00:00Malaysians are expected to pay higher medical and health insurance premiums next year,
00:04with increases projected between 40% to 70%.
00:09Why is this happening, and what does it mean for everyone?
00:13Let's start with the All-in-One Medical Card, a handy tool that simplifies hospital
00:17admissions across Malaysia. Just present it at the hospital, and your insurance covers the bills.
00:24Simple, right? But maintaining this system is getting more expensive by the day.
00:30Behind these rising costs are several key factors, but the major contributor? Medical inflation.
00:38Last year, Malaysia saw a 15% rise in medical costs, outpacing the regional average.
00:44Much of this expense comes from hospital supplies and services, including everything from lab tests
00:50to essential medical equipment. These costs, which make up about 70% of patients' medical bills,
00:56are not regulated, meaning hospitals can charge as they see fit.
01:02In addition, insured patients are often charged much higher than self-paid patients,
01:07indirectly pushing up insurance claims and premiums.
01:11This has created a vicious cycle in which high medical insurance claims already outpace
01:16premiums collected, causing insurers to raise premiums. In 2023, the claims-to-premium ratio
01:22exceed at 111%. If this trend continues, insurers might be forced to either drastically raise
01:30premiums or stop offering medical insurance products altogether. So what's being done about
01:36this? On December 20th, Bank Negara Malaysia introduced some interim measures in hopes of
01:42softening the blow. Insurance companies will spread premium increases caused by medical
01:48inflation over three years, capping the annual medical inflation adjustments at less than 10%
01:54for 80% of policyholders. Those aged 60 and above will also have a one-year pause
02:01on premium increases caused by medical inflation from the date of their policy anniversary.
02:07While helpful, these measures do not address the fundamental issue of medical inflation,
02:12which requires more robust, long-term strategies.
02:16Long-term solutions will require all hands on deck. Insurers, hospitals, government bodies,
02:22and even policyholders need to come together to tackle this. Without addressing the root causes,
02:29like unchecked medical costs, this cycle will continue.
02:35Dhanush Rajareza, FMT News.
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