Rising Cost - The Life Insurance Association of Malaysia (LIAM), Malaysian Takaful Association (MTA), and Persatuan Insurans Am Malaysia (PIAM) blamed an “unprecedented” cumulative medical claims cost inflation of 56 per cent from 2021 to 2023. This surge, driven by various factors such as the rising costs of medical treatments, advanced health care technologies, and increased utilization of health care services, has made premium repricing an unavoidable measure.
The joint statement by LIAM, MTA, and PIAM cited several factors driving medical inflation, such as the rising cost of advanced medical equipment and innovative treatments; increased utilization of health care services (including post-pandemic treatment and elective surgeries); escalating costs in private hospitals; high prevalence of chronic diseases like diabetes and obesity; and higher demand for medical care from an ageing population.
Contradictory Statement - Contrary to the insurance industry’s claim that it would “stagger repricing adjustments”, many people with health insurance have already either been charged higher premiums or received notices on an increase in their premiums.
Despite LIAM, MTA, and PIAM purporting that health insurance premiums are only reviewed every three years, there have been cases of insurers raising premiums every year.
Solutions - Since last September 1, BNM required all insurers/ takaful operators (ITOs) offering medical and health insurance and takaful (MHIT) products to offer at least one product with a minimum 5 per cent copayment and/or an RM500 deductible. Any new medical reimbursement insurance/ takaful product designed must come with the minimum 5 per cent copay.
Contradictory Statement - Contrary to the insurance industry’s claim that it would “stagger repricing adjustments”, many people with health insurance have already either been charged higher premiums or received notices on an increase in their premiums.
Despite LIAM, MTA, and PIAM purporting that health insurance premiums are only reviewed every three years, there have been cases of insurers raising premiums every year.
Solutions - Since last September 1, BNM required all insurers/ takaful operators (ITOs) offering medical and health insurance and takaful (MHIT) products to offer at least one product with a minimum 5 per cent copayment and/or an RM500 deductible. Any new medical reimbursement insurance/ takaful product designed must come with the minimum 5 per cent copay.
In addressing the impact on policy owners/takaful participants, BNM has required ITOs to review their current repricing strategies for more reasonable implementation of such repricing. This includes managing increases in premiums/contributions over time, taking into account the impact on policy owners/takaful participants. In addition, ITOs are required to offer viable options for policy owners/takaful participants who are significantly impacted by the higher premiums/contributions to continue having insurance/takaful coverage.
Greater take-up of copayment MHIT products over time aims to help contain medical cost inflation in Malaysia by controlling the over-consumption of health services, alongside other health care reforms envisaged in the Health White Paper published by the government.
Greater take-up of copayment MHIT products over time aims to help contain medical cost inflation in Malaysia by controlling the over-consumption of health services, alongside other health care reforms envisaged in the Health White Paper published by the government.
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