Health insurance premiums are to increase this year! What’s going on and why? This is Part 3 of 3 in our series about Rising Health Insurance Premiums. 

In the first and second parts of the series, we highlighted how insurance and healthcare providers are experiencing slowing profits and higher medical costs, leading to higher healthcare insurance premiums.

With both those pieces of the puzzle in place, it’s time to take a look at the last one – us, the regular Malaysians who need both insurance and healthcare. What is the story from our point of view and how are we contributing to the rise in premiums?

Why Would Malaysians Need Healthcare and Insurance?

Mak Cik Siti is 60 years old and retired. Like most of her peers, she has been working non-stop for the past 40 years of her life and was finally able to breathe a sigh of relief after the last of her children graduated. But she has problems now – big ones. She has been taking hypertension and cholesterol medications since she was 40 years old. A recent trip to her doctor showed that she is now at high risk of having heart problems and worse, she does not have medical insurance. This could be due to many reasons, a very likely one being because she was relying on her company’s group insurance coverage before she retired and did not have her own personal medical insurance. After all, she did not experience any major health crisis before so there was not any urgency to consider getting medical insurance coverage.

Mak Cik Siti’s story is becoming more common for most Malaysians regardless of age. Many a time, we take our health for granted. Or else, we take our employer-provided group insurance for granted. However, the unexpected can occur at any age, and the expected can also occur as we age for we can be rather certain that we “collect” more ailments as we grow older.

If the ailment requires time-sensitive treatment or specialized treatment, it may be necessary to look toward private healthcare. However, private healthcare is expensive. Most Malaysians can’t afford to pay the full medical cost upfront and need medical insurance to assist us in covering costs.

Malaysians Need and Demand for More Healthcare Have Increased

Malaysians’ needs and demand for healthcare are tied to three key factors. Firstly, Malaysians are living longer. According to data from the Department of Statistics Malaysia (DOSM), the life expectancy of Malaysians has increased from 71 years old in 1991 to 75 years old in 2024. The longer we live, the more we need healthcare.

Secondly, Malaysians are increasingly exposed to the risks of non-communicable diseases (NCDs) which are diabetes, hypertension, high cholesterol and obesity. According to the National Health and Morbidity Survey (NHMS), almost 2.3 million Malaysians have 3 forms of NCDs. Furthermore, we are getting fatter. The overweight and obesity rate had increased from 44.5% in 2011 to 54.4% in 2023.

Thirdly, Malaysians are demanding more advanced medical technologies and treatments. According to Pantai, the four types of NCDs are responsible for 71%  of deaths worldwide. This fear has indirectly led to higher demand for higher-quality healthcare services including early diagnosis.

Malaysians are Becoming More Unhealthy

This issue is complex. It involves a multitude of factors that are both within and not within our control. Let’s look at the obesity problem as an example.

According to family medicine specialist Assoc Prof Dr Verna Lee Kar Mun, Malaysians’ food choices and lifestyle are key here. Firstly, there are too many food choices that have increased the rate at which people eat out. Most of these meals now involve unhealthy eating habits that have highly refined carbohydrates, salt, and fat and are mostly ultra-processed.

Secondly, sedentary lifestyles mean that Malaysians exercise less. As people work more in offices in the cities, they are stuck in their office chairs and car seats during traffic jams. Many cities and towns are not designed to facilitate walking or recreational activities. People spend very little time exercising.

While it’s easy to blame these things, the issue runs much deeper. Eating more unhealthy food and exercising less is a symptom of the troubles of modern life. The key issue here is time. Malaysia is plagued by a reputation of poor work-life balance.

Malaysians eat out more because they spend more time working. It’s the same with exercise. Finding and holding down a job is tough in this economy. And with the cost of living increasing every year, it becomes more important for Malaysians to work harder to support themselves and family.

So, many have instead opted to focus on the short-term goal of financial survival. Health problems will come but it’s better than starving now.

And that’s only looking at obesity. There are many other health concerns we Malaysians are troubled with.

With Higher Demand, Come Higher Responsibilities, and… Higher Prices

When there is a demand, there is a supply according to economists. However, if supply cannot keep up, prices will increase as people compete for them and are willing to pay higher prices.

In Malaysia, such a thing is happening. On the government side, good healthcare is very affordable so they are overcrowded. In recent years, it has been dealing with a shortage of doctors and nurses, which meant longer waiting times.

In Budget 2025, the government has increased the budget for healthcare by 10% to RM45.3 billion – the second-highest allocation after education – to deal with higher medical costs and waiting times. Even then, it still faces overcrowding and has increasingly outsourced patients for services such as cardiology, radiology, and nephrology to private healthcare facilities.

So, many Malaysians have instead opted to go for private healthcare. If you have been following the series, you would know that many end up relying on insurance coverage to pay for private healthcare bills.  The higher demand for private healthcare has led to price increases for healthcare and for insurance.

Malaysians are stuck between a rock and a hard place.

Conclusion

In this three-part series, we have covered the perspectives of different parties playing a role in the rising premium costs of medical insurance.

In the first part, we talked about why insurance providers are slowly losing profits on the path to not being profitable because of high medical payouts. In the second part, healthcare companies themselves face higher costs in their businesses which led them to increase prices. In the final part here, Malaysians are needing and demanding more healthcare services.

By understanding the basis of how all three contribute to pushing premiums up, we can better discuss ideas and consequences to better deal with this concern.

 

Is there any one party that is more to be blamed than others? What can the government do? What should Malaysians do? Let us know what your think. 

 

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