KUALA LUMPUR – Lawmakers have urged the government and Bank Negara Malaysia (BN) to properly monitor the situation surrounding increased premium rates for medical insurance, stressing that the people’s welfare and healthcare ecosystem are at stake.
Among those who called for Putrajaya and BNM to scrutinise the matter in greater detail was Parliament’s Special Select Committee on health, which raised concerns on the rakyat’s ability to access quality medical care at a reasonable cost.
If the cost of insurance and healthcare keeps rising without effective management, the committee cautioned it could negatively impact the healthcare system. Specifically, the system might struggle to maintain its ability to deliver services that are both sustainable and comprehensive for patients.
As such, it presented several recommendations to the government, one of which is to plan gradual price increases for health services to meet increasingly complex health needs.
This step, it said in a statement today, includes increasing hospital capacity, workforce and infrastructure as well as ensuring a supply of more modern medical technology.
The committee’s recommendations are based on an engagement session it held yesterday with the Health Ministry, BN, the Life Insurance Association of Malaysia, the Malaysian Takaful Association and the General Insurance Association of Malaysia.
“The Health Ministry should also hasten its efforts to establish a National Health Fund, which will aid in providing sustainable financial resources to meet the medical needs of the people and covering increased treatment costs.
“Additionally, the ministry should also intensify efforts to establish strategic relationships with various stakeholders through the Rakan KKM initiative, thus opening up space for innovation and wider support,” it added.
The committee also urged the Health Ministry to fast-track its implementation of cost control measures based on the Diagnosis-Related Groups (DRG) system as the move could be a catalyst to the nation’s healthcare system while increasing transparency in funds management.
Yesterday, Prime Minister Datuk Seri Anwar Ibrahim told the Dewan Rakyat that the Health Ministry has been instructed to implement DRG regulations on an immediate basis, with the control hoped to be in place by “early next year”.
Meanwhile, in a separate statement, DAP national chairman Lim Guan Eng called on BNM to demonstrate its social empathy, public responsibility and ethical compassion by protecting the life and health of the rakyat instead of insurance and takaful companies’ profits.
Urging the central bank to “categorically reject” the supposed 40 to 70% hike in medical insurance premium, the Bagan MP stressed that any repricing adjustments should be implemented gradually in a sustainable and reasonable quantum.
“Why should medical insurance premiums be hiked up by 40 to 70% next year, which is much higher than the 15% increase in gross medical costs?” he questioned.
“What are the underlying reasons that have allowed gross medical costs to run out of control and increase at a higher rate as compared to our regional neighbours and globally? Why should this failure of cost containment of medical costs be borne solely by policyholders and the public?”
Lim also said that there are “valid concerns” on BNM’s alleged regulatory failure to prevent abuses in imposing medical costs by private hospitals and the life insurance industry, highlighting that life insurance companies should not be allowed to earn more profits from income off the backs of “hard-working and hard-pressed” Malaysians.
He pointed out that a cost comparison study from 2021 to 2023 showed that a dengue patient using a guarantee letter (GL) was charged RM4,978, which is four times higher than the cost of RM1,288 for the same dengue patient that pays first and claims later.
He claimed that BNM concedes that a pneumonia patient using a GL will pay RM6,859 – a figure three times higher than the RM2,654 charged to a patient that pays first and claims later.
“According to BNM, overall profitability of life insurance and family takaful funds was higher in the first half of 2024 at RM8.4 billion, more than double their profitability in the second half of 2023 at RM3.2 billion. Have life insurance companies not earned enough?
“When workers’ salaries never hike up by 40 to 70% in one year, there is no clear and defining moral justification for life insurance companies to hike up medical insurance premiums by 40 to 70% next year,” he added.
Besides that, other government backbenchers said that BNM had informed them during a briefing yesterday that there were several factors affecting the increase in medical insurance premiums.
The factors, the lawmakers said in a statement, include an uptick of non-communicable diseases among the public, an aging society, technological advancements in the healthcare sector and increased wages for manpower.
However, they acknowledged that the government is aware of gaps in private healthcare’s legislation, regulation and administration and is committed to creating an interim and long-term solution in the near future. – December 11, 2024
