Debate on rising health insurance prices
CONSUMERS are hoping for a good start to 2021 – asking insurance companies not to raise prices for medical insurance in the new year.
A rise in premiums for most insurance companies was due to take place in 2020, but they have decided to postpone it until 2021 given the Covid-19 pandemic.
However, the Federation of Malaysian Consumer Associations (Fomca) says it is still too early, as many still struggle with financial constraints and uncertainties.
“The price increase is expected to take effect in 2023.
“Looking at the rate of recovery, the economy is still weak and it will take time for consumers to be able to provide for their families,” Fomca Chairman Datuk, Dr Marimuthu Nadason, said in an interview.
The call to delay price increases was supported by the Malaysian National Life Insurance Association and Takaful Family Advisors (Namlifa).
Fomca and Namlifa have also previously called on Bank Negara Malaysia to step in and protect consumers.
“The amount of the price increase depends on the different insurers and takaful operators (ITO) and the insured, ranging from 5% to 40% per insured.
“It’s not a standard at all levels.
“Older policyholders experience larger increases than younger ones,” said Namlifa President AM Naidu.
According to insurers and individual policies, the price hike could take effect as early as January 2021.
However, the situation could change if all parties are willing to work together.
Bank Negara told The Sunday Star that it has engaged key stakeholders to handle the re-pricing of medical insurance.
“However, a renewed commitment is needed to deal with this issue holistically at the national level,” the central bank said.
The bank says it recognizes the challenges many Malaysians face in the wake of the pandemic.
But he recalls that the players in the insurance sector have put in place measures to preserve the protection coverage of policyholders in financial difficulty.
This includes the temporary deferral of premiums or contributions, interest-free payments, or the ability to switch to another plan without additional subscription requirements.
“These flexibilities have brought financial relief to nearly 60,000 affected policyholders and takaful participants, who have chosen to defer payment of their premiums for three months, totaling over RM 74 million collectively,” Bank Negara said.
The bank urges policyholders or takaful participants to contact their respective ITOs or agents to find out which options are available that best meet their needs.
“It is important to note that for medical and health insurance and takaful (MHIT) products, premiums and contribution adjustments are strongly impacted by inflation in medical costs,” says Bank Negara.
It points out that MHIT claims grew at a faster rate of 11.6% per year compared to the MHIT premium of 9.5% per year between 2016 and 2019, based on its 2019 annual report.
“This trend, coupled with the rising cost of private medical care in Malaysia, which is said to be among the highest in Southeast Asia and above the global average, puts continued pressure on the prices of MHIT products. .
“It also emphasizes the long-term affordability of private health services in Malaysia,” adds Bank Negara Malaysia.
However, consumers are strongly opposed to implementing the hike as soon as it is untimely.
“More than 700,000 people are unemployed and many have suffered wage cuts to survive and put food on the table,” says Dr Marimuthu.
Dr Marimuthu, who is also president of Consumers International, says he is working with the organization’s 121 member countries to find the best policy coverage available so it can be implemented here.