PETALING JAYA: Insurance companies are likely to implement a co-insurance feature of between 5% and 15% for newly-purchased medical policies, with some to do so from March 1.
Insurance company sources, who disclosed this, said with this rule coming into play, the policy holders concerned will have to pay a portion of the claimable hospitalisation expenses amount.
Co-payment is usually expressed as a percentage, with a 5% co-payment in a medical insurance claim of RM10,000 meaning that the policy holder will have to pay RM500 as a share of the final amount, with the insurance company picking up the remaining RM9,500.
An insurance agent, who only wanted to be known as Ahmad, said the roll out of the co-insurance scheme will only be for new applications.
However, he said the implementation date would vary among insurance companies.
“Some are doing it earlier and others later because co-insurance involves changes in their systems and administrative procedures.
“Medical repricing is a normal activity by insurance companies as they usually need to assess the takaful funds and report to Bank Negara.
“So based on the yearly assessment, they will decide on the repricing rates. This is to ensure the pool of funds are sustainable to pay the claims,” he said.
Ahmad described co-insurance as a better option because it will be more sustainable.
“So, co-insurance is the way to go because people will not be going to hospitals on a whim.”
It was reported that medical insurance premiums were expected to rise between 40% and 70% this year, with rising cost of medical care in private hospitals being the primary reason.
With rising concerns, Bank Negara had on Dec 20 announced interim measures to ease the financial impact from the proposed hike in medical and health insurance premiums.
Under the new measures, insurers and takaful operators (ITOs) will spread premium changes due to medical claims inflation over at least three years for affected policyholders until the end of 2026.
The central bank also noted that medical cost inflation in the country reached 15% in 2024, significantly exceeding the global average of 10% and the Asia-Pacific average of 11%.
It said the surge was driven by factors such as advancements in medical technology and the increasing prevalence of non-communicable diseases, both of which have led to greater demand for healthcare services.
Last July, it was reported that the new co-payment feature for medical and health insurance and takaful (MHIT) products was among the options offered to new consumers with lower premium, offering flexibility based on consumers’ financial needs.
Life Insurance Association of Malaysia (LIAM) chief executive officer Mark O’Dell had said the co-payment option was not compulsory, and did not affect existing consumers who already purchased full coverage MHIT plans.
He said co-payment allowed insurance and takaful operators to offer lower premiums with consumers saving between 19% and 68% because the policy and certificate holders share the cost of medical services.
O’Dell told Bernama that customers could still decide whether to purchase a policy with co-payment or without co-payment at higher premiums.
