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Last week, the government released a White Paper proposing a new voluntary medical insurance plan. The base MHIT plan would be risk-rated, with premiums based on factors like age, gender, and health status, and would cover individuals up to the age of 85. It’s expected to be rolled out early next year, so what questions should we be asking about it before then? On this episode of #ConsiderThis Melisa Idris speaks with Azrul Mohd Khalib, CEO of the Galen Centre for Health and Social Policy.
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00:00hello and good evening i'm melissa idris welcome to consider this this is the show where we want
00:15you to consider and then reconsider what you know of the news of the day last week the government
00:20released a white paper proposing a new voluntary medical insurance plan now the base plan would be
00:26risk rated with premiums based on factors like age gender and health status and it's expected to
00:33cover individuals up to the age of 85. now the base plan is expected to be roll out rolled out
00:40early next year so the what questions should we as malaysians be asking about it before then joining
00:47me on the show now is azra mohammed kaleb who's the ceo of gallon center for health and social policy
00:52as always good to have you on the show now help us think through this because um it's been released
00:58but there are gaps in the information that was provided so uh very broadly what exactly is this
01:06white paper proposing and how might it be different from the insurance options that people already
01:12have currently thank you melissa and thank you for having me it's always a pleasure to be on your show
01:19and i i i can say with regards to the base uh medical health uh insurance and takaful product
01:27is that we are seeing there to be a what we would want to consider a baseline or a standard
01:34minimum or whatever uh that is available currently in the uh health insurance uh packages that are
01:42available or products as we call them uh out there in the market so basically if you can imagine
01:49that uh if you were looking for the bare minimum of any kind of insurance product uh that's available
01:56out there even if you would consider yourself not being able to afford more expensive one the one that
02:02you could basically say is something that you could be relied upon to be the standard would be what is
02:09being proposed to today by the government in the um white paper that they have presented uh outlining a plan
02:19for the introduction of a base mh it product that would then be uh uh taken up or offered by the
02:28insurance and technical organizations or itos uh that will be uh asked to offer these to
02:38so just so i understand correctly so the government is not offering insurance the government is saying to
02:44uh existing operators you must offer this base minimum program to is it targeted for people who are not
02:53already covered by insurance or who don't have any insurance coverage exactly melissa first of all
02:58it's very important to clarify that the government's not offering uh an insurance product health insurance
03:04product which is actually uh outlined here is really for the itos to consider to offer who
03:12uh the consumers so it's also optional it's not required by uh bank negara or the government to uh
03:21the itos to offer to everyone but this should actually cater for everyone really uh when you think about
03:28who should be able to accept meaning whether you have insurance or you don't have insurance or you're
03:33thinking about uh you know uh changing to a new policy this is considered one of the options that you can
03:40select from okay all right so when you read the white paper as well what was your what were your
03:47impressions your initial impressions uh specifically what was your biggest concern
03:52well melissa you know one of the things we have to be very clear about is that this is not uh first of
03:57all national health and social insurance uh for something that we've been advocating for quite a
04:02while uh but uh this is also not uh something that uh is intended to accommodate everyone uh in the market
04:12meaning if you are uh less uh of lower income and so forth uh this product is not aimed at you it would
04:19be something that would be considered for lower middle class and those above so when we look at
04:27the white paper outlining this plan there are quite a number of things that jumped up at us and one of
04:33the key questions that we were asking is how does this compare against the products that are already in
04:39the market of the similar range uh the similar options are available for consumers and this is where
04:46we come to questions uh that we need to consider which is um are we talking about whether the base mhid
04:55program is the most generous uh insurance option available um that shouldn't be the question it
05:01should be whether it improves the existing landscape of health protection because the fact of the matter
05:07is is what is being proposed i believe does not improve on the health protection in fact when you
05:13look at the other products of similar strata kind they're actually better ones out there that are
05:19being offered by uh you know the itos the private health insurance companies so you know when the the
05:26government says that they want to use this product to shake up uh the the health insurance sector to uh
05:35raise the floor to disrupt i think unfortunately in this instance it will not be able to do so because
05:43there are actually better products out there that are providing better protection at similar premium
05:50price range and without the kind of uh clauses that are embedded within this particular plan
05:58so so what do you think it is i mean what is it is it the fact that the coverage there's coverage
06:04limits or is it the premiums what makes it not as competitive or not as attractive as what's already
06:12out there and not the game changer it started to be it is quite unfortunate because we were actually
06:17hoping and expecting something of that nature but the reality is that when somebody is shopping around
06:22for insurance there are quite a number of questions that you are going to be asking um very well uh
06:29if you are of of a certain means you would want to see how much you're going to be paying each month
06:34and then also you're seeing how much cover is there uh annually you know in terms of uh the offer that's
06:42being provided so there's been a lot of of discussion in the media right now after the launch that you know
06:49you're paying less than what is available so you're paying like 50 ringgit uh for uh standard plus so
06:56there are two uh plans standard and standard plus and uh one uh offers a hundred thousand ringgit
07:03annual policy limit the other one offers around 300 000 so if you are going for the standard plus
07:12you would pay basically uh a premium of 50 to 70 ringgit and your annual limit is 300 000 but
07:21therein lies the the clauses here because when you are shopping around you may not realize that there
07:28are things called deductibles and copay and that comes into play and deductibles and copay are
07:34really uh here to stay uh for the health insurance industry really because it's a way for us as
07:41consumers to also take part contribute and and to ensure that there is um ownership of our own health
07:49treatment so that not everything goes to the insurance company and insurance company has to pay for
07:54everything so we're also judiciously uh deciding when we need that kind of treatment so
08:00clearly lies the problem because when you look at the uh the deductible for uh the standard plus
08:09it's around 500 ringgit which is you know resume presumably okay but the standard plus is a real
08:16shock really because it involves 10 000 ringgit to 15 000 ringgit deductible
08:22that you are basically needing to pay before you get treatment before you get the insurance to cover
08:31for you you have to pay 10 or 15 000 ringgit in advance simply for having a premium of around 50 ringgit
08:38the standard uh plan offers around 80 to 120 ringgit uh uh monthly premium so when you look at other
08:46packages products available by you know the ito players are they are prudential uh allianz um
08:55ge uh so forth they're all offering uh packages which actually pay less than that amount of maybe
09:0570 or 50 ringgit and guess what they also have one million ringgit annual limits or 1.5 million annual
09:14limits and the deductibles maybe around 500 ringgit or 1 000 ringgit so this plan that is being proposed
09:22by bank negara is is asking a lot for from people uh to be able to qualify for the for the standard plus
09:30uh plan but melissa you know what i'm reminded of a piece of statistics that uh bank negara shared uh not
09:38too long ago which looked at in an emergency what is the proportion of malaysian households that are able
09:46to um put together 1 000 ringgit in an emergency you know and in back in 2021 that was around 40 percent
09:55only uh so 40 percent of malaysians couldn't gather 1 000 ringgit in emergency
10:062024 the data had risen to 61 percent of malaysians are unable to gather 1 000 ringgit
10:14in an emergency so when you have deductibles that 10 000 ringgit to 15 000 you've got to ask yourself
10:21who's going to be able to afford this the other question that we also have to really ask reasonably
10:28is this strange age band that exists in in the white paper the age band identifies 31 to 35 years of age
10:4061 65 years of age and above 75 years so the question is what happened to everyone below the age of 30
10:49what happened to people between the ages of 36 to 60 are they not covered at all in this in this land
10:56because they're missing so we we're very interested to know what about these people is the plan not going
11:03to cover them so this is one of the issues that we are we're concerned about because it for an insurance
11:10plan is supposed to be the base it is certainly not the base uh that we're seeing here right now
11:16okay so um as i understand it there are still questions that need to be um sufficiently explained
11:23there's still clarity that needs to be given particularly the missing age brackets that you
11:28mentioned as role but when we look at um the bigger scheme of things so the government says this is all
11:34part of a bigger reset for um national reform of the healthcare sector can you situate this for me
11:43how does this fit into the bigger plan does this um base and my mh it plan actually reduce medical
11:52inflation does it reduce pressure on public hospitals where where is the benefit of this so melissa we uh
12:00we very clearly say that this base mh it plan has the potential to introduce positive disruption to the uh
12:09health insurance landscape as it were because it's not just about insurance um there's also
12:15uh things like the cost that occurs uh within the private hospitals um how much of that is going to be
12:23borne by the consumer or the patient how much of that is by insurance and so forth so you want to be able to
12:28to introduce uh uh a realistic product that takes everything into consideration especially since we've
12:37been told that medical inflation for this year is going to rise to 60 percent it's going to be 16
12:45this year in terms of medical inflation but the fact of the matter is is that these insurance premiums
12:51they don't exist in the vacuum the fact is is that there are other costs involved you know there
12:57there are root drivers of medical inflation which put things like weak or absent regulation of of
13:02pricing uh limited disclosure of fees variation in terms of clinical practice not one size fits all
13:09um rising costs of medical consumables although i'm hoping that with the us dollar weakening
13:14against ringgit now maybe we can gain some benefit from that don't forget expertise expertise is
13:20expensive we have to pay for that increasing domestic international demand and of course all of this
13:25contributes to an escalation into hospital billing so that then transfers to the insurance premiums
13:33that we uh have to pay because the insurer or the takafo providers are having to pay for that
13:39so the problem here is is that it's part of a continuum definitely um we feel that the reset framework
13:45as it is need to rethink uh because at the moment there's some weaknesses in there the fact of the
13:52method is until today melissa and neither the uh the insurance or takafo um uh players have issued a
14:01statement to indicate whether they support do not support or even you know say uh this is something
14:08interesting that they should be looking at we have heard nothing from the uh insurance and takafo players in
14:15the industry so that tells you quite a bit of where we are in terms of how the industry is looking at
14:20this but you know my concern here less of the industry luck it's really about malaysians themselves
14:26you know because we don't want a situation where malaysians who purchase the plan they think they're
14:31protected and then only to discover that they're uninsured when when illness strikes and then it forces
14:37them back onto out-of-pocket payments or even the public queues at the at the queues at the public hospital so we
14:44don't want this false sense of security right so we need to see what's covered and what's not covered
14:49in the base MHIT plan and whether or not this should be the standard and i would argue it shouldn't be
14:55the standard because the standard is poorer than what we have in the market today this isn't about the
15:02most luxurious plan it's about what fills our basic needs you know and you see that uh some of the
15:08itos are offering 60 70 ringgit and 80 ringgit uh premiums and they offer better than what you can
15:17see here on the base MHIT plan maybe those should be the base uh MHIT or the standard that we should
15:23look at so we really call for uh uh getting the guy to relook at this space MHIT plan because we feel
15:30that it can further be improved upon it's not about adding more features into that but adding more value
15:36and one critical question here we need to really answer Melissa is with regards to the older people
15:43those who are above the age of 60 whom we're very very concerned about and seem to be left out in terms
15:49of in the call as it were with regards to how much they're going to have to pay if you look at how much
15:55a person who's about the age of 61 is going to have to pay under this plan under the uh standard plan
16:03they're going to pay upwards of 280 and above all the way up to around 800 ringgit or in the standard
16:11plus plan don't forget the one that has a 10k and 15k deductible they pay 220 ringgit each month this
16:20is for those above the age of 60 and here's the worry Melissa is that they're not able to afford those
16:26premiums 200 ringgit is a lot of money for retiree a person who may not be earning much income at that
16:32point of time and then it's almost worsened by the fact that there is a deductible that is 10 000
16:39and 15 000 ringgit for which they have to pay for so we need to ensure that the older people are able
16:46to be protected because they are more vulnerable to uh the kind of pressures the private sector has to
16:53deal with but also at the end of the day they're the ones who would be considered undesirable so we would
16:59suggest perhaps there should be even subsidies by the government to help pay for those who are above
17:05the 60 year age band therefore allowing them to benefit from the coverage of this base mhfp product
17:14as well thank you so much for helping us think this through it's really complex and i appreciate you
17:18explaining it to us as well mama kalib there from the galen center for health and social policy we're going
17:23to take a quick break here and consider this we'll be back with more stay tuned
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