PETALING JAYA: “Steep hike in insurance premium.” “Shocked by steep hike in premium.”
These were the two headlines seen in The Star over the past two weeks, which came from readers voicing their grievances about high medical insurance.
How should Malaysians deal with rising medical inflation in the country?
Insurance experts say one way of dealing with the rising costs is to only get insurance coverage tailored to your needs.
ALSO READ: Healthcare getting out of reach
A. Devadason, a financial adviser in life and medical insurance, outlined several factors which led to rapidly rising cost of medical insurance premiums.
Insurers, he said, were introducing multi-million ringgit coverage limits and imposing higher premiums even when a policyholder was not predisposed to serious health conditions and may not end up crossing the claimable limits.
Hospitals, said Devadason, may decide to take advantage of the higher coverage to provide more advanced and comprehensive services to its patients.
“This opens up the question if having such high coverage limits is a genuine response to future inflation or merely a marketing gimmick.
“On the other hand, hospitals are seizing the opportunity by pushing the boundaries of coverage limits with an aim to maximise their revenue in the name of offering comprehensive care.
“Then, we have policyholders – many of whom have never made a claim after years of paying their premiums – being tempted to utilise the benefits for minor issues to seek returns on their long-standing investment.
“With these three ‘forces’ in action, we should ask where did this cycle begin, and when will it end?” he said in an interview.
The number of consumers who abused their medical insurance facility is small but the majority of policy holders have been made to pay for the actions of these “bad hats”, said Devadason.
To sustain the rising cost of medical insurance, people should choose a policy customised for their needs, he said.
He said while a high insurance coverage would be useful for those genetically susceptible to serious illness, it may be pointless for others.
“Why would a family of three need a bungalow with 20 rooms? It will incur high maintenance costs for space they will never use.
“The same rule can be applied to medical insurance policies. Purchase what is needed rather than packaged plans. The more frills or riders attached, the higher the insurance premium.
“Also, take up an insurance policy early in life. Let the compounding returns work for you so that any savings component in the policy will grow to combat medical inflation,” he said.
Retired senior insurance official Chan Wei Fay said while it is understandable that the high cost of healthcare and imported pharmaceutical products is inevitable and will only rise with advancements in the field, regulators should examine the true costs of healthcare fees, especially when it is undertaken and borne with medical insurance.
He said strict scrutiny by insurance companies on the charges and unessential healthcare procedures imposed by private hospitals should be examined as it is a huge factor contributing to spiralling medical costs.
Chan said the high insurance coverage of medical card holders, which can amount up to several millions of ringgit, may create a “conducive environment” for hospitals to overcharge.
To keep medical expenditure manageable, he suggested the government come up with a national health scheme and have this managed by Socso to ensure that all Malaysians have access to medical care in their golden years.
“Perhaps the premium currently imposed on Socso members, which is very low and affordable, can be doubled to cover them in their golden years.
“This way, everyone is taken care of and they need not worry about paying steep premiums at a time when they wouldn’t want to be financially burdened,” he said.
