KUALA LUMPUR: The Malaysian Financial Planning Council (MFPC) is advising insurance policyholders to keep their policies active despite recent adjustments in premiums, following Bank Negara Malaysia’s (BNM) introduction of interim measures to manage medical and health insurance/takaful (MHIT) premiums.
According to BERNAMA News Agency, the central bank revealed the measures on December 20, aiming to support policyholders affected by MHIT premium changes. The initiative underscores the significance of preserving financial stability and maintaining insurance coverage during these adjustments.
MFPC President Andy Ng Yen Heng emphasized the importance of utilizing these measures and maintaining insurance coverage, describing it as a fundamental aspect of financial planning. He warned that losing coverage could leave individuals vulnerable to financial challenges in unexpected circumstances. Public healthcare, while an alternative, might involve longer waiting times and limited treatment options, Ng said in a recent interview with Bernama.
Ng outlined the measures, which include spreading premium adjustments over three years, halting premium hikes for senior citizens, reinstating lapsed policies without additional underwriting, and providing alternative products at comparable or lower premiums.
In advising policyholders, Ng encouraged those who have terminated or allowed policies to lapse to promptly reinstate their coverage under the new guidelines. He urged individuals to adjust their financial plans to accommodate the premium changes by evaluating cash flow, reducing discretionary expenses, and consulting professional advisors to ensure healthcare needs do not compromise long-term financial stability.
Ng noted that for new or upgrading policyholders, it’s crucial to review proposed plan benefits to ensure they meet personal needs, budgets, and sustainable premium payments. He cautioned that upgrading or replacing existing policies could involve risks, such as potential claim denials for pre-existing conditions during waiting periods.
Ng called for a collaborative approach to addressing medical cost inflation, which is projected to rise by 15 percent in 2024, surpassing both global and regional averages. While the interim measures offer timely relief, he urged the Ministry of Finance, Ministry of Health, BNM, and other stakeholders to develop sustainable strategies to curb escalating medical costs and craft value-based MHIT products.
BNM Governor Datuk Seri Abdul Rasheed Ghaffour previously highlighted the necessity of tackling the root causes of rising insurance and takaful premiums, driven by higher medical costs and increased utilization of services. Ng stressed the importance of designing MHIT products to be more sustainable and aligned with value-based healthcare, focusing on improved health outcomes.
“This is a complex challenge requiring concerted efforts from all stakeholders across the healthcare ecosystem,” Ng concluded.