Formulate social health insurance framework, think tank urges govt

Galen Centre for Health and Social Policy says a social health insurance will serve as competition to private health insurance companies. (Bernama pic)

PETALING JAYA: The Galen Centre for Health and Social Policy has urged Putrajaya to formulate a social health insurance framework following reports that insurance companies will be announcing higher premiums this year as healthcare costs spike.

Galen CEO Azrul Mohd Khalib said less than 30% of Malaysians have insurance for deadly diseases such as cancer, stressing that there was a need for innovation in this area of healthcare.

“A social health insurance framework will pool funds and risks across the population, and ensure those in need of medical coverage are able to receive it,” he said in a statement today.

Azrul said it will also serve as competition to private health insurance companies while helping to moderate the costs imposed by private healthcare providers.

He added that competition from the framework could control the increasing cost of healthcare in the country as it would limit payouts to private healthcare providers at “more reasonable and transparent levels”.

“People could opt out of social health insurance if they already have such protection and prefer their existing arrangement,” he said.

On Wednesday, FMT reported that Malaysians will be paying higher medical insurance premiums this year as major companies cite a spike in healthcare costs.

Insurance companies and agents told FMT that the move was inevitable due to high inflation in medical and hospitalisation costs in recent years, as well as technological advancements in treatments and an increase in number of patients.

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.

Azrul expressed concern that the nation recorded a medical inflation rate of 13.6% last year when the general inflation rate was only around 2%, making Malaysia the only South-East Asian country to have recorded a double-digit rate.

“The reality is that rising premiums are caused by insurance companies passing on the escalating costs of being diagnosed and receiving treatment in private healthcare facilities and charges imposed by third party administrators to policyholders.”

He said existing policyholders will either reduce their insurance coverage or drop out as a whole due to the increase in premiums, adding that this was not beneficial for healthcare providers and insurance companies.

“There must be a compromise between all parties involved to keep costs under control.”