BNM mandates cost-sharing in medical and health insurance, takaful products

Bank Negara Malaysia (BNM) has required insurers and takaful operators (ITO) to introduce cost-sharing features in their new medical and health insurance and takaful (MHIT) products starting in the third quarter (3Q) of this year.

Deputy Finance Minister Lim Hui Ying said this is one of the measures to deal with the sudden increase in premiums or contributions for MHIT products.

“This aims to encourage more responsible use of health services and further lower the costs that need to be jointly borne by the ‘pool’ (based on the concept of risk pooling).

“This measure can also reduce false claims and in turn, lower overall costs and improve the long-term sustainability of MHIT products,” she said

Lim said that based on experience in several countries, MHIT products with cost-sharing features have lower insurance premiums or takaful contribution rates than products without cost-sharing features.

Additionally, she said the central bank has introduced the requirements for ITO companies to ensure that MHIT products remain sustainable and affordable via the establishment of an integrated claims database.

“The establishment of this integrated claims database can help the ITO to better identify and deal with the increase in the cost of medical claims.

“This database allows the ITO to compare the charges charged by different private hospitals as well as monitor the inflation of the annual claims of the entire ITO industry,” she said.

This database will also pave the way towards the publication of medical costs for common procedures to make it easier for users to make decisions about treatment facilities and purchase insurance based on sufficient information, she added. — Bernama

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