AS the saying goes “the health of nations is more important than the wealth of nations,” healthcare is the one of the most important components in a country.
Malaysia has a dual-tiered system of healthcare services: a government-led and funded by taxpayers and the thriving private sector.
Generally, medical care and treatment at government hospitals are affordable, however Malaysians tend to choose seeking care from private hospitals, as its services and care are perceived to be better, and the waiting time is much shorter.
Of course, choosing to go to a private hospital comes with a higher price tag, which is on an upward trend. It was reported that Malaysia’s cost of medical care has been rising above the global average in the recent years.
It is among the highest in Southeast Asia and one of only two countries (besides Pakistan) in the Asia Pacific which experienced double-digit medical inflation last year at 13.6%, an increase from 12.4% in 2018.
Having a medical insurance has therefore become an essential due to ascending medical cost. This has turned the insurance industry into a highly competitive sector as insurance providers deal with soft pricing conditions and tight profit margins.
This has led to medical insurance premiums in Malaysia to increase at an unsustainable rate in recent years – at an annual rate of 6% to 8%. Malaysia’s medical insurance premiums are anticipated to increase up to 30% in 2020 on the back of rising healthcare costs.
“Malaysia’s healthcare sector stands to benefit from the government’s plans to raise health insurance premiums in order to reduce its financial deficit,” said Fitch in a report.
Fitch added that the Malaysian Government will face challenges in meeting the financial and social service needs of a rising number of senior citizens, which will escalate healthcare costs, and a shrinking productive workforce. As such, funding is Malaysia’s main challenge in achieving a sustainable universal healthcare financing model.
“As Malaysia’s economy expands, this proportion will increase further, bringing commercial benefits to pharmaceutical companies, medical device manufacturers and healthcare infrastructure firms,” Fitch added.
However, can Malaysians especially those in low-income group afford to have medical insurance?
Based on a survey conducted by Ministry of Health (MOH), 46% of the Malaysian population rely solely on healthcare coverage provided by the government.
They do not have any form of supplementary financial coverage for their healthcare needs and solely rely on existing tax-funded healthcare coverage.
In addition, the survey also found that about 71% of the poorest 20% in the country do not have additional healthcare coverage besides what is already provided by the government. – Jan 3, 2020
