LETTER | The government must be lauded for wanting to introduce the B40 insurance scheme from Jan 1 despite various criticisms, difficulties and uncertainties about the viability of this scheme in the long-term.

Malaysians, especially the lower-income group and senior citizens have been longing for an insurance scheme for decades and the people need to support and thank the Pakatan Harapan government for persisting with the concept.

The scheme, officially known as the B40 Health Protection Fund, will be managed by Bank Negara and covers 36 critical illnesses. It will be better understood when the details are finally revealed as there are various questions and issues concerning it as to whether it will be sustainable in the future with the initial seed fund of two billion ringgit provided by Great Eastern Life Insurance.

Many other fully foreign-owned insurance firms are also expected to follow suit to benefit from the waiver. Sure enough, the government does not have the finances to start the scheme on its own presently due to the economic slowdown and debts and as such wants the private sector to take the lead.

The government must be credited for finding a novel way to initiate the fund by giving a regulatory waiver to Great Eastern Life Insurance in exchange for its contribution. With income disparities getting wider, longer life spans, prevalence of various illness and diseases, environmental pollution, unhealthy lifestyles, a health insurance scheme has become a necessity to relieve the burden of the poor as medical treatment has become a major expenditure for the people.

For the insurance scheme to be adequately funded, viable and sustainable in the long run, the government needs to contribute at least a billion ringgit every year especially to the insurance scheme apart from the usual budgetary allocation annually for health services.

Socso needs to contribute one billion ringgit annually and the EPF at least two billion ringgit per year as the B40 group accounts for the largest segment of their subscribers. It is time for both Socso and the EPF to do more than just the basics. The two billion ringgit is good enough for a start.

Even though one sees the B40 group crowding the government hospitals for medication and treatment, only a small percentage of them need specialist treatment, hospitalisation or surgery as the rest are seeking treatment for minor ailments. Most of the non-major treatment or surgery can be done for less than RM10,000, the tentative limit for the insurance.

Therefore, based on actuarial and insurance principles, the initial amount of two billion ringgit is a good start as the fund will snowball over the years. Administrative costs need to be minimal and the government should use the existing hospital staff or set up a special unit, drawing excess staff from other departments especially those who are hard-working and efficient.

This unit must be imbued with efficiency. Applications, referrals, payments and other tasks need to be processed fast if it is to win the confidence of the people. Presently, government hospitals are known for their delays, inefficiency and other drawbacks. Private healthcare sector involvement in the scheme must be minimal as in many countries both legal aid and public medical insurance schemes have been almost bankrupted due to the exorbitant fees and costs.

Possibly, the biggest advantage of this insurance scheme is that it can stop the brain drain from government hospitals to the private ones especially specialists, surgeons and other highly-qualified staff who opt for higher salaries. The government needs to use this opportunity to upgrade district hospitals and also add more private wings in the main hospitals in view of the greater demand anticipated under this insurance scheme.

The specialists can get a higher income from those treated under the insurance scheme. This will relieve the government of a major shortfall as it cannot pay its medical specialists salaries to match the private sector’s as it has to take the pension factor into consideration. Specialists and surgeons can be better retained by the government as they will be paid according to the number of patients treated or surgeries performed.

Since the specialists will also get the salary and retirement pension, few would want to leave the government service. When the number of people using private hospitals is reduced due to the B40 group opting for the insurance scheme, fees, too, will go down and there will be a lesser demand and competition for specialists thus relieving the government of a major headache.

The B40 insurance scheme provides a good chance for the government to rectify a long-felt need of the people and the scheme has much promise and will grow bigger like the EPF and Socso once the initial problems are resolved.

The government needs to be open to accept criticisms, inputs, feedback and suggestions from the stakeholders to improve this insurance scheme. The scheme also enables the Pakatan Harapan to fulfil one of its major promises to the electorate made during GE14.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.