BNM: Co-pay health insurance an incoming ‘option’, not replacing current policies

Malay Mail
Malay Mail
  • Insurers must start offering co-payment options from September 1 in addition to existing polices.

  • Co-payments will not apply to emergencies, outpatient treatment for critical illnesses, or visits to public hospitals and clinics.

  • The move is to address Malaysia’s unusually high medical cost inflation of 12.6 per cent in 2023, versus the global average of 5.6 per cent.

KUALA LUMPUR, July 6 — Insurance companies will offer some medical and health coverage policies with a “co-payment” feature from September 1 for consumers to have cheaper and more affordable options, Bank Negara Malaysia (BNM) said today

Co-payment is a feature is where the insurance companies and customers share the costs for medical treatments.

“With effect from 1 September 2024, insurers and takaful operators (ITOs) must offer consumers an option to purchase medical and health insurance and takaful (MHIT) products with a co-payment feature,” BNM said in a statement today.

BNM said the option of co-payment meant that consumers will be able to buy cheaper or lower-cost medical insurance based on their financial circumstances and needs.

It added that insurance companies could continue selling insurance policies without the cost-sharing feature, while customers also have the option of renewing their existing medical insurance policies without this feature even after September 1.

Noting that medical insurance policies with co-payment features are not new in Malaysia, BNM said insurance policies with co-payment features could result in premiums or contributions that are between 19 per cent to 68 per cent lower than insurance policies without such features, depending on the level of co-payment.

It said that insurance and takaful providers will also set a maximum cap or maximum level of the co-payments, which will then limit the amount of expenses that consumers have to bear.

Citing its February 2024 policy document on medical and health insurance/takaful business, BNM said insurance companies must ensure that co-payments will not apply in these three situations:

  • 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.

Citing the same policy document, BNM also said insurance and takaful providers are required to give due consideration to any financial hardships faced by an insurance policy owner or takaful participant and can apply their discretion to waive co-payments or not make the customer share the costs in such circumstances.

BNM said more consumers taking up medical and health insurance with co-payment features will help to control the medical cost inflation in Malaysia by controlling the over-consumption of health services, along with other healthcare reforms in the government's Health White Paper.

BNM said these requirements in the policy document are to promote affordability and safeguard consumer interests.

Malaysia in 2023 recorded medical cost inflation of 12.6 per cent, while the global average was 5.6 per cent.