KUALA LUMPUR, Jan 16 — Health insurance premiums are set to increase by up to 30 per cent this year amid medical inflation and rising hospitalisation costs.
Free Malaysia Today (FMT) reported insurance companies and agents as saying that the insurance premium hikes were also due to medical advances and a higher number of patients.
“With the number expecting to rise further and outpace the general inflation rate, we have to make the necessary adjustments to your medical plan’s premiums so that they can keep up with health care inflation,” AIA Berhad was quoted saying in a notice to customers this week.
An AIA spokesman reportedly said insurance companies factored an inflation rate of 6 per cent to 8 per cent in their plans. The insurance company projected a 13 per cent increase in claims last year, which would lead to higher premium costs.
“Even if your hospital bill is covered by your insurance policy, the cost of each treatment will count towards your yearly and lifetime limits,” the AIA spokesman was quoted saying.
“In the end, lower claims will result in lower premiums for all policy holders.”
A Zurich Malaysia insurance agent told FMT that his company has started to inform customers about the revised premium rates.
“We have received calls from our clients asking why they are required to pay more for their medical plans,” he was quoted saying.
According to Aon’s 2019 Global Medical Trend Rates Report, Malaysia was the only country in Southeast Asia and the only other country in Asia Pacific (besides Pakistan) that was projected to experience double-digit medical inflation in 2019, hitting 13.6 per cent compared to 12.4 per cent in 2018. The 2019 projected medical inflation rate was almost 5.7 times that of the general inflation forecast of 2.4 per cent.
The report didn’t explain the factors driving Malaysia’s medical inflation, but listed hospitalisation as the most important element in medical plan costs globally at 90 per cent.
Life Insurance Association Malaysia (LIAM), Persatuan Insurans Am Malaysia (PIAM), and Malaysian Takaful Association (MTA) reportedly said last month that more expensive health insurance premiums were inevitable unless health care costs were contained.
The insurance companies urged private hospitals to publish the average costs of common medical procedures, amid the government’s move to deregulate private medical practitioners’ consultation fees.
According to the Health Ministry’s Malaysia National Health Accounts 2018 report on national health expenditure, private insurance comprised just 7 per cent of Malaysia’s total health expenditure in 2017.