KUALA LUMPUR, July 23 — Bank Negara Malaysia (BNM) has defended its mandate requiring copayment features in all new medical and health insurance and takaful (MHIT) products, saying that it does not breach anti-competition laws.
The central bank said the policy is intended to provide consumers with more affordable choices while maintaining competition in the insurance industry.
In a statement to CodeBlue, BNM said that its mandate of minimum 5 per cent copayment in the design of any new health insurance product, enforced since last June 1, is designed to offer a lower-cost alternative with presumably lower premiums, but existing non-copayment products will remain available to maintain consumer choice.
“Bank Negara Malaysia now mandates insurers and takaful operators (ITOs) to offer MHIT products with a copayment feature as a lower-cost option to consumers. Consumers can continue to purchase MHIT products currently offered by ITOs without copayment, thus preserving consumer choice.
“In addition, ITOs are expected to offer a range of MHIT products with copayment levels that cater to varying financial needs and circumstances of consumers, which further preserves competition,” BNM said.
A 2020 insurance industry study reported by CodeBlue last week raised concerns that mandatory co-payments could potentially violate anti-competition laws. The study suggested that while premiums might decrease with co-payment products, overall costs for consumers could rise due to additional out-of-pocket expenses.
Critics argue that, although non-copayment products are still available for now, the market is likely to shift predominantly towards copayment offerings. This shift could eventually phase out non-copayment products, reducing consumer choices over time.
BNM’s own February 29 policy document on Medical and Health Insurance/ Takaful Business for licensed ITOs states that existing on-shelf medical reimbursement insurance/ takaful products – including those without the minimum 5 per cent copay feature – can continue to be sold “until the licensed ITO decides to withdraw them from the market.”
