KUALA LUMPUR — Bank Negara and the Health Ministry must address reasons behind the rising cost of private healthcare which insurers claim has forced them to raise medical insurance premiums by 40% to 70% next year, DAP lawmaker Lim Guan Eng said.
Raising premiums is not a solution as this does not address some of the reasons behind the rising costs of private healthcare, the Bagan MP said in a statement today.
Lim flagged acquisitions of private hospitals by private funds as a possible reason for higher private healthcare costs.
“Expensive buyouts by private equity funds of private hospitals may result in higher medical charges to allow these private equity funds to claw back their pricey investments could also be a factor for higher medical costs,” the DAP chairman said.
He also cited Bank Negara figures on the profitability of insurers, questioning their justification for raising premiums.
“According to Bank Negara, overall profitability of life insurance and family takaful funds was higher in the first half of 2024 at RM8.4 billion, as compared to the second half of 2023 at RM3.2 billion.
“Have life insurance companies not earned enough? Why should the life insurance companies be allowed to earn more profits from income off the backs of hard-working and hard-pressed Malaysians?” he added.
Given their healthy profits, Lim said there was no urgency for them to raise medical insurance premiums in such a “massive and excessive” manner.
“It is socially and morally unacceptable for life insurance companies that have recorded a healthy profit growth to seek higher profits at the expense of ordinary Malaysians already struggling with rising costs that outpace growth in salaries and wages.
“Do our salaries go up by 40-70%?” he said.
The hike will also lead to negative consequences for public healthcare, with many Malaysians cancelling their medical insurance policies to turn to the already overburdened and overstretched public healthcare system, Lim added.
He urged member companies of the Life Insurance Association of Malaysia (Liam) to seriously reconsider their stand on proceeding with higher premiums next year, appealing to them to carry out the repricing adjustments in a gradual, sustainable and reasonable quantum.
Bank Negara in a November 28 statement on public concern about the premium hikes directed insurance and takaful operators to review their current “repricing strategies for more reasonable implementation”.
However, the central bank also cited the significant rise in medical cost inflation and increased utilisation of medical services and procedures as reasons for the premium hikes. – December 3, 2024