NAMLIFA Cautions Discrepancies In Private Hospital Charges Can Make Medical Insurance Unsustainable

By Nurunnasihah Ahmad Rashid

KUALA LUMPUR, March 9 (Bernama) -- The National Association of Malaysian Life Insurance and Family Takaful Advisors (NAMLIFA) has urged the government to address the significant price disparity between insured and cash-paying patients at private hospitals, warning that such discrepancies could make medical insurance unsustainable.

NAMLIFA president Krishnan Appanu said the government should also mull setting up national social insurance, regulate hospital pricing and, more importantly, possess the political will to ensure profits do not overshadow patient welfare.

Krishnan lamented that the issue, which has persisted for years, places an undue financial burden on policyholders while allowing private hospitals to inflate charges for insured patients.

“It is an open secret that private hospitals impose higher charges on insured patients compared to those who pay out of pocket,” he told Bernama recently.

Healthcare is not just a business but a necessity

Krishnan said that healthcare is not just a business but a necessity.

He highlighted that about 54 per cent of the population currently have medical insurance.

“This practice not only affects policyholders but also contributes to the rising cost of medical insurance premiums,” he said.

According to a news report, many policyholders are planning to surrender their policies due to rising premiums.

Krishnan urged the Ministry of Health (MOH) to step in and regulate hospital pricing to ensure fairness, adding that NAMLIFA has been receiving continuous complaints from policyholders about inconsistencies in billing.

“The government must take immediate action to monitor and standardise these charges (as) without intervention, insurance premiums will continue to rise, making healthcare coverage increasingly unaffordable,” he added.

PAC report to address the issue

The issue has been gaining traction lately, with Deputy Finance Minister Lim Hui Ying informing Parliament late last month that a detailed study is needed to examine the differences in private hospital charges between patients using guarantee letters and those who pay upfront before seeking reimbursement.

The issue is expected to be the key focus in the Public Accounts Committee (PAC) report on rising health insurance and takaful premiums and private hospital charges, which will be tabled at the Dewan Rakyat session in June.

Krishnan said he was hopeful the report would pave the way for long-term healthcare policy reforms, particularly in addressing premium repricing, which has become a major concern for ageing policyholders.

“We expect the PAC report to provide a clear framework that ensures fair pricing mechanisms and sustainable insurance premiums.

“Without concrete solutions, the increasing cost of healthcare will push more Malaysians into financial hardship,” he said.

Call for social insurance scheme

In addition to regulatory intervention, NAMLIFA called on the government to explore the establishment of a national social insurance scheme that would enable Malaysians to seek treatment at both public and private healthcare facilities.

“A well-structured social insurance scheme could balance the interests of policyholders, insurers and healthcare providers.

“This would prevent an over-reliance on private insurance while ensuring equitable access to quality healthcare,” Krishnan said.

He added that without strong political will and decisive policies, the healthcare ecosystem would continue to be driven by profit at the expense of the people’s well-being.

In emphasising that healthcare was not just a business but a necessity, he said the government must take decisive action to ensure that profit-seeking does not overshadow patient welfare,” he stressed.

Regulators must act

NAMLIFA also urged Bank Negara Malaysia (BNM) to ensure that consumer rights are protected amid medical insurance premium repricing exercises.

“The recent cap limiting premium increases to a maximum of 10 per cent until 2026 is a step in the right direction.

“However, policyholders must not face unnecessary delays or rejections in claim settlements as a result,” he said.

NAMLIFA said the government should consider consolidating high-claims insurance pools into larger groups to improve risk management efficiency to further stabilise the medical insurance industry.

“We also called for a collective effort from the Ministry of Health (MOH), BNM and the Ministry of Finance (MOF) for tighter regulations on excessive annual medical limits in insurance policies, which have contributed to inflated medical costs.”

“In addition, NAMLIFA suggested the use of technology to monitor and enforce fair pricing for medical treatments and pharmaceutical supplies, ensuring that insured patients are not unfairly charged higher rates compared to cash-paying individuals,” Krishnan said.

Ensuring sustainable medical premiums

Beyond government action, NAMLIFA also highlighted the importance of educating the public on responsible medical insurance usage and encouraging insurers to offer more flexible and sustainable insurance plans.

Krishnan said the insured public must treat medical insurance as a necessity rather than a privilege to be overutilised.

“Abuse of insurance policies, such as excessive claims and unnecessary treatments, contributes to higher costs,” he added.

-- BERNAMA