Bank Negara Won’t Mandate No-Claim Bonus For Health Insurance: MOF

Bank Negara doesn’t plan to mandate no-claim bonus for health insurance, says MOF, to avoid inadvertently encouraging policyholders to delay treatment. Yet, Bank Negara also says co-payments are intended to control “over-consumption” of health services.

KUALA LUMPUR, July 10 — Bank Negara Malaysia (BNM) does not plan to require insurers to offer health insurance with a no-claim bonus (NCB) feature, according to the Ministry of Finance (MOF).

Deputy Finance Minister Lim Hui Ying said a few insurers and takaful operators (ITOs) in Malaysia offer medical and health insurance and takaful (MHIT) products with NCB features to encourage “prudent” use of health insurance, besides offering more options to consumers.

“However, Bank Negara Malaysia does not intend to mandate all ITOs offering MHIT products to offer products with that incentive, especially no-claim bonus,” Lim told the Dewan Rakyat special chamber last July 1.

“This is because introduction of such products can cause unintended consequences, such as policyholders delaying or not obtaining necessary health or medical treatment just to maintain their NCB levels. In the long term, this may affect consumers’ health.

“Therefore, any expansion of MHIT benefits must be carefully studied because MHIT is based on the risk pooling concept, where the accepted insurance premiums or takaful contributions are used to fund medical costs.”

Ironically, Lim went on to say that BNM’s new policy decision to mandate ITOs to offer MHIT products with co-payment features was aimed at incentivising “more responsible usage of health care services.”

NCB is an annual reward for policyholders who do not make claims for that policy year. It can come in various forms, such as a few hundred ringgit in cash; an increase in the overall annual limit; or vouchers for health care services like medical checkups, diagnostic tests, or vaccination.  

BNM has mandated ITOs to provide at least one MHIT product with a co-payment feature by September 1. All new MHIT products must have co-payment features.

Co-payments – which are out-of-pocket payments paid by the insured patient at the time of a claim – were set by the central bank at a minimum 5 per cent of claimable expenses, while ITOs are allowed to determine the cap.

Similar to Lim’s statement in Parliament, BNM said in a statement last Saturday that co-payments in health insurance are aimed at curbing medical inflation by “controlling the over-consumption of health services.”

The Galen Centre for Health and Social Policy said in a statement last Friday that BNM’s new co-payment policy decision could expose households to financial catastrophe and cause the cancellation of health insurance policies, leading to higher patient loads on the public health service instead.

Many Malaysians have criticised the central bank that was perceived as favouring the insurance industry or pushing the burden of cost management from private hospitals to patients.

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