asked about insurers’ profits, Life Insurance Association of Malaysia chief executive Mark O’Dell said the profits were from the companies’ other lines of business. 

“A company very easily could be making 500 million ringgit a year … But they’re losing money on their medical business. And so by not raising the premium, you’re asking the shareholders to pay or to subsidise from the profit of other lines of business,” he told CNA.

Sim said one aspect that can be investigated is the disparity in charges when patients claim using insurance and when they are paying out-of-pocket – something Bank Negara Malaysia noted in a briefing to parliamentarians last year.