The Truth About Medical Insurance in Malaysia
Why medical insurance makes sense
It’s a gloomy reality that we’re living in at the moment in the face of the steeply rising medical costs year after year, yet the affordability of average Malaysians to access such crucial services remains at worryingly unhealthy levels. Although in a way, we’re blessed to be living in this age where the advancement of medical technology has made it possible for many diseases that were considered deadly in the past, can now be managed or even eliminated. Sadly this comes with a huge socio-economic setback for Malaysia when all these modern medical miracles benefit its own people far less than they attract foreigners, creating a whole new niche called the medical tourism industry.
Many Malaysians are at the mercy of government subsidized medical services from government hospitals. As the population grows, the great burden lugged on the government’s back will only be much heavier fast forward. Even by subsidizing, many treatments for critical illnesses such as cancers or those requiring major surgeries will easily cost in the thousands of ringgit. The sadder part is the fact that according to The Star Online, a whopping 75% of Malaysian don’t even have RM1000 available as backup funds to soften the blow of any impending emergency.
Where there are difficulties, there are solutions if you know where to look. Medical Insurance has long established in Malaysia as the source of leverage for the high costs of medical treatments. For a couple of hundred ringgits a month, thousands are being pulled away from their despair and thousands of lives are saved when even the most sophisticated medical care is made accessible for common people. A few hundred ringgits lesser in their wallet every month might still be quite tough to bear for some but once the urgent need comes, nobody would even argue how their medical insurance policy had helped steer their lives away from certain devastation.
Don’t hate the players, hate the game
In the medical insurance business, relentless competition is hitting hard on all the players. Among the top insurance companies who are in this game are giants like Takaful Malaysia, AXA, Maybank Etiqa, Manulife, AIA, Great Eastern, Zurich, Pacific Insurance, Allianz, MSIG, Tokio Marine, and a few others. To win, they have to outdo each other by being creative in how they price their products. Lower price is always more desirable but that strategy is in direct conflict with the ever increasing medical cost clasping at their coffers and squeezing their profit tighter and tighter every year.
At the same time, it helps that the cake is also growing larger for all these companies to get their slice at. Demand is still far from saturated in this country and that’s what keeping them at it fighting with all their might. To keep prices low, the only way is to tinker around with their product positioning. This is an instance when the competition can actually go against the consumers. No one can be absolutely certain of what they are getting when the consumer purchased a medical insurance plan. The menu of a medical insurance plan is too complex for a layperson to grasp. They all look almost similar even when many details of the ingredients have been taken out, replaced, or scaled down to fit the undercut price.
From here, the agents take the role to emphasize the benefits and keeping the not so pretty details out of sight and out of the prospect’s mind. The presence of an insurance agent itself already requires some portion to be put aside for their services as part of the cost calculation. I’m not at all saying that all insurance agents step out onto the street with nothing but malicious intent. But the reality of the market is so tough that the consumers just have to be properly equipped with the knowledge about the products beforehand. For this reason, many Malaysian websites chipped in to offer medical insurance plans comparison without attachment to any company. Useful pieces of information can be found on sites like imoney.my, ringgitplus, howtofinancemoney.com, ibanding.com and a few others listed on the first page of google search results.
Challenges for the medical insurance industry in Malaysia
As we have covered in the previous paragraphs, the increase in medical cost is enveloping the country like a plague. Part of it is because the advancement of medical technology, which is good. But the other part that is in the grey is the rampant privatization that sees the public getting upset over the establishments putting money before their health. But insurers are paying to the insurance companies, not the private hospitals who actually the ones increased the charges. Most of the brunt falls on the insurance providers first yet these companies are also the first to be vilified when rates are increased.
There will be some bad apples inside a big enough basket. To curb this, there are regulations in place and they’re kept getting revised in a timely manner. While this is good to protect the market from selfish companies using loopholes to gain unfair advantages, every other player is also feeling the pinch from the stricter regulations binding their legs and limiting their ability to roam across the field.
Fraud claims are not unusual in this business. Some look at it as a way to make a quick fortune from insurance money if they are able to pull the fraud off. Another problematic issue is insurance abuse, which is categorized when a patient who is not deserving for treatment is claiming for it by means of false documentation. This is seen as a less serious issue compared to blatant frauds yet it is more frequent and the impact is still quite significant to the industry as a whole.
Carrying a health insurance policy is still regarded as a luxury for many Malaysians. Among the B40 citizens, their main concern is making ends meet on a monthly basis. Basic necessities such as food, clothing, and daily travel to work take greater priority than health which they usually don’t see the need coming anytime soon. And there’s always the government healthcare system to rely on even if it meant having to sit for hours on waiting bench just to get an appointment date. Insurance companies are not seeing a high take-up rate among these groups and it forces them to cut the price further to make it look a bit more enticing.
Risk of critical illnesses
The modern world introduces a modern lifestyle that consists of the raised intake of processed food with fewer nutrients and usually loaded with sugar, grease, preservatives, and chemicals. This combined with the high stressed city life, low movement inducing activities involving TVs, computers, and smartphones, people in this era are at a higher risk of cardiovascular diseases, diabetes, and cancers. It used to be those between 30 – 40 years old are in the prime of their life but today, even this group is threatened with diseases that may carry an early death sentence.
What’s the alternative to medical insurance?
We at Life Engineering realized all these drawbacks and how the system has failed many, especially in the lower income group. A deep structural reformation of the industry is practically impossible given how long it has been established. Thus we turned the wheel, circle around and created a new concept of medical cost crowd sharing. It is the first of its kind in Malaysia and slowly gaining popularity for its noble way of tackling the problem.
Relying on the side of humanity with built-in philanthropy and altruism, we encourage the act of helping the ones in need with very little monetary commitment. Life Engineering is the perfect alternative to medical insurance since we do not require any payment from participants when there’s no medical cost incurred to anybody on-board as a sharer. Even when there’s the need, the cost is dissolved among all Life Engineering sharers and the more sharers are involved, the lesser an individual has to bear. That’s how we are able to cap the maximum monthly contribution at RM50 only, with an average contribution per month for the previous 2 years was at a miniscule RM3. Learn more about our program here and here, or visit our Facebook pages for English and Malay to keep track of our activities.