LETTER | We read with alarm the report that discussions between a foreign insurance company, Bank Negara Malaysia and the Ministry of Finance (MOF) are at a final stage to introduce a medical insurance scheme to cover the B40 group for up to 10 years.
The foreign insurer’s contribution of RM2.3 to RM2.5 billion with an additional RM500 - 600 million for scholarships is in exchange for an exemption from having to sell a 30% stake to local investors as required by Bank Negara.
Swap deals such as these should be viewed with extreme caution because the value of one part of the swap cannot be assessed independently of the other, and the people’s long-term interests are invariably swapped for a very short term, often politically-popular, interests.
First of all, the proposed medical insurance scheme, purportedly for an estimated five million people in the B40 group with each getting coverage of RM10,000 a year for up to 10 years, will expand the demand in private hospitals, pulling even more specialists and health expertise away from the public sector.
Already, our health care system is being unbalanced with more and more specialists leaving the public sector for the private sector, to the detriment of patients who have to depend on our government hospitals.
These patients include households above the B40 who will not benefit from this medical insurance scheme but would still be unable to afford private hospitals; as well as those living in rural areas where there are no private hospitals.
Furthermore, the insurance scheme for the B40 families is supposed to entitle them to outpatient treatment of RM20,000 and hospitalisation costs of RM80,000 per annum at private hospitals. What will happen to cases that exceed these limits? They will have to revert to our under-resourced public hospitals then.
Medical insurance premiums have in-built mechanisms to spiral. When costs rise, premiums will rise, there will be more and more medical treatments that will be excluded from the benefits, and people will have to buy co-insurance or to top up their medical benefits with out-of-pocket payments. Furthermore, the foreign insurer’s contribution will only be for 10 years. What will happen after that?
The proposed medical insurance scheme swap deal appears attractive because the way that it is framed is that this large sum of money offered by the foreign insurer will “provide medical coverage for the poor without burdening the government’s financial and hospital resources”.
Nothing can be further from the truth, because this large sum of money is will lure our people into a dependence on private hospitals, leaving our public hospitals to further weaken from medical expertise leaving for the ever-expanding private hospitals.
The recent report in a financial weekly of how “Shareholders of foreign insurers have benefited enormously […]”, and that repatriation in the form of dividends, management fees and outsourcing arrangements to foreign shareholders and foreign affiliates are in the billions of ringgit should tell us something about what foreign insurance companies hope to gain in the long term from this short-term contribution to a B40 medical insurance scheme.
Medical insurance is not a sustainable nor a viable solution to current challenges in our health care system. The proposed medical insurance scheme for the B40 will lead our health care system down an unsustainable and fragmented path.
As such, we call on the government to refrain from short-term piecemeal strategies that will lead to increasing fragmentation of Malaysia’s healthcare system and work towards a strategic long-term plan that considers the inter-linkages and functioning of the health care system more comprehensively and holistically.
We call on Prime Minister Dr Mahathir Mohamad to:
- Stop the swap deal with the foreign insurer to set up a medical insurance scheme for the B40.
- Make transparent all plans to reform the health sector, and use the consultative approach promised by the Pakatan Harapan government by engaging in discussions with the public and civil society on this important issue.
- Increase the federal budget for health from 2.1% to at least 4% of the GDP, and stop all leakages in the health budget from corruption, abuse and misuse of the system.
- Strengthen our public health care system by seriously looking into the retention of healthcare workers including specialists in public service.
- Work towards a holistic and comprehensive health care system that can provide universal health care coverage sustainably and for the long term.
Citizens Health Initiative (CHI) seeks to promote greater community involvement in healthcare reform and policy.
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.