KUALA LUMPUR – New rules on co-payment for medical and health insurance and takaful (MHIT) products do not apply to emergency treatments, outpatient follow-ups for critical illnesses, or treatments at government healthcare facilities, Bank Negara Malaysia (BNM) said.
It said insurance and takaful operators (ITOs) should refer to BNM’s policy document on the medical and health insurance and takaful business, which stipulates when co-payment shall not apply.
This includes emergency treatments like accidents and outpatient follow-up treatments for critical illnesses like cancer and kidney dialysis.
Consumers who have already purchased MHIT products without a co-payment feature can also continue with these policies at renewal, the central bank added.
It was responding to concerns about financial burdens on consumers when co-payment options are to become mandatory on September 1.
“ITOs can also continue to offer MHIT products without a co-payment feature to new consumers,” it said in a statement today.
It also said ITOs must offer a variety of co-payment levels to accommodate different financial needs and circumstances, with maximum caps to limit expenses for policy owners.
“Co-payments are also subject to a maximum cap set by ITOs which serves to limit the amount of expenses borne by policy owners or takaful participants.
“ITOs must also consider financial hardships or extenuating circumstances and may waive co-payments accordingly,” it said.
The option to purchase MHIT products with a co-payment feature is aimed at offering more sustainable and affordable medical and health insurance and takaful pin response to rising medical cost inflation, which reached 12.6% in Malaysia in 2023, significantly above the global average of 5.6%, it said.
With co-payment, MHIT products could be 19% to 68% cheaper than similar products without the option, depending on the level of co-payment.
Recently, the Federation of Malaysian Consumers Associations warned the co-payment policy on MHIT products could unnecessarily burden customers from the lower income group, forcing them to choose between healthcare and essential payments like food or housing.
This situation could lead to delayed treatments, thereby worsening health outcomes and raising long-term healthcare costs.
Deputy Finance Minister Lim Hui Ying told the Dewan Rakyat on July 1 that the co-payment option was being introduced to combat the rising cost of premiums and to ensure consumers utilise their medical insurance more efficiently.
She said the “buffet syndrome” – whereby consumers attempt to maximise the value of their insurance premiums – was among the reasons for rising insurance premium costs, besides inflation in medical treatment costs.
BNM today said greater take-up of co-payment MHIT products will help to contain medical cost inflation by controlling the over-consumption of healthcare services.
Other healthcare reforms in the government’s Health White Paper – such as greater transparency in medical cost – will help moderate medical cost inflation. – July 6, 2024
