Malaysia's healthcare sector gains from insurance premium hike
Most national health insurance schemes have raised premium amidst the pandemic.
Malaysia's healthcare sector stands to benefit from the government's plans to raise health insurance premiums in order to reduce its financial deficit, according to a report from Fitch Solutions.
The government will face challenges in meeting the financial and social service needs of a rising number of senior citizens, which will escalate healthcare costs, and a shrinking productive workforce. As such, funding is Malaysia’s main challenge in achieving a sustainable universal healthcare financing model.
"Malaysia’s medical insurance premiums will increase up to 30% in 2020 on the back of rising healthcare costs. Another factor contributing to increase in insurance premiums is the technological advancements in treatments followed by the increase in patient count," the report stated.
The government support for the provision of medical services reinforces the positive outlook for healthcare providers, Fitch said. In October, the Ministry of Health was allocated $7.4b (MYR30.6b) compared with $6.9b (MYR28.7b) in the previous year.
This includes the budget for the construction of new hospitals and the expansion and upgrading of existing ones as well as for the construction and upgrading of health and dental clinics and upgrading of medical equipment. MySalam payment 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," Fitch said.
Most other national health insurance schemes have also raised health insurance premiums amidst the COVID-19 pandemic. In May, Indonesia raised premiums for health insurance and also ramped up subsidies for the lowest rate.
The government hiked the lowest premium managed by insurer BPJS Kesehatan by 65% a month starting in July, but announced that it would subsidise all of the increase. Premiums for other policies will be nearly doubled, with the highest rate to reach $1.2 (IDR150,000) 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.