PETALING JAYA: A leading consumer group has expressed concerns over Bank Negara Malaysia’s recent announcement that insurance companies must introduce medical and health policies with a “co-payment” feature option starting Sept 1.

The Federation of Malaysian Consumers Association (Fomca) said the announcement lacks clarity on the implementation timeline and details, leaving a large part of the process “vague”.

Its chief executive officer Saravanan Thambirajah said the co-payment feature would create more issues for consumers, as they might have to fork out more money for their medical coverage.

“We know how time consuming it can be for consumers to get their guarantee letters and other insurance documents sorted out before admission to hospitals.

“Some have no choice but to pay out of their pocket first, hoping to claim it back later.

“The claims take time and may not be fully reimbursed. Consumers will ultimately have to pay more at hospitals,” he said.

Saravanan said the announcement is not welcome as it is unclear how co-payments would “encourage consumers to take a more active role in their medical health insurance coverage and claims”.

He said the insurance industry should provide data and statistics to justify the co-payment feature as a countermeasure against fraudulent claims before blaming consumers.

“We know that our hospital bills can differ significantly between insured and self-paying patients.

“The industry should come up with proper guidelines and procedures to address this prevalent issue,” he added.

Saravanan said the insurance industry should not be allowed to self-regulate, especially when it comes to setting the maximum cap for the co-payment feature.

“We must remember there are those who cannot afford private healthcare and turn to the overwhelmed public hospital system, making insurance coverage essential.

“This is even more apparent after the Covid-19 pandemic, where medical insurance premiums increased by between 500% and 3,000%, which made no sense.

“We need to revamp our medical insurance industry, especially their premiums, to better protect consumers.

“We also need strict monitoring and regulation by the authorities to prevent the industry from taking advantage and increasing premiums excessively,” he said.

Saravanan said the co-payment feature could discourage medical insurance uptake, as people might not have the means to afford the additional out-of-pocket costs.

“Let’s say your medical treatment is RM100,000 and you need to co-pay 10% of it, which is RM10,000.

“Where would people find the money?

“They might switch back to the already overwhelmed public healthcare system,” he added.

While many consumers are unaware of the announcement, Saravanan expressed concerns about the potential long-term impact.

“How long do we have before it is compulsory?

“While some consumers may see lower premiums in the short term, leading to increased sign-ups, there could be tougher times in the long run when people cannot fork out the co-payment when they need coverage the most,” he warned.

Saravanan said as the regulator, Bank Negara should take a more active role in protecting consumers.

“They should set up a neutral council consisting of all stakeholders to come in and advise them on what good regulations should be set so that consumers are not affected.

“We need better stakeholder engagement to get feedback before they make such an announcement,” he said.

Pharmaceutical representative Felicia May Jackson said she is concerned about how the new co-payment feature might affect her plans to get health insurance.

“If I sign up for a policy now, will this new rule affect me?

“Will it affect me next year or a few years down the road?” asked the 24-year-old from Subang Jaya.

Graphic artist Asfalily Kasim, 43, from Klang, said the quantum of the co-payment should be determined by the government, not the insurance companies.

“If the rate goes by percentage, it can be a burden to many Malaysians in the B40 and M40 groups when their medical bills are high.

“This beats the purpose of having medical insurance coverage in the first place,” she said, adding that consumers must be protected in this process.

Healthcare practitioner Callum Seng, 32, said he understands where the decision came from considering the increasing healthcare costs globally.

“It is likely going to be the mainstream for medical insurance in the future.

“However, the government should be the decision maker and set the rules for the co-payment, striking a balance so that public healthcare is not overwhelmed, while the people’s need for quality healthcare is not compromised,” he said.