As medical costs rise and inflation takes a toll, many are questioning if their coverage is worth it or if it’s becoming a financial strain.
SHAH ALAM - Insurance is supposed to be our safety net, a way to safeguard our health and future.
However, these days, more and more people are finding it harder to afford, with premiums soaring and budgets stretched thin.
As medical costs rise and inflation takes a toll, many are questioning if their coverage is worth it or if it’s becoming a financial strain.
As medical costs and inflation rise, the gap between what people need and can afford continues to grow.
Bayan Baru MP Sim Tze Tzin recently highlighted Parliament and on social media.
In a Facebook post on Nov 20, he voiced the grievances of Malaysians struggling with escalating private hospital charges and the corresponding surge in insurance premiums.
He urged affected individuals to email detailed complaints, stressing the importance of public input in shaping policy reforms.
“How is the government controlling private hospital fees and ensuring insurance premiums remain affordable for the public? We want to hear your complaints and suggestions. Email us at [email protected],” Sim wrote in his post.
His calls for action resonated widely, culminating in a pivotal announcement by Bank Negara Malaysia (BNM) on Thursday.
BNM orders review of premium hikes
Insurance and takaful operators (ITOs) have been instructed by BNM to reassess their pricing strategies for medical and health insurance (MHIT) to ensure a fairer implementation of premium increases.
In a statement issued, BNM stressed that premium hikes must be managed in a manner that takes into account the impact on policyholders, particularly those significantly affected by the increases.
The central bank highlighted the necessity for ITOs to offer meaningful solutions, such as flexible payment options and alternative protection plans, to ensure that policyholders could maintain their coverage.
This comes after insurers warned of potential premium increases ranging from 40 per cent to 70 per cent, citing factors like medical inflation, advanced healthcare technologies, and increased utilisation of healthcare services.
BNM acknowledged the rising healthcare costs but stressed the need for industry-wide reforms to maintain affordable coverage.
“ITOs are required to offer appropriate solutions for policyholders significantly affected by premium hikes to ensure they can maintain their insurance coverage,” BNM said in its statement.
BNM has also committed to ensuring the public’s continued access to suitable insurance and takaful products, with further details on available options expected to be announced soon.
The central bank reiterated the importance of collaboration between key stakeholders, including the Health Ministry, ITOs, the Association of Private Hospitals Malaysia, medical practitioners, consumer groups and BNM itself, to effectively address medical cost inflation and improve the accessibility of MHIT coverage.
Sim, who had previously criticised BNM for attributing the issue to business decisions made by insurers, welcomed the move but emphasised that further action was needed.
He called on BNM to take a more active role in ensuring that rising premiums do not put an undue burden on Malaysians.
Insurance industry’s response
In response, insurance associations, including the Life Insurance Association of Malaysia (LIAM), the Malaysian Takaful Association (MTA), and Persatuan Insurans Am Malaysia (PIAM), agreed to stagger premium increases and offer flexible payment options.
The associations attributed the hikes to a cumulative 56% rise in medical claims costs from 2021 to 2023, describing the adjustments as an ‘unavoidable measure’ to sustain insurance plans.
Key measures announced include establishing dedicated hotlines for affected policyholders, offering relief programmes, including flexible premium payment plans and providing alternative protection plans at lower or similar premiums.
The associations also welcomed the recent establishment of a cost-containment unit by the Association of Private Hospitals Malaysia (APHM) and highlighted the introduction of co-payment options as a potential long-term solution for managing policy costs.
Private Hospital Charges Under Scrutiny
The rise in insurance premiums has been closely linked to escalating charges by private hospitals.
Sim and other critics have called for greater regulatory oversight to curb unchecked cost increases in private healthcare.
Sim hailed BNM’s directive as a ‘victory for the people’ but warned that more work was needed to ensure fairer healthcare access.
“Rakyat won first battle, the war is not over yet. Let’s keep fighting,” he said in a post on X on Thursday.
The insurance industry, government agencies and healthcare providers were expected to collaborate on sustainable solutions to balance medical cost inflation and premium affordability.
Stakeholders, including the Health Ministry, APHM, and consumer groups, have pledged to explore reforms that safeguard access to healthcare while easing financial pressures on Malaysians.
Further announcements from insurers and regulators are anticipated in the coming weeks as the nation grapples with striking a balance between rising healthcare demands and economic accessibility.
