PETALING JAYA: Medical premiums will “typically” be adjusted every three years to ensure the sustainability of such insurance plans, say industry associations.
The accumulated impact of inflation has resulted in upward premium adjustments, said the Life Insurance Association of Malaysia (LIAM), Malaysian Takaful Association (MTA) and General Insurance Association of Malaysia (PIAM).
They said the insurance and takaful industry went through an “unprecedented” cumulative medical claims cost inflation rate of 56% in the 2021 to 2023 period.
“This surge, driven by various factors such as the rising costs of medical treatments, advanced healthcare technologies, and increased utilisation of healthcare services, has made premium repricing an unavoidable measure.
“Beyond inflation, the repricing quantum are also affected by factors such as individual risk rating, risk pooling, product benefits and features as well as expected claims,” they said.
The Star has received letters from readers who spoke of their predicament.
“I recently received a letter from my insurance company stating that my medical insurance premium would increase from RM540 per month to RM2,030 per month,” said one reader in September.
“The reasons cited were the significant increase in the cost of medical treatments and my attaining the age of 65.”
On Wednesday, Bayan Baru MP Sim Sze Tzin gave a press conference, saying that MPs have received dozens of complaints about rising health insurance premiums.
In a joint statement to address concerns on medical premium increases, LIAM, MTA and PIAM said: “We understand that these adjustments may cause concern and we are committed to providing transparency and support during this time.”
Besides rising costs of medical treatment and increased utilisation of healthcare services, they cited factors that led to rising premiums such as a high prevalence of non-communicable diseases (NCDs) like diabetes which require long-term care, and an ageing population that leads to higher demand for medical care due to illnesses.
To address the difficulties faced by policy holders, the three groups said they would be committed to stagger repricing adjustments to manage impact on customers.
Other measures include offering flexible premium payment plans to affected policyholders, and options for different protection plans at comparatively lower or the same premium.
“We welcome the recent announcement by the Association of Private Hospitals Malaysia on establishing a cost containment unit to manage healthcare costs, which will ensure services remain affordable while maintaining high standards of care,” they said.
The groups also noted that the introduction of co-payment options in September was a long-term solution to help policyholders.
“Co-payment aims to reduce premiums by sharing medical costs with policyholders, encouraging more mindful healthcare usage in the long term,” they added.
On Thursday, Bank Negara issued a statement, calling on insurers and takaful operators to review their repricing strategies for a more reasonable implementation.
They should offer viable options for policy owners/takaful participants who are significantly impacted by the higher premiums or contributions to continue having insurance or takaful coverage, the central bank said.
“Bank Negara remains committed to ensuring that the public continues to have access to suitable insurance and takaful products,” it added.
