Insurance companies announce higher premiums as healthcare costs go up

Malaysia ranks among the highest in South East Asia in terms of expected increases in medical costs.

PETALING JAYA: Malaysians will be paying higher medical insurance premiums this year, as major insurance companies cite a spike in healthcare costs, FMT has learnt.

Insurance companies and agents told FMT that the move was inevitable in view of high inflation in medical and hospitalisation costs in recent years.

They also said the increase in premium, said to be up to 30%, was due to technological advancement in treatments as well as an increase in 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 healthcare inflation,” said AIA Berhad in a notice sent to its customers this week.

When contacted by FMT, an insurance agent with AIA confirmed the increase, while another from Zurich Malaysia said the company had started to inform clients of the revised rates.

“We have received calls from our clients asking why they are required to pay more for their medical plans,” he said.

When contacted, Zurich Malaysia rebuffed an FMT request for details on the price hikes.

Last year, a survey on medical trends by global insurance consultants Willis Towers Watson found that Malaysia ranked among the highest in South East Asia in terms of expected increases in medical costs.

The General Insurance Association of Malaysia (PIAM) had reported that total health expenditure in 2018 was RM60.147 billion, of which 52% was funded by the government and the rest paid by private households (35%), private insurance (7%), corporations (4%) and other agencies (2%).

“If healthcare costs are not contained, the increase in premiums for medical and health insurance will be inevitable,” PIAM had said.

“If medical insurance is no longer affordable, it will drive more patients to seek treatment at government hospitals.”

Although medical insurance can come in all shapes and sizes, most policies these days are comprehensive, with policy holders given medical cards for admission to hospitals.

The latest premium increase is on top of the regular revisions based on the age factor.

With a typical standalone policy, a policy holder can expect the premiums to go up, often according to five-year age bands.

An AIA spokesman said all medical plans in Malaysia were priced by actuaries but insurance companies would also factor into the price an inflation rate of 6% to 8%.

He said the expected increase in claims for 2019 was 13%. As a result, he added, insurance companies had had to revise their premium costs upwards.

He advised policy holders to exercise wisdom as consumers.

“Even if your hospital bill is covered by your insurance policy, the cost of each treatment will count towards your yearly and lifetime limits,” he said.

“In the end, lower claims will result in lower premiums for all policy holders.”