1 month ago
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PETALING JAYA: Challenges in meeting financial and social service needs of a growing population of senior citizens from longer lifespans, stagnating birth and fertility rates, escalating healthcare costs and a shrinking productive workforce will translate into a likely increase in health insurance premiums, according to Fitch Solutions.
“As such, the challenge in working towards Malaysia’s aspiration of achieving a truly sustainable universal healthcare financing model is – funding,” it said in a report.
Thus, the research arm of Fitch Ratings believes that Malaysia is set to raise premiums significantly in order to reduce its financial deficit.
It projected that the country’s medical insurance premiums will increase up to 30% in 2020 on the back of rising healthcare costs and the technological advancements in treatments followed by the increase in patient count.
However, the research unit pointed out that Malaysia is not alone in this situation, as most other national health insurance schemes have also raised health insurance premiums amid the Covid-19 pandemic.
In May 2020, Indonesia raised premiums for health insurance and increased subsidies for the lowest rate, impacting tens of thousands of policyholders.
The research arm elaborated that the Indonesian government hiked the lowest premium managed by insurer BPJS Kesehatan by 65% a month starting in July 2020, but announced that it will subsidise all of the increase.
It said that premiums for other policies will be nearly doubled, with the highest rate to reach 150,000 rupiah a month, with no subsidy provided.
“Similarly, in the wake of a recent warning that Taiwan’s National Health Insurance’s reserve funds will be fully depleted by the end of 2021, Taiwan’s health minister urged a premium hike to maintain the quality and sustainability of the system in October 2020.”
Fitch Solutions highlighted the government support for the provision of medical services reinforces the positive outlook for healthcare providers.
In October last year, then finance minister Lim Guan Eng allocated RM30.6 billion in the annual budget for the health ministry, an increase from RM28.7 billion allocated for 2019.
It pointed out that the allocation included budget for the construction of new hospitals and the expansion and upgrading of existing hospitals, for the construction and upgrading of health and dental clinics and to upgrade medical equipment.
Meanwhile, the MySalam payment for hospitalised Malaysians will be expanded to cover new illnesses and those up to 65 years of age, from 55.
“As Malaysia’s economy expands, this proportion will increase further, bringing commercial benefits to pharmaceutical companies, medical device manufacturers and healthcare infrastructure firms,” said Fitch Solutions.
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