MCA said while the Finance Ministry (MOF) has recently introduced medical premium-sharing measures, it is crucial to clarify that the move is a short-term plan aimed at alleviating the rising costs of insurance premium which still fails to address the root cause of the problem.
Its vice president Datuk Lawrence Low pointed out that at the heart of the matter lies the public’s concern about the rationale behind the continuous surge in premiums and medical costs, and Deputy Finance Minister Lim Hui Ying must come forward to provide a clear explanation and justification for these price increases, addressing the reasons for the rise and offering assurances that they are necessary.
“Asking policyholders to contact insurance companies directly to apply for the Medical Premium-Sharing measure significantly increases their burden,” Low stated.
“This introduces several problems, including uncertainty about whether there will be a clear written record of these requests, whether insurance companies are equipped to process large volumes of applications efficiently, and whether these critical issues were fully considered before launching the policy.
“The current approach from the minister only exacerbates the public’s frustrations. It also risks making it easier for insurance companies to delay or procrastinate in finding more effective solutions.”
Low further expressed concern over Lim’s response to criticism about the request, where the Tanjong MP said MOF will liaise with insurance companies to address the issue.
“This is as though the problem had only just come to light. Even more concerning is her comment that the matter will be discussed after a statement from Bank Negara Malaysia, which can only be interpreted as a delay with no clear timeline in sight,” he lamented.
“The problem is already evident, yet the government is waiting for an announcement to consider action.
“This approach essentially forces the public to continue absorbing the financial impact of price hikes. The government must not repeatedly shift responsibility onto the people, especially when it comes to policies that affect public welfare.”
More comprehensive approach needed
Low said the government needs to adopt a more comprehensive and forward-thinking approach when formulating significant policies to avoid creating further problems due to lack of detail in implementation.
“The government only spares a look at the flaws in the system when public dissatisfaction reaches a boiling point. This reactive approach to fix things when it becomes a tipping-point problem only adds to the burden the nation feels,” he continued.
“The root cause of the premium surge is not solely the fault of the insurance companies, but also the continually rising charges at private hospitals.
“Without transparency and standardisation in medical costs, even the best-intentioned premium-sharing policies will only treat the symptoms, not the underlying cause.”
Low stressed that the government must legislate to regulate private hospital charges, enforce transparency in pricing structures, and set reasonable fee limits.
This would not only help curb rising medical costs but also create a healthier operating environment for the insurance industry, thereby addressing the ongoing increase in premiums at its source.
“We must urgently push for reforms in medical costs, such as adopting international best practices, promoting bulk purchasing of medications, and encouraging the use of generic drugs to reduce drug costs,” he emphasised.
“Furthermore, introducing a diagnosis-related group (DRG) payment system would help reduce over-medicalisation and improve the efficiency of medical resource utilisation.
“Additionally, the government must strengthen the public healthcare system by increasing investment in public healthcare, thus alleviating the pressure that high private hospital costs place on public hospital resources.”
Low noted that without long-term solutions, this ‘premium crisis’ would likely repeat itself in just three years.
“What policyholders need is a fair, transparent, and sustainable premium system. Only through long-term planning and comprehensive consideration of relevant policies can the government fulfil its commitment to the people and resolve the issue of skyrocketing premiums once and for all,” he added. – Jan 14, 2025
