KUALA LUMPUR, Sept 5 (Bernama) -- The introduction of co-payment options for medical and health insurance is anticipated to have a negligible impact on private hospital operators in Malaysia in the near term, according to CIMB Securities Sdn Bhd.
The firm highlighted several factors underpinning this forecast.
Co-payment features are already present in the Malaysian insurance market. Current policyholders are not obligated to switch to co-payment plans, and new policyholders can opt for non-co-payment alternatives if preferred.
"While the policy could potentially increase medical insurance penetration and expand the customer base for private hospitals, particularly among the M40 income group who may find the co-payment plans more affordable, we expect any significant rise in policy uptake to take time to build momentum," CIMB said in a research note.
Effective from Sept 1, 2024, Bank Negara Malaysia will mandate insurers and takaful operators to offer medical and health insurance products with co-payment options, such as deductibles and/or co-insurance/co-takaful, for new and renewed policies.
Policyholders will be required to contribute a minimum co-payment of 5.0 per cent of total claimable expenses, after deductibles, per policy year, and/or a RM500 deductible per policy year.
As the uptake of co-payment plans grows, CIMB Securities observed that the share of out-of-pocket payments for private hospital operators might increase, which could elevate credit risks for these operators.
"The transition from increased co-payment insurance plan adoption to the actual realisation of medical claims from these plans is likely to take several years, allowing private hospital operators time to adapt and manage any operational and credit risk challenges," it said.
Overall, CIMB Securities maintains an "overweight" stance on the healthcare sector, with IHH (stock code: 5225) as its top pick.
The firm also expects demand for private healthcare services to remain resilient in the second half of 2024.
-- BERNAMA
