Rising insurance premiums leave B40 and M40 groups vulnerable
Several factors contribute to this trend, including the increasing prevalence of chronic diseases, rising medication costs, advanced medical technologies, and higher labour costs.

SHAH ALAM - The escalating cost of healthcare is a global concern, and Malaysia is no exception.
Several factors contribute to this trend, including the increasing prevalence of chronic diseases, rising medication costs, advanced medical technologies, and higher labour costs.
The growing expenses associated with litigation and the purchase of indemnity insurance by hospitals, clinics, and healthcare personnel further escalated healthcare costs.
As costs rose, charges in the private healthcare sector also increased due to the formula of "charge equals cost plus profit."
Without generating profit, hospitals or clinics could not maintain sustainable operations.
Control over these charges was deemed essential and required the collaboration of the Health Ministry (MOH), Bank Negara Malaysia (BNM), insurance companies, the Malaysian Medical Council (MMA), and the Domestic Trade and Cost of Living Ministry (KPDN).
The rise in health insurance premiums, driven by increasing private hospital and clinic charges, posed significant challenges to Malaysians’ access to private healthcare services.
Former deputy health director-general Datuk Dr Rohaizat Yon raised concerns about these implications. He stated that lower-income groups (B40) and segments of the middle-income group (M40) were increasingly unable to afford private health insurance.
According to him, employers often opt for cheaper health plans that fail to provide comprehensive coverage for employees.
Rohaizat also highlighted the tendency of private health insurance providers to focus on selling policies to healthy and younger individuals, while high-risk groups, including the elderly, faced significant barriers.
“Premium rates or contributions imposed were higher, making it difficult for high-risk groups like the elderly, particularly those in the B40 and M40 with health issues, to afford monthly payments,” he said.
As a result, more B40 and M40 individuals turned to public healthcare services, causing overcrowding at government clinics and hospitals.
Employers also reduced management costs by selecting less expensive health protection packages for workers.
“This situation may prompt insurance and takaful operators (ITOs) to introduce co-payment systems or increase co-payment rates,” said Rohaizat, who is a member of the Management and Science University (MSU) Board of Governors.
He also revealed that Malaysians financed private healthcare using various methods, including out-of-pocket payments, employer-provided health protection benefits, and private health insurance through third-party payors or administrators.
Given the critical role of private health insurance in funding private healthcare, Rohaizat urged Bank Negara Malaysia to involve the MOH in setting ceiling limits for health insurance premiums.
“When hospital and clinic charges increased, insurers inevitably paid more than usual. Consequently, insurance companies raised premiums to sustain their business operations.
“Premium or contribution rates accounted for factors such as treatment charges, inflation, individual risk assessments, risk pooling, product features, and claim payments,” he added.
Rohaizat called for better regulation of private health insurance and third-party payor initiatives alongside tighter control over private healthcare charges.
“This is vital as third-party payors played a crucial role in settling payments to hospitals and clinics. The charges and payment methods for private hospitals and clinics also need to be reviewed,” he said.
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