Middle-class Malaysians exposed to ticking healthcare time bomb

Escalating medical inflation prompts insurance and takaful companies to propose significant premium hikes

PETALING JAYA: Malaysia’s middle-class faces a brewing healthcare crisis as soaring medical insurance premiums leave them exposed to potentially catastrophic health expenses, said a public health expert.

Escalating medical inflation has prompted insurance and takaful companies to propose a hike in medical insurance premiums of between 40% and 70% next year, resulting in many people ditching their medical insurance policies.

Public health consultant warns of potential financial catastrophe

Public health consultant and physician Dr Feisul Idzwan Mustapha said rising medical insurance premiums are likely to push more M40 (middle income) households and retirees to reconsider or terminate their policies.

“The middle class, already squeezed by stagnant income growth and rising living costs, may find it challenging to sustain premiums, leaving them exposed to catastrophic health expenses,” he said.

“So, yes, this creates a potential ‘time bomb’ where middle-class Malaysians risk being financially destabilised by unexpected medical bills, forcing many to turn to the public healthcare system, which is already under strain,” he added.

Rise in demand for public healthcare

Feisul, who is also the Perak state health department director, said a surge of middle-class Malaysians transitioning from private to public healthcare will likely exacerbate the challenges already faced by the public healthcare system.

“These include overcrowded facilities, longer waiting times and overburdened healthcare workers,” he said.

“In Perak, for example, we have observed increasing demand at public hospitals, particularly for specialist care and chronic disease management even before this current increase of medical insurance premiums,” he told FMT.

Galen Centre for Health and Social Policy concurs

The Galen Centre for Health and Social Policy concurs that soaring medical inflation and insurance premiums is a financial disaster waiting to happen for many Malaysians.

“Faced with 20% to – shockingly – more than 200% increases in premiums, many have decided instead to terminate their policies, and to take a chance with the public healthcare system,” said its CEO Azrul Mohd Khalib.

“As health insurance becomes less affordable, more people are likely to become uninsured, he said recently.

“Many of those affected are older, vulnerable and at risk of financial catastrophe from even a single medical incident,” he said, adding that household out-of-pocket payments on health expenditures, currently around 33%, will jump.

Lack of regulation

Azrul said it would be a mistake to shift the responsibility of reducing medical inflation onto the shoulders of policyholders, patients, their families and communities.

“That should be the regulator’s role. These health insurance premiums increases do not happen in a vacuum,” he said.

“The medical bills imposed by providers such as private hospitals continue to be unregulated. How will the problems of overcharging be addressed or even recognised?” he added.

Failure to protect consumers

Azrul said it is clearly apparent that in the case of private healthcare, “consumer protection is secondary and no one is in charge”.

He said Kluang MP Wong Shu Qi, during a recent Dewan Rakyat session, complained that Bank Negara Malaysia (BNM) and the MoH seemed to push responsibility to each other over rising health insurance premiums and private hospital charges.

Call for independent statutory commission

He reiterated the Galen Centre’s call for an independent statutory commission to be set up to regulate charges in the private healthcare sector, and for a parliamentary inquiry to look into the issues of rising health insurance premiums and hospital charges.

“Currently, caps and thresholds on insurance premiums and hospital charges appear to be determined by the industry rather than regulated, he noted.

“A regulator, similar in role and powers to the Malaysia Competition Commission (MyCC), is urgently needed and should be established.

“The commission could be mandated to independently review charges and fee increases,” he added.

Constitution of healthcare system imperative

To tackle the issue of rising medical cost inflation, Feisul said a transformation of the current healthcare system is imperative.

He noted that work on this has already started with the MoH submitting the Malaysian Health White Paper to the government last year.

“The White Paper is a transformative framework aimed at addressing the systemic challenges in Malaysia’s healthcare system, including the escalating medical cost inflation,” he said.

“The paper’s focus is on preventive and promotive health measures, emphasising the shift from a curative-centric approach to one that prioritises early intervention, health promotion and disease prevention,” he added.

Conclusion

In conclusion, the rising cost of healthcare and medical insurance premiums poses a significant threat to the financial stability of middle-class Malaysians. It is imperative that regulatory bodies take immediate action to address this issue and establish a transparent and accountable healthcare system.

Frequently Asked Questions

Q: Why are medical insurance premiums increasing so rapidly?
A: The rising cost of medical inflation is the primary cause of the increase in medical insurance premiums.

Q: How will this affect middle-class Malaysians?
A: Many middle-class Malaysians may struggle to afford medical insurance premiums, leaving them exposed to catastrophic health expenses.

Q: What is being done to address this issue?
A: The Ministry of Health has submitted the Malaysian Health White Paper to the government, which aims to address the systemic challenges in Malaysia’s healthcare system, including rising medical cost inflation.

Q: Is there a regulatory body that can address the issue of overcharging in private hospitals?
A: No, there is currently no regulatory body that can address the issue of overcharging in private hospitals. The Galen Centre is calling for an independent statutory commission to be set up to regulate charges in the private healthcare sector.