Middle-class Malaysians exposed to ticking healthcare time bomb

 

Many middle-class Malaysians risk being financially crippled by huge unexpected medical bills. (AP pic)

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 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.

Feisul Idzwan Mustapha.

“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 said.

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.

“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.

The number of patients seeking treatment at both the health ministry (MoH) clinics and hospitals continue to increase year-on-year, he pointed out.

According to Bank Negara Malaysia (BNM), the country recorded a 12.6% medical cost inflation rate in 2023, more than double the global average of 5.6% and an increase from 12% in 2022.

Feisul said while the rising costs of medical insurance premiums reflect the escalating costs of healthcare services, increases of this magnitude “may not be entirely justified without a transparent assessment of the contributing factors”.

The inflation in medical costs, driven by the growing burden of non-communicable diseases (NCDs), an ageing population, and expensive medical advancements, certainly puts financial pressure on insurers, he noted.

“However, it is imperative for insurance companies to substantiate these increases with clear data on claims inflation and administrative expenses,” he added.

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.

Azrul Mohd Khalib.

“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 is 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 said the use of medical equipment such as wheelchairs, glucometers, ECG monitors, whose costs have already been recovered “hundreds of times over”, are routinely charged as if they were brand new.

“There are also reports of non-existent tests, visits by consultants which never happened, and a significant difference in charges between those with a medical card and those without,” he added.

He claimed insurers are forced to pay what has been charged, often leaving them transferring the consequences of over-consumption and overcharging to consumers, patients and policyholders.

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.

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.

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. - FMT