KUALA LUMPUR, Dec 5
Two opposition lawmakers in Malaysia have urged the government to implement regulations for the private health insurance sector, including the establishment of a timeline for claims processing, to minimize delays and a ban on rejecting claims based on pre-existing health conditions.
Dr. Halima Ali, representing Kapal state, and Dr. Ahmad Yunus Hairi from Kuala Langat, both of whom are also medical professionals, emphasized the need for limits on how long insurers can “investigate” claims and when they can ask for older medical records.
Meanwhile, Sim Tse Tsing, the Bayan Baru MP from Pakatan Harapan, pointed out the importance of existing complaint mechanisms while cautioning against excessive government intervention in the insurance industry.
The magazine code blue reported on the case of Ram Krishnan Sinnamtri, a 57-year-old man suffering from stage 4 tongue cancer, whose claims to Allianz Life Insurance Malaysia Berhad had gone unpaid for over four months following a CT scan conducted last July. Allianz had paused all claims while it looked into a hypertensive incident from 2024, a matter that hadn’t been claimed previously. They requested medical records dating back to 2017, causing Lam to incur around RM69,000 in out-of-pocket expenses on treatment and diagnostics.
Dr. Halima, who is part of the Public Accounts Committee (PAC), stated that Lam’s situation illuminates persistent challenges in the insurance industry, including extensive delays related to historical medical conditions and cumbersome documentation requirements, even when patients urgently need assistance.
A lawmaker from Perikatan Nasional noted that such practices unfairly burden those who are seriously ill, referencing the low payout ratio of mySalam at 54% as a concerning operational issue.
mySalam is a government Takaful program aimed at providing financial support for serious illnesses or hospital stays, operated by Great Eastern Takaful Berhad (GETB).
“Insurance companies shouldn’t indefinitely delay claims by continuously demanding more documentation,” Dr. Halima argued. “Once necessary documents are submitted, insurers should be legally required to approve or deny claims within a specific timeframe.” She stressed the need for limits on the age of medical records requested, asserting that requiring documentation from years ago, particularly for unrelated conditions, is unreasonable. She added that any reforms must emphasize transparency, accountability, and a just appeal process.
As for the proposed Basic Medical Health Insurance/Takaful (MHIT) product, Dr. Halima urged that strong consumer protections should be established if private insurers are involved. These protections should include rules against claim delays, clear criteria for investigations, set limits on document requests, and automatic approvals for certain critical diagnoses. Additionally, penalties should apply to insurers who unduly hinder valid claims.
“Ultimately, the MHIT should not replicate the shortcomings observed in mySalam, where excessive documentation and low approval rates leave families in distress during vulnerable moments. The core idea is straightforward: insurance should safeguard individuals, not drain them,” she asserted.
During a parliamentary session on November 27, Dr. Halima raised similar concerns regarding the challenges faced by low-income individuals when filing health-related claims.
She questioned why mySalam, aimed at aiding the B40 group, held an approval rate of merely 54%, significantly lower than the private insurance average of around 90%. Since 2019, over 921,000 claims under mySalam have been rejected.
She also highlighted the contrast between the extensive documentation required for mySalam claims and the straightforward process of Skim Perbatan Madani (SPM), which only requires patients to present their MyKad. SPM is administered by ProtectHealth Corporation, a government entity, rather than private insurers.
In response, Deputy Finance Minister Lim Hui Yin stated that mySalam claims would be processed in line with GETB’s established procedures.
Kuala Langat MP: Addressing Pre-existing Conditions
Kuala Langat MP Dr. Ahmad Yunus Hairi called for an end to the practice where insurance companies refuse claims based on pre-existing conditions that are unrelated to the current diagnosis.
“Insurance providers must consider the health trends among Malaysians when defining conditions for their contracts,” he remarked.
He pointed out that as rates of non-communicable diseases (NCDs) rise annually, insurers shouldn’t deny coverage based on unrelated pre-existing issues.
According to the Malaysia National Cancer Registry Report 2017-2021, there has been an uptick in late-stage cancer diagnoses, with approximately 65% identified at stages 3 and 4. The 2023 National Health and Disease Survey found more than 2 million adults living with at least three NCDs, while around 500,000 have all four.
Dr. Ahmad Yunus insisted that reforms must ensure that medical interventions prescribed by doctors cannot be dismissed by insurers unless there’s clear justification showing they are unnecessary.
He emphasized the need for standardized operating guidelines for insurers and third-party administrators (TPAs), advocating for a predictable and transparent claims process.
Dr. Yunus argued against allowing financial motives to interfere with clinical decision-making. He stressed the importance of differentiating between clinical and funding decisions to safeguard patient health.
“Given the complexity of modern medicine, those responsible for managing insurance claims should possess a fundamental understanding of medical principles,” he stated, expressing concern that many claim decision-makers lack adequate medical training.
He suggested that Malaysia should create a specialized health insurance tribunal to handle disputes fairly and quickly, consisting of legal, medical, and insurance experts to navigate both medical and contractual complexities. His vision includes binding, enforceable decisions and the capacity for imposing penalties on insurers who unjustly delay or deny claims.
Dr. Yunus emphasized that the future MHIT product must accept all applicants regardless of their health, age, or pre-existing conditions. He highlighted the necessity for strict timelines and monitoring of premium adjustments to protect consumers, along with an independent panel to review claims denials.
Bayan Baru MP: Consumers Need to Know Their Rights
Sim Tse Tsing from Bayan Baru refrained from commenting on specific cases but acknowledged that many policyholders are often unaware of where to seek assistance with their health insurance claims.
He explained that there are formal complaint channels but many rely solely on insurance agents for guidance. “The governmental relief systems must function effectively—people must file claims with their insurers first, then escalate to Bank Negara if necessary, and finally to the Financial Markets Ombudsman Service if unsatisfied,” he elaborated, underscoring the importance of policyholder awareness.
While asked if there should be mandatory timelines for claims processing, Sim contended it wasn’t the government’s place to dictate these to insurers. “They need their own standard operating procedures. It’s not our role to micro-manage that,” he stated.
He highlighted that the government’s duty is to ensure relief mechanisms are operational, not to dictate internal processes of insurance companies. “You can’t regulate everything, but there are complaint processes available,” he added.
Sim remarked that it’s premature to evaluate the upcoming MHIT product since it’s still in development. “Let’s give them some time to work this out. Rushing could lead to larger problems.”
