KUALA LUMPUR (Feb 26): Deputy Finance Minister Lim Hui Ying said on Wednesday a study found that private hospital treatment costs were higher for patients using guarantee letters, as compared to those opting for pay-and-claim.

However, Lim noted that treatment charges remain non-transparent, and further research is needed to understand the cost discrepancies and determine appropriate follow-up actions.

"The government is aware of this issue, including concerns raised by the public during the recent Public Accounts Committee (PAC) public hearing. Therefore, the Health Ministry, in collaboration with key stakeholders — including the Finance Ministry, private hospitals, and insurers and takaful operators (ITOs) — is working towards long-term solutions," she told the Dewan Rakyat during a question-and-answer session.

She was responding to Sim Tze Tzin (Pakatan Harapan-Bayan Baru), who inquired about the difference in private hospital charges between payments made via pay-and-claim and those using guarantee letters.

Lim said the long-term solutions under discussion involve comprehensive healthcare reforms to address medical cost inflation and private hospital charges. This includes improving pricing transparency for medications and comparing common medical costs.

"A comprehensive action plan was presented to the PAC yesterday (Tuesday)," she added.

Lim also revealed the top 10 most frequently claimed medical and health insurance (MHIT) treatments for hospitalisations in 2023, based on preliminary findings from the integrated claims database of the insurance and takaful industry.

Among the most common claims were for pneumonia, spine-related issues, digestive system disorders, heart disease, and joint and ligament injuries, including dislocations and sprains. Other frequently claimed treatments included those for acute appendicitis, viral infections and influenza, as well as respiratory system issues such as bronchitis and upper respiratory infections. Additionally, conditions related to the ear, nose, and throat, along with fever, were also among the most reported cases.

In response to a separate inquiry from Teresa Kok (PH-Seputeh), Lim said the government will study the feasibility of requiring ITOs to report detailed profits and losses for each medical insurance policy.

Currently, ITOs are only required to declare their overall profits and losses in their annual financial statements under Malaysian Financial Reporting Standard 17.

Lim said Bank Negara Malaysia had strengthened MHIT business standards, including a simplified product disclosure sheet (PDS) to help policyholders better understand the terms and make informed decisions.

The PDS will also disclose the industry claims ratio, which averaged 72% from 2021 to 2023, showing that most premiums go towards claims, she noted.

Lim added that ITOs must balance premium increases with policyholder affordability and product sustainability.

"ITOs may only reset premiums when actual claims costs decline consistently and exceed a predetermined threshold set in their internal policies. They are also prohibited from adjusting premiums solely for profit," she noted.

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