THE Life Insurance Association of Malaysia (LIAM) has clarified that there will be no immediate changes to the recent medical insurance premium hikes, which range from 40 per cent to 70 per cent, reported Business Times.
Its chief executive officer Mark O'Dell said that insurers have instead agreed to implement gradual repricing adjustments for the future.
Last week, LIAM, the Malaysian Takaful Association (MTA) and Persatuan Insurans Am Malaysia (PIAM) in a joint statement directive by Bank Negara Malaysia (BNM) to review its repricing strategy.
O'Dell however in an interview with Business Times explained the statement referred to future repricing adjustments and not a review of the recent premium hikes for medical and health insurance/takaful (MHIT).
He further explained that insurers could look at more frequent repricing adjustments in the future, to ensure that it is below a certain level and not burdensome for policyholders.
This is opposed to the current practice of aggregating the increase over three or four years.
O'Dell explained that the 40 per cent to 70 per cent increase reflects a catch-up from pre-COVID times, as insurers had been asked to delay repricing during the pandemic.
"The MHIT pricing cycle, the companies will look at their premiums every three years, it is often misunderstood when there's a 50 per cent increase, it's not just a one-year increase, it's for three or four years," he clarified.
In the joint statement by the insurers, it said rising costs of medical treatments, advanced healthcare technologies, and increased utilisation of healthcare services, have made premium repricing an unavoidable measure.
"To the authorities, we have been asking for the Ministry of Health (MoH) to mandate cost containment functions at private hospitals as a precursor to diagnostic-related group pricing, and to have a road map toward implementation of diagnostic-related group pricing, which we think will drive more efficiency in hospitals," he added.
O'Dell said discussions are ongoing with BNM and the MoH to explore measures insurers can take to address the situation. - December 3, 2024
