WHILE the public healthcare system is relatively efficient in delivering healthcare to the rakyat, it is overburdened. There have been clear reports of bed shortages, long waits for access to specialists and even longer waits for emergency treatment.

The government, via the Health White Paper, is exploring the best way to address these issues.

For consumers to access shorter waiting times, choice of care provider and the latest treatment options without enduring undue financial stress is through private medical insurance.

Private health insurance may not be the best option, as premiums are usually risk-rated, which means those with pre-existing conditions and higher risk factors such as the elderly face higher, often unaffordable premiums or are denied coverage. Further fee-for-service reimbursement encourages unnecessary investigations and over-treatment. Such investigations escalate costs and raise premiums, further burdening the consumer.

Yet in the face of an overburdened public healthcare system, consumers are often forced to access private healthcare. Without some form of insurance, they are forced to pay out of pocket (OOP). This of course is the most disastrous form of financing healthcare as it could cause financial catastrophe.

But OOP expenses (OOP) have been increasing. In 2020, Malaysians spent RM22.6 billion for OOP healthcare expenses. In 2021, this increased to RM26.6 billion. This could certainly cause severe hardship for individuals and families.

Compared with OOP expenses, private health insurance is a better choice. Yet in 2021, only 7.1% of healthcare financing was from private insurance companies. The Health Ministry accounted for 49.3%, while OOP was 31.5% of total healthcare financing.

The National Health and Morbidity Survey 2019 showed 78% of Malaysians lacked private health insurance, with 43% citing affordability as the primary obstacle.

Despite the limited percentage of consumers having private health insurance, there have been some very serious complaints and issues. This included mis-representation of insurance products, limited coverage for medical care, suboptimal reimbursement policies, and claim disputes.

To address these issues, the Federation of Malaysian Consumers Associations (Fomca) supports the establishment of a regulatory body to oversee health insurance payouts. The body would primarily function to govern reimbursement practices by private payers to ensure fairness to consumers.

The payment structure should be transparent and ethical, not left to the whims and fancies of the payers. The regulatory agency should also mediate grievances between consumers, service providers and insurance companies.

In healthcare, Fomca’s first choice will always be the public healthcare system to ensure healthcare is accessible to all Malaysians. Yet, a well-regulated private healthcare system will ensure fairness for those who hold private medical insurance policies. Private health insurance is certainly a better mode of financing compared with OOP expenses. – September 21, 2023.

* Paul Selva Raj is Fomca deputy president.

* This is the opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insight. Article may be edited for brevity and clarity.