KUALA LUMPUR: Bank Negara's requirement for insurance and takaful operators (ITOs) to implement a co-payment option for their medical and health insurance and takaful (MHIT) products by September this year has been supported by the Association of Private Hospitals Malaysia (APHM).
Its president, Datuk Dr Kuljit Singh, said the establishment of a co-payment system in healthcare can provide numerous benefits.
"One of the primary advantages is that it encourages patients to be more cautious in their use of healthcare services," he said in a statement on Thursday (July 25).
ALSO READ : BNM should explain co-payment features for medical insurance policies, says Dzulkefly
Dr Kuljit noted that when patients must pay a portion of their medical expenses out of pocket, they are more likely to weigh the importance of a doctor’s visit or specific treatment.
This could lead to better health outcomes by preventing overuse of resources.
The association also supports Health Minister Datuk Seri Dr Dzulkefly Ahmad, who has questioned Bank Negara over the implementation of co-payment criteria for MHIT products to reassure consumers.
Dr Kuljit said the co-payment method can also help cut insurance premiums by eliminating false claims and promoting financial stability in the insurance industry. Insurers can provide a greater range of policies to match clients’ various financial and healthcare demands, making healthcare coverage more affordable for individuals and families.
"Healthcare providers believe that a co-payment system can assist in reducing hospital congestion and improving resource allocation.
"When patients become more aware of their healthcare spending, hospitals may experience up to a 20% reduction in overcrowding, allowing for better resource management and potentially enhanced service delivery," he said.
However, Dr Kuljit acknowledged that the co-payment mechanism presents various challenges.
He warned that people from low-income families might defer critical care due to high out-of-pocket expenses, resulting in poorer health outcomes and higher long-term costs.
This could increase current health disparities, as 30% of low-income individuals avoid necessary care due to costs.
The implementation of co-payments may also increase administrative difficulties for hospitals, potentially resulting in inefficiencies and revenue losses of up to 5%.
The added complexity of managing co-payments might confuse customers and undermine their trust in the healthcare system.
Therefore, the adoption of a co-payment system must be properly planned and executed to ensure that access to essential treatments is not compromised.
Policymakers and healthcare stakeholders must find a balance between encouraging responsible service usage and ensuring that disadvantaged populations continue to receive needed treatment.
Dr Kuljit highlighted Singapore's healthcare system, which utilises a co-payment model where consumers are responsible for paying 20% of their healthcare expenses.
"The system is designed to encourage responsible use of healthcare services and keep costs manageable for both the government and individuals.
"Key components include MediSave and MediShield Life, national medical savings schemes that help Singaporeans save for healthcare expenses.
"Additionally, private insurance products supplement MediShield Life by offering lower copayments or higher coverage limits, providing further financial protection," he said.
The system also features a tiered subsidy structure, offering varying levels of support based on patient income and the type of service received.
Low-income individuals and those with chronic medical conditions can receive government subsidies covering up to 80% of their healthcare costs, significantly reducing their out-of-pocket expenses.
Dr Kuljit stressed that a holistic national approach is needed to balance insurance premiums, access to care, and the prevention of overuse, ensuring the sustainability of the co-payment model.
