Co-payment requirements for medical and health insurance and takaful products to promote sustainability, affordability — BNM

Bank Negara Malaysia (BNM) clarified on Saturday recent commentaries related to the implementation of co-payment requirements for medical and health insurance and takaful (MHIT) products, saying it aims to promote sustainability and affordability.

“The Policy Document on Medical and Health Insurance/Takaful Business aims to promote more sustainable and affordable MHIT offerings amid continued increase in medical cost inflation,” it said.

In 2023, Malaysia recorded medical cost inflation of 12.6%, which was significantly higher than the global average of 5.6%, the central bank said in a statement here on Saturday.

It said that with effect from Sept 1, insurers and takaful operators (ITOs) must offer consumers an option to purchase MHIT products with a co-payment feature. Consumers who have already purchased MHIT products without a co-payment feature can continue with their existing MHIT products at renewal. ITOs can also continue to offer MHIT products without a co-payment feature to new consumers.

With the option of co-payment, consumers can avail themselves to lower-cost MHIT products based on their financial circumstances and needs. MHIT products with co-payment features are not new in the Malaysian market.

It is observed that the premium/contribution level for MHIT products with co-payment features is 19% to 68% lower compared to similar products without co-payment features depending on the level of co-payment. ITOs are expected to offer a range of co-payment levels that cater to varying financial needs and circumstances of consumers.

Co-payment subject to maximum cap set by insurers and takaful operators

Co-payments are also subject to a maximum cap set by ITOs which serves to limit the amount of expenses borne by policy owner/takaful participants.

To further promote affordability and safeguard consumer interests, the Policy Document on Medical and Health Insurance/Takaful Business also sets out the following requirements to be observed by ITOs:

  • Co-payments shall not apply in the following circumstances:
    • Emergency treatment, including in accident cases;
    • Outpatient treatment for follow-up treatments arising from critical illnesses such as cancer or kidney dialysis; and
    • Treatment sought at a government healthcare facility.
  • ITOs shall give due consideration to any financial hardships or extenuating circumstances faced by a policy owner/takaful participant and may apply their discretion to waive co-payments in such circumstances.

BNM said greater take-up of co-payment MHIT products over time aims to help contain medical cost inflation in Malaysia by controlling the over-consumption of health services, alongside other healthcare reforms envisaged in the Health White Paper published by the government.

These include improving the transparency of medical costs to support consumers in making more informed choices when seeking treatment and transforming the health services delivery.

As such, a whole-of-nation approach is critical to address medical cost inflation across the healthcare value chain, it explained.


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