CodeBlue’s recent poll of more than 850 specialists in private hospitals nationwide revealed horrific health insurance practices in Malaysia that are beginning to mirror American-style health care.
Amid Malaysia’s lack of regulation over insurers and takaful operators (ITOs) and third-party administrators (TPAs), hundreds of specialist doctors across specialties provided detailed anecdotes illustrating “Deny, Delay, Revoke” insurance tactics and their consequences on patients.
“Deny” refers to outright refusals of care, including by invoking “pre-existing conditions” like chronic diseases that are unrelated to the illness one is admitted for. Insurance also denies coverage of various diagnostic tests, procedures, and drugs or therapies, as well as inpatient care by only insisting on daycare or outpatient treatment instead.
“Delay” is bureaucratic stalling by insurers that leads to postponed surgeries, admission, or critical interventions for medical emergencies.
“Revoke” refers to the retraction of guarantee letters (GL) after admission or completion of a procedure or treatment, forcing referrals to government hospitals or leaving patients stuck with private hospital bills and doctor fees unpaid.
Statistics from our specialists’ survey are stark: 99 per cent perceive insurer interference with their clinical decision-making, 99 per cent have patients who faced health insurance problems over the past year, and 73 per cent had patients who were forced to switch to public hospitals due to insurance denials or delays.
Testimonies from doctors paint a Kafkaesque nightmare of not just dealing with irrelevant questions and documentation requests from insurers before they can treat their patients, even during emergencies, but a direct impact on patients with increased morbidity and mortality. Insurance companies literally cause pain in many cases.
The sheer scale of insurance denials and delays across specialties demonstrates a systematic industry pattern of working against – not for – customers at a time when they need protection the most, the minute they step into a hospital.
Based on anecdotal evidence from CodeBlue’s poll, insurers deny coverage when you’re unhealthy, even when so-called “pre-existing conditions”, like diabetes, hypertension, or even overweight, are unrelated to the admission diagnosis (such as dengue or pneumonia) or are an incidental finding.
But insurers also revoke GLs or deny coverage when you recover after treatment or if you come in at an early stage of cancer.
ITOs deny drug claims for innovators and expensive biologics, but they also refuse to cover generics and cheap medicines classified as “non-medical” or “not indicated”.
Payers deny coverage of exams or tests that would aid clinical decision-making. But at the same time, they demand unnecessary investigations like a wrist MRI to diagnose carpal tunnel syndrome or a patient’s lipid profile and blood sugar levels for conditions such as a fracture or viral fever.
The insurance industry in Malaysia is under pressure, particularly due to a surge in claims post-Covid, leading to higher premiums. But as much as payers in health care say that they have the right to decide what to pay for (or not pay for), the money that they’re using for reimbursements comes from policyholders.
So who are insurance companies representing: shareholders or policyholders?
Although the use of exclusions like pre-existing conditions or interference with medical practice isn’t necessarily illegal, this doesn’t make it ethical.
A generic-only mandate doesn’t make sense either – not just due to the fact that some patients respond better to branded drugs or have allergies to generics – but because, again, policyholders are directly paying for their own care through premiums.
Why do insurers sell medical plans with RM1 million annual coverage if they refuse to cover innovative drugs, the latest surgical techniques that minimise recovery time, or even something as basic as general anaesthesia?
Middle-class Malaysians pay health insurance premiums faithfully for years, sometimes decades, with the legitimate expectation of receiving protection when they need it, as promised by insurance agents who sold them their medical plans.
But CodeBlue’s survey demolishes this deceptive fantasy of protection. If we end up in a government hospital at the end of the day due to insurance denials or delays, then what’s the point of buying health insurance?
Rather than blanket denials, ITOs should use their pools of policyholders to negotiate for better rates from health care providers. The discounts that insurers demand from hospitals should not come at the expense of patients, but should be used to improve benefits.
In light of the pervasive “Deny, Delay, Revoke” practices across Malaysia’s insurance industry, we express the strongest possible caution to the government and Bank Negara Malaysia (BNM) to avoid launching their basic medical and health insurance/takaful (MHIT) product without legal safeguards.
It would be the height of irresponsibility for the government and the central bank to advise Malaysians to part with their already meagre Employees’ Provident Fund (EPF) savings to buy a regular MHIT product – only for policyholders, especially those with underlying non-communicable diseases (NCDs), to find out later that they’re denied coverage upon admission.
If Putrajaya wants ordinary citizens to use their retirement savings to buy the voluntary MHIT product, then the government must mandate the underwriter to approve all GLs (just one GL, no “initial” or “final” GL) and reimburse all claims – without exception – unless actual fraud is discovered. No exclusions can be made based on pre-existing conditions.
If no ITO is willing to underwrite the basic MHIT product with such a mandate, then the government should abandon it.
CodeBlue calls for legislation to prohibit ITOs from denying coverage or charging higher premiums due to pre-existing conditions, similar to the United States’ Patient Protection and Affordable Care Act, commonly known as Obamacare.
We also demand transparency from insurers. Reports from our poll about insurance denials for patients, whose policies are less than two years old, suggest false advertising from agents who tell their customers that claims can be made from three or six months.
Pending the enactment of an Act to prohibit coverage denial or higher premiums due to pre-existing conditions, ITOs and TPAs must immediately issue notices to all policyholders or those insured to advise them to undergo regular health screenings (whether at their own cost or covered by their insurer) and to share the medical reports.
These reminders – which should be issued annually – must state clearly that premium repricing will likely occur should policyholders be diagnosed with any NCD from their screenings (and that premiums won’t go down even if policyholders later manage to get their condition under control), but that policyholders will face the risk of denials upon admission should they fail to disclose their “pre-existing condition”.
ITOs and TPAs must also issue notices to all policyholders or those insured upon making clinical decisions like blanket generic-only mandates or prioritising local over general anaesthesia, besides listing various procedures and surgeries that they will only cover as daycare instead of inpatient treatment.
Policyholders should not discover these things at the last minute during their crucial time of need in pain and anguish.
Policyholders can then decide early on if they want to switch insurance providers to one that will give them what they pay for or cancel their policies altogether, save money, and go to a public hospital when they need to.
Finally, CodeBlue urges the enactment of legislation to hold ITOs, TPAs, and institutional payers liable for medicolegal implications from the denial or delay of care.
If insurers believe that they’re merely denying coverage of “unnecessary” procedures or medications, or that their decisions are made in the best interest of the patient/policyholder, then they should have no problems bearing liability.
Editorials represent the views of CodeBlue as an institution, as determined through debate in the newsroom. CodeBlue’s Editorial Board comprises editor-in-chief Boo Su-Lyn, senior health writer Alifah Zainuddin, and sub-editor Chua Chern Toong.
