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The Health | March , 2021
| Biz Health |
Health insurers slammed
Steep increase in health premiums criticised by consumers given current economic scenario and hardships
BY KHIRTINI K KUMARAN
At a time when policyholders
are grappling with the crippling effects of the Covid-19 pandemic , health insurance companies have seen it fit to go ahead and raise health premiums by up to 30 per cent this year .
This is despite calls by consumer groups last year that such a move would be unwise given that thousands of policyholders might have lost their jobs , suffered pay cuts or other forms of loss of income .
The Federation of Malaysian Consumers Association ( FOMCA ) has slammed the higher premiums and has instead called on health insurers to provide a moratorium in premiums to financially-hit policyholders . Insurance companies , though , have preferred to keep mum .
The Health contacted Prudential Malaysia Bhd , AIA , Great Eastern , AXA Affin , Hong Leong Assurance , AmMetLife , Tokio Marine , Liberty Insurance and Manulife . Prudential , Great Eastern and Manulife declined to comment , while the rest
Dr Marimuthu did not respond .
Bank Negara Malaysia ( BNM ), which oversees the insurance industry and usually approves any rise in premiums , also declined to comment .
As the blame game continues as to who is responsible for the country ’ s medical inflation , it ’ s the policyholders who are bearing the brunt by paying higher premiums .
FOMCA President Datuk Dr Marimuthu Nadason was shocked and said the astounding 30 per cent increase was atrocious and uncalled for .
“ Not at this critical time when the whole nation is facing a pandemic and financial crisis . Many policyholders have lost their jobs , and some have taken pay cuts ,” said Marimuthu .
“ We predict that there will be many cases where the policy will lapse , and there is also a possibility that many cannot pay the premiums .”
In such a situation , he said , some policyholders will be denied the right to use their medical cards just because they had not updated their premiums .
Marimuthu also questioned if the insurance industry was unaware of the current calamity and the nation ’ s financial situation and consumers .
He proposed they followed the banks ’ example and provide policyholders with a moratorium for a year or two .
“ They should not collect premiums from policyholders who have lost their jobs or taken pay cuts .
“ Banks are giving moratorium where consumers who have taken loans can defer their payment , unlike insurance companies .
“ Although both conventional banks and the insurance industry fall under the purview of BNM , why did BNM give the approval for a moratorium to banks and did not impose it on medical insurers too ?”
Parti Sosialis Malaysia ( PSM ) Chairperson Dr Jeyakumar Devaraj was not surprised at the latest premium hike .
“ Health insurance should ideally be run by a not-for-profit trust with communityrated premiums ( not risk-rated ). The government should step in to pay insurance premiums for the people who can ’ t afford it , like how our Social Security Organisation ( SOCSO ) is structured ,” said Dr Jeyakumar .
Whether the steep hike in premium was justified , he said health insurance run by for-profit corporations is not justified and fundamentally flawed .
“ You can ’ t tinker with it and make it better . You got to replace it .
“ It is not the right way to try and protect a community from the economic effects of