Why is this happening? What caused the hike? What can we do?
Refer to a post by BFM and many other online media platforms as well as mainstream medias, premium/contribution is expected to rise 40% – 70% again in year 2025. What is happening? Is there anyone able to stop this?
Insurance Companies mentioned that:
- Claim ratio is increasing (means that percentage of policy holders that make claim is increasing) and,
- The average amount per claim is also increasing (average amount per claim is increasing)
First reason, is it the health of the people is deteriorating or are we getting more diseases nowadays? Or perhaps, people are more concerned about health and get treated more?
For second reason, is it the cost of hospitalisation increasing? Is it due to inflation? Or is it due to exorbitant charges by private hospital?
Above will be two points to ponder.
The next big question, why is Bank Negara Malaysia (BNM) not regulating? Why never control the premium charged by Insurance Companies? Even MP asked the question in parliament.
Basically, BNM does monitor the premium and insurance companies need to present to BNM their justification to increase the premium. So, I think this answered the question does BNM regulating? Yes, but, with data supported justification, BNM would not want to drive insurance companies out of business? Fair?
Don’t forget that, earlier of the year, BNM also drew a new guideline that new Hospitalisation and Surgical Insurance products must come with deductible option in order to manage the issue of steep increases of insurance premium.
I am quite sure most of the people may have forgotten. Read the article below. In the article also explained the justification and many related matters.
Here’s why Malaysians will have the option to pay partially for hospital bills in exchange for cheaper insurance – Malay Mail @ 8th July 2024.
If the question is about whether BNM is too lenient on this? That would be one answer I don’t have, yet, from my observations, BNM had been playing a vital role in protecting the people’s interest all these while and I believe they are still acting in the best interests of the people.
Another claim made by many – Insurance Agents are making more? Hospitals are charging higher when patient uses the medical card?
As far as I can remember, the Percentage of Commission paid to Intermediary had never increased but only decreased. Firstly, from traditional plan to investment linked policy, it has been reduced by approximately 17% in total of 6 years. Secondly, more guidelines and stricter compliance to intermediaries had been imposed over the past decade. After all, there are options that client can get medical coverage online now. Would you prefer to purchase online? And, I can assure you that, even without intermediaries, the premium will still increases. Just remember, you have choice. But, if you want someone to do analysis for you, advise you on what is suitable for you, then intermediaries will be there.
Have you ever asked for clarification from the hospital even if insurance is paying for your hospitalisation bill. Many said that private hospital charges more if patient are using insurance. Is this true? If you believed in this, why did you allowed it? Because you are not paying using the money from your pocket? Perhaps the idea is.. It’s okay, my medical coverage have 10 Millions limit a year and there is no lifetime limit, let them charge whatever they want.
After all the blaming, perhaps I will ask myself, what can I do?
- Live a healthier life? Take better care of our health? Could this be another option to reduce the risk of having to be hospitalised? And overall reduce the increase in number of claims?
- Use the Medical Insurance more responsibly. I believe any of the intermediaries out there will have experienced before client asking how can they utilise their medical insurance to do medical check up or some other “interesting procedures” that has been clearly stated should not be covered by the plan. However, whenever you tell them, “Cannot”, they will tell you, my friend said can. He already did that. We just need to.. Bla bla bla bla..
- Rather than complain in social media, reach out to your representatives i.e. Member of Parliaments to bring the discussion into parliament. Keep pressuring them, pressure them to find out what can be done. We have seen some started to raise this issue, let’s bring more to join.
- And, finally, from financial planning perspective:
a. Set aside an emergency fund. Consider of getting Medical Coverage with higher deductible. If you are buying a plan with higher deductible like RM 5,000/ RM 10,000 or higher, the premium will be significantly lower. The initial idea of medical coverage is cover catastrophic financial loss that may affect our long-term financial plan. If you refer to the illustration from the article I shared above, it may make a lot more sense to do that.
b. Find out about your employee benefit plan. Does your company covers your medical fee? Your family? If yes, is it sufficient? If no, what can you do? This is also when high deductible plan come handy. Of course, there is also risk when you change job or loss of employment. You have to carefully analyse your situation.
c. Prioritise your needs and make full use of your resources. We have competing needs right now, insurance is only a part of risk mitigation plan. There are other things like child education, retirement fund, owning a house and many more. It would be best if we can have everything. If not, what option we have? One of the way, maybe we should first consider our needs during our prime time i.e. the time you are generating income and many are depending on you. Plan first for the period of time now until retirement. You may not want to get the BEST PLAN, but, settle with what is affordable now and reasonably adequate coverage.
d. Finally, would you wan to consider public healthcare? Find out for yourself if that is an option for you? If you are considering this, you should find out what is available to us. If you are satisfied with this option, then, it may also be a plan.
Disclaimer: Above sharing is just personal opinion. It is only to be shared for discussion. It should not be considered as an advice for any financial planning action. Talk to your Financial Adviser to analyse your situation before any decision being made.