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THE National Association of Malaysian Life Insurance and Family Takaful Advisors (NAMLIFA) has raised concerns over the growing disparities in medical charges between insured and cash-paying patients in private hospitals.
The association warns that these discrepancies could potentially make medical insurance unsustainable, urging the government to take action before the issue escalates further.
In a Bernama exclusive today, NAMLIFA president Krishnan Appanu, stressed that the government should consider implementing national social insurance, regulating hospital pricing, and most importantly, ensuring that the welfare of patients takes precedence over the pursuit of profits by private healthcare providers.
Krishnan explained that the issue of price disparities has been ongoing for years, placing an unfair financial burden on policyholders.
He also pointed out that private hospitals often inflate charges for insured patients compared to those paying out of pocket.
"It is an open secret that private hospitals impose higher charges on insured patients compared to those who pay out of pocket," Krishnan told Bernama.
He said healthcare is not merely a business but an essential service.
According to Krishnan, nearly 54% of the Malaysian population currently holds medical insurance, but this practice has been contributing to rising premiums and increased financial strain on policyholders.
"This practice not only affects policyholders but also contributes to the rising cost of medical insurance premiums," he added.
With many policyholders contemplating surrendering their policies due to escalating premiums, Krishnan urged the Ministry of Health (MOH) to intervene by regulating hospital pricing to ensure fairness.
NAMLIFA has reportedly received continuous complaints from policyholders about inconsistent billing practices.
"The government must take immediate action to monitor and standardize these charges, or else insurance premiums will continue to rise, making healthcare coverage increasingly unaffordable," he warned.
PAC Report to Address Rising Health Insurance Costs
The issue has garnered significant attention, with Deputy Finance Minister Lim Hui Ying informing Parliament last month that a detailed study is needed to examine the price discrepancies between patients who use guarantee letters and those who pay upfront before seeking reimbursement.
This matter is expected to be a key focus of the Public Accounts Committee (PAC) report on rising health insurance premiums and private hospital charges, which is set to be presented in the Dewan Rakyat session in June.
Krishnan expressed hope that the PAC report would lead to long-term healthcare policy reforms, particularly addressing the repricing of premiums, which is a growing concern for aging policyholders.
"We expect the PAC report to provide a clear framework that ensures fair pricing mechanisms and sustainable insurance premiums," he said, adding that without effective solutions, more Malaysians could face financial hardship due to escalating healthcare costs.
Call for a National Social Insurance Scheme
In addition to regulatory intervention, NAMLIFA has urged the government to explore the establishment of a national social insurance scheme.
This initiative would provide Malaysians with the option of seeking treatment at both public and private healthcare facilities.
"A well-structured social insurance scheme could balance the interests of policyholders, insurers, and healthcare providers. It would prevent an over-reliance on private insurance while ensuring equitable access to quality healthcare," Krishnan suggested.
He added, without strong political will and decisive policies, the healthcare ecosystem would remain profit-driven at the expense of patient well-being. "Healthcare is not just a business but a necessity," he stressed.
Regulatory Action Needed from Bank Negara Malaysia
NAMLIFA also called on Bank Negara Malaysia (BNM) to ensure that consumer rights are protected amidst the medical insurance premium repricing exercises.
While acknowledging that the recent cap limiting premium increases to 10% until 2026 is a positive step, Krishnan warned that policyholders must not face delays or rejections in claims settlements as a result.
In addition, NAMLIFA suggested the consolidation of high-claims insurance pools into larger groups to improve risk management efficiency and stabilise the medical insurance industry.
The association also called for tighter regulations from the Ministry of Health (MOH), BNM, and the Ministry of Finance (MOF) to curb excessive annual medical limits in insurance policies, which have contributed to inflated medical costs.
Krishnan also proposed using technology to monitor and enforce fair pricing for medical treatments and pharmaceutical supplies to ensure insured patients are not unfairly charged higher rates than cash-paying patients.
Ensuring Sustainable Premiums
Beyond governmental intervention, NAMLIFA emphasized the importance of educating the public on the responsible use of medical insurance and encouraging insurers to offer more flexible and sustainable insurance plans.
Krishnan urged the insured public to treat medical insurance as a necessity rather than a privilege that could be overused. "Abuse of insurance policies, such as excessive claims and unnecessary treatments, contributes to higher costs," he said.
NAMLIFA’s calls highlight the need for a more balanced and equitable healthcare system to ensure that the rising costs of medical insurance do not push more Malaysians into financial distress. – March 9, 2025
