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7 Responses to “A Short and Smart Guide to Health Insurance”

1. Yap Ming Hui on May 8th, 2010 at 9:04 am

   I agree with you, Alan. We must always have a hospitalisation & surgical insurance. Importantly, get it when you are young and healthy. Otherwise, not only the premium will be expensive, the insurance company may even exclude certain part of coverage if they knows that you are not healthy.

2. alan on May 25th, 2010 at 9:00 pm

   Prudential chairman confident in AIA deal

   HONG KONG: The chairman of Prudential PLC said Tuesday he’s confident the British insurer can secure shareholder approval for its planned $35.5 billion takeover of Asia-based AIA Group from bailed-out U.S. insurer AIG.

   Harvey McGrath spoke to reporters in Hong Kong, where Prudential shares debuted on the stock exchange along with a listing in Singapore.

   The two new listings aim to draw new investors for a $20.9 billion share issue that will help fund the AIA deal.

   Prudential also plans $5.4 billion in hybrid debt financing.

   “I think the vast majority are very comfortable with the transaction,” McGrath said.

   At midday in Hong Kong, Prudential shares were slightly down from their opening price of HK$59.70 at HK$58.90.

   In Singapore, they were also down from the opening price of 7.72 Singapore dollars at SG$7.54.

   Some investors and analysts think the $35.5 billion price tag for the takeover is too high, with opponents forming a Prudential Action Group that is trying to mount a vote of no confidence in Prudential Chief Executive Tidjane Thiam.

   The group argues that AIA operations will consume cash generated by Prudential’s British operations, while the proposed Asian acquisitions won’t produce significant cash flows.

   The Financial Times reported on its Web site that AIA chief executive Mark Wilson plans to quit if Prudential’s takeover suceeds.

   He believes the combination of Prudential and AIA’s businesses in Asia is unworkable, the report said quoting unnamed people close to Wilson.

   McGrath said he wouldn’t comment on speculation.

   “We are very excited by all of the very talented people we have gotten to know at AIA,” he said.

   Prudential needs approval from holders of 75 percent of its shares in a meeting on June 7.

   fr:biz.thestar.com.my/news/story.asp?file=/2010/5/25/business/20100525145427&sec=business

3. alan on July 24th, 2010 at 4:31 pm

   Abuse and fraud are insurers’ main challenges
   By DALJIT DHESI

   HIGH incidence of fradulent claims and the escalating medical costs are some of the pressing concerns facing insurers offering medical and health insurance (MHI). While healthcare is vital, industry players feel insurers need to be cautious in their MHI coverage to avoid losses from fraud.

   Life Insurance Association of Malaysia president Md Adnan Md Zain says even if healthcare cost increases due to inflation can be mitigated, abuse and fraud are the main challenges facing insurers.

   There is a need for them to be prudent and to manage their loss ratio effectively by being selective in providing coverage, he notes.

   Md Adnan says there is a tendency for doctors to charge higher for patients who have MHI. “Currently, most – if not all – insurers provide value-added services like issuing letters of guarantee to hospitals for eligible policyholders. This facility allows the insurers to settle the bill on behalf of the policyholders in accordance to the benefit level, if eligible.

   “This facility can be a subject of abuse and poses a great challenge to insurers. As a result, companies rather opt out and revert to the conventional method whereby the policyholder pays for the treatment first and then submits to the insurers for reimbursement, subject to the terms and conditions of the plan purchased,” he tells StarBizWeek.

   Concurring with Md Adnan on the need to be prudent, MAA Assurance assistant vice president of healthcare Chong Chee Yoong says health insurance, whether in Malaysia or in the US, is never a profitable line of business due to escalating costs of treatment and technical innovation, unless insurers underwrite the portfolio and manage claims prudently.

   Malaysian Medical Association president Dr David KL Quek, on the other hand, feels certain serious illnesses such as childhood leukaemia and congenital heart diseases, as well as pre-existing diseases such as diabetes and hypertension, should be covered by insurance like in other countries to ensure the unfortunate get help to pay for their treatment and care.

   Many are now left exposed to possible financial ruin because they cannot afford the actual costs of such treatment, he adds. He says Bank Negara should advise or mandate that health insurers provide cover for such ailments.

   Quek also points out that many insurers are not keen on providing insurance coverage to senior citizens, especially those above 70.

   Some health plans for the elderly, he says, are prohibitively expensive, although most healthcare costs occur during old age. This leaves many of the elderly uninsured and unable to get prompt treatment, if at all.

   Md Adnan says healthcare plans are constantly evolving and some insurers have developed products by providing more cost-effective options to consumers.

   One recent innovation is the introduction of no-claims bonus for MHI plans, in which consumers with good claims records will receive cash payments. For example, some insurers have increased or removed lifetime limits on claims, while others are considering including traditional medicine to the benefits covered, he adds.

   “Certain lines of critical illness products now allow consumers to make multiple claims, although for different illnesses each time, in response to an environment where better medical technology increases the likelihood of recovery from critical illnesses. With increased life expectancy, there is also a push towards longer-term MHI and medical and health takaful (MHT), with some products now covering policyholders up to age 100,” he explains.

   The importance of healthcare can be seen from Bank Negara’s Financial Stability and Payment Systems 2009 report, which showed that total MHI and MHT gross direct contributions recorded a 22.6% increase from RM900mil in 2008 to RM1.1bil in 2009. This is in tandem with the rising private expenditure in healthcare. which reached RM18.9bil in 2008.

   Prudential Assurance Malaysia Bhd CEO Charlie E. Oropeza says medical insurance will continue to contribute to a significant portion of its business.

   The demand for the company’s health-related products, he adds, has been very consistent throughout the years, with about 90% of its investment-linked insurance policies attached with at least one health/medical rider.

   Oropeza says one way to address and manage high claims ratio effectively is by working closely with healthcare providers and offering on-going education for consumers on medical claims, although this takes time.

   To help mitigate high medical claims, he adds, insurers can also play an active role in promoting healthy living.

   For example, the company’s PRUhealth product encourages healthy living while providing comprehensive medical coverage, he notes.

   The product rewards policyholders with an annual No Claims Bonus, which is earned when the customer does not make any medical claims on his policy in the year.

   CIMB Aviva Assurance Bhd CEO Kevin Jones says the consumer still lacks understanding when coming to MHI. “In many cases, consumers assume that by contributing a mere RM50/RM100 a month, their medical and health plan will cater to all expenses on all medical treatment/ailments.

   “The recent Product Transparency and Disclosure Guidelines issued by Bank Negara in April this year is a good move as it ensures that a consumer is given clear information about the product at the point of sale to enable him to determine if the product adequately meets his needs.”

   Chong of MAA Assurance says there is still room for improvement when it comes to charges by hospitals and specialists. The implementation of the Private Healthcare Facilities and Services Act 2006, he says, has in a way improved the negotiation on specialists’ charges but not on the hospital supplies and services, which form a major component of the overall hospital bill.

   fr:biz.thestar.com.my/news/story.asp?file=/2010/7/24/business/6710145&sec=business

4. alan on September 5th, 2010 at 8:12 am

   Many buying insurance up to age 100 due to high medical costs
   By LIM AI LEE

   PETALING JAYA: Rising medical costs have prompted more Malaysians to take up multiple health insurance policies, with some even extending their cover up to the age of 100.

   A check with several major insurance firms showed good demand from the working population on extending their medical cover until at least the age of 80.

   Industry experts attributed the growing demand to healthcare costs escalating at between 13% and 15% annually, longer life expectancy and more patients turning to private hospitals to avoid long queues at public hospitals.

   As most employers do not provide post-retirement medical coverage, more working people aged between 25 and 50 are taking up private medical insurance policies to avoid exhausting their savings should they be stricken with a major illness.

   Prudential Assurance Malaysia Bhd chief product and marketing officer Heng Zee Wang said someclients were buying more than one medical plan to ensure they had “sufficient cover all the way.”

   “Each medical plan comes with an annual claim limit. If a person is hospitalised and the bill exceeds the existing limit, the patient will have to pay the remaining amount from his own pocket if he or she does not have a second policy,” he told The Star.

   Heng said more insurance companies were now offering policies that covered a longer period as Malaysians were living longer due to improved living conditions and medical advancement.

   “The average life expectancy of a Malaysian male and female was only 55.8 years and 58.2 years respectively in 1957. Today, it is 71.9 years for men and 76.9 years for women.

   “By 2050, the average lifespan is expected to increase to 77 years for men and 82 years for women. This upward trend presents a need for insurance companies to provide medical plans that would cover the policyholders beyond the current life expectancy,” he said.

   Heng cited as an example, the firm’s PRUhealth policy which was sold as a rider to its investment-linked insurance plans and provided comprehensive coverage up to age 100.

   A 70-year-old client who buys the PRUhealth plan will pay about RM480 a month as premium (for cover expiring at age 80), or RM611 for cover expiring at the age 100 based on the lowest plan PRUhealth100.

   For those aged between 26 and 30, the premium for the plan with cover expiring at age 80 starts from RM94 a month.

   MAA Healthcare and Medical Insurance assistant vice-president (accident, health & group) Chong Chee Yoong said they had received “very good” response towards their guaranteed renewable medical policy until the age of 80.

   “Malaysians are finding private medical treatment to be more expensive,” he said, adding that medical policies now contributed 15% of the company’s new business.

   “By setting aside some reserve funds in the form of insurance premiums, policy holders when faced with a claim on critical illness, will not need to deplete their bank accounts, EPF savings or sell off assets to pay for medical treatment.

   “It’s good to buy when one is healthy and have a medical savings plan in case of a rainy day. When the insured retires, this is the age that the health condition will already have changed and treatment will be needed most,” he added.

   An insurance consultant with AIA concurred, saying it was important to take up an insurance policy when one was in good health. “This is because you may not be able to buy it when you need it most,” he said

   fr:thestar.com.my/news/story.asp?file=/2010/9/5/nation/6985011&sec=nation

5. alan on September 12th, 2010 at 5:48 pm

   Holes in medical coverage
   By JOSEPH LOH

   When buying medical insurance, make sure to study the terms and conditions properly to avoid being short-changed at the critical moment.

   WHEN R. Samy* found his wife unconscious on the bedroom floor, he feared the worst for her. Fortunately – or so he thought – she had a medical insurance policy so they did not have to worry about paying the hospital bills.

   He took her to a panel hospital under the insurance company and she was admitted. The following day, while still fretting over his wife’s well-being, Samy received a rude shock: her insurer had declined to issue a guarantee letter for her treatment. The reason – there were pre-existing conditions that she did not state when purchasing the policy.

   According to Samy, these ranged from her having a sinus problem and a heart condition. He says she does not suffer from such conditions and has doctors’ reports to prove it.

   Another reason stated was that she had a history of dysfunctional uterine bleeding. It was merely a consult done with the family doctor four years ago during her menopause, Samy maintains.

   He was asked to settle the hospital bill upon her discharge and would be reimbursed by the insurers later. He was unable to pay the bill, however, and it remains unsettled till now. He has received a lawyer’s letter from the hospital demanding payment.

   “When they sold the policy, they promised the moon and the sky and said everything would be taken care of. It was not cheap – about RM2,400 annually,” Samy says, adding that the terms and conditions were not clearly outlined to him before the policy was signed.

   “The policy is 30 to 40 pages long. With all its legal terms, it may as well be written in a foreign language. How do you expect a layman to understand it?”

   He feels aggrieved because the company has yet to clearly state the grounds for its denial to issue a guarantee letter. He also believes it is on a witch-hunt to find reasons to avoid paying the claim.

   “I have even gone to Bank Negara but nothing has come of it. I now have no choice but to take legal action against the company.”

   Samy’s tale is but one “horror story” involving medical insurance claims (see accompanying story for two more examples).

   His expectations are legitimate as he paid good money to ensure he would be covered in a medical emergency. But for reasons that he could not comprehend, that was denied.

   It is not far-fetched to say that all medical policy holders have a similar expectation.

   But Federation of Malaysian Consumers Associations (Fomca) secretary-general Muhammad Sha’ani Abdullah is sceptical about medical insurance’s effectiveness as a comprehensive solution for the healthcare needs of the people.

   “Insurance companies are commercial entities whose objective is to minimise exposure and maximise profits,” says Sha’ani, who is also the National Consumer Complaints Centre (NCCC) chief executive.

   He believes that in order to reduce risk, medical insurance caters to healthy people and avoids the “risky” population.

   He says he has heard many complaints from consumers who find out that cover is restricted, or will not be provided, when they are seeking treatment.

   “Fomca does not recommend it as a fool-proof measure. People assume that medical insurance will take care of any eventuality so they keep on paying. Then, when they need protection, they find it is not adequate.”

   Sha’ani believes policies are being sold without ensuring the customer fully understands the terms and conditions.

   Citing policies that do not require a prior medical check-up, he says: “Some don’t say that you must disclose existing health problems – they just fill up the form and take payment. Only when the claim is submitted will they investigate for pre-existing medical conditions. And this is after regularly paying premiums for a year.”

   The onus is on the company to ensure the customer does not buy a product without proper protection, he stresses.

   Malaysian Medical Association (MMA) president Dr David K. L. Quek acknowledges that disputes do happen in medical insurance claims.

   But, he says, it is important for the customer to know what he is buying and be aware that not everything will be covered.

   He gives the example where someone goes to a hospital because he feels unwell. Unknown to him, the condition is not life-threatening but he insists on getting a full medical check-up.

   “Health insurance is not a blank cheque for you to be checked from head to toe. All this costs extra money and it is not fair to you or the insurers,” he says.

   “The whole idea of insurance is to share out the risk. So you get treatment when you need it, not when you demand it.”

   He points out that generally you get what you pay for.

   “You cannot buy insurance for a few hundred ringgit and expect to get the best care.”

   When two commercial entities (private hospitals and insurance companies) come head to head, there are bound to be points of contention. Unfortunately, it is the patient who is caught in the middle. Problems can arise because insurance companies insist on discounts, which some private hospitals are not willing to give.

   Medical insurance is essentially a contract between the insured and the insurer with all the terms and conditions stated in black and white in the policy document. By signing the document, the customer agrees to the terms and conditions and is bound to them to the letter.

   “Customers must be wary when they buy medical insurance. They have to investigate and shop around. They should never assume it will cover everything and must check the coverage provided,” advises Sha’ani.

   Heng Zee Wang, Prudential Assurance Malaysia Bhd chief product and marketing officer, says customers should be aware that what they are purchasing will suit their needs.

   “What insurance to buy depends on your financial capability. Lower level plans come with lower coverage so look at what you want to cover and what you can afford,” he says.

   And as with any contract, both parties should be well aware of the terms and conditions they are agreeing to.

   Heng points out that insurance policies typically have a list of exclusions where the insured cannot make claims. Examples of these are injuries caused by natural disasters, riots, under the influence of illegal substances, and even radioactive contamination. Even some conditions, such as AIDS, and communicable diseases requiring quarantine, like SARS, are excluded.

   Apart from the exclusions, each insurance company will also have its own terms and conditions, and it is crucial that the customer clearly understands what they are.

   There are some typical ones that must be properly communicated to or understood by the customer. He may feel cheated if denied a claim because of these.

   These include disclosure of pre-existing conditions (where it is the customer’s responsibility to inform the insurer of any previous medical condition); co-insurance (where the customer pays a portion of the hospital bill); investigative admission (going for a medical check-up, which is not covered); as well as annual and lifetime limits (amount that can be claimed within one year, and over the entire course of the policy).

   Whose responsibility is it to ensure the nitty-gritty details of each policy are fully communicated to the customer?

   Heng says both parties bear a part of it. “We train our agents to explain as much as possible but it is also important for the customer himself to ensure he is aware of and fully understands the terms and conditions. There are many important points, and customers should be proactive and ask as many questions as necessary before signing.”

   Heng assures that his company goes through a rigid process of recruiting agents and have high training requirements.

   “From the company’s point of view, we do everything to ensure agents advise and sell policies properly to customers. If we find out that certain agents do not, we will take action.”

   Heng also advises policy holders to contact their insurers at the first possible instance before seeking treatment. This is to ensure that they are aware of the proper procedure and cover provided and avoid being saddled with costs that they have to bear themselves.

   Healthcare for all

   As it stands, Malaysians have two avenues to obtain potentially expensive medical treatment which they will not be able to afford on their own. The first is from public hospitals, and the second is with medical insurance.

   Sha’ani says public hospitals typically have a long waiting list and treatment may not reach the sick in time. As he believes that medical insurance is inadequate, then it is the Government which should come up with a solution.

   “Everybody has the right to proper healthcare. If insurance cannot give proper cover, then the state should provide it.

   “In the first place, healthcare should not be commercialised – it is the state’s responsibility,” he stresses.

   Referring to the proposed National Health Financing Scheme, which has been bandied about for some time but has not yet materialised, as a potential solution, he says: “We can follow the Socso model; everyone contributes and that scheme will protect everyone.”

   Dr Quek says recent reforms such as that introduced in the United States would be welcome, as well as schemes such as Medicare and Medicaid, which provide for the older generation and low-income groups respectively.

   “Right now, the Government spends about 2% of the nation’s GDP on healthcare, which is about RM13bil. If they can allocate more, to about RM30bil, then a lot more ground can be covered.”

   He says a healthcare model based on Socso or EPF can work, but everybody has to pay for it, including public servants.

   “The private sector should not have to bear all the costs. If public servants do not pay, then the Government should pay on their behalf,” says Dr Quek.

   *Real names withheld to protect identity

   fr:thestar.com.my/news/story.asp?file=/2010/9/12/nation/7018556&sec=nation

6. alan on September 12th, 2010 at 5:49 pm

   Horror tales when it comes to making claims

   PATRICIA Lam* was diagnosed with a tumour in her neck artery. Her treatment required a section of the artery to be removed and replaced with a prosthetic artery. Part of her medical expenses were covered by her company’s group insurance while the balance was to be covered by her personal medical insurance.

   However, she and her company had difficulty claiming on the insurance as they said the prosthetic was for “beautification purposes”.

   “That was totally ridiculous. Without the prosthetic, I would have died! It was so difficult to get the money for something clear-cut,” says Lam.

   It took over a year before the claims were paid, and only on the threat of taking the insurance company to court.

   Two years later, she had to undergo another surgery for cervical cancer. She tried to claim a lump sum payment on her critical illness cover but was initially rejected because the company said it was “pre-cancer”, which was not claimable. It took another six months before the claims came through.

   “Their practices are very questionable. They try to find all possible loopholes so they don’t have to pay. Even the agent who sold me the policy was surprised it was denied,” says Lam.

   R. Hari*, who holds a medical card, suffered acute pain in his arm and shoulder and was referred to a private hospital by a clinic. After a two-hour wait, his admission was approved and he was subsequently warded. Late in the night, however, he was told to leave the hospital as the insurer did not agree with the recommended treatment. To his embarrassment, he was unceremoniously ushered out of his room even though he was still in pain. He then went to a government hospital where he was admitted.

   The next morning, he received a call saying that his treatment had been approved. But the call came from the private hospital and not the insurers, who were well aware he had been “chased out” earlier.

   His condition did not improve, and he fainted and had to be warded at the intensive care unit of the government hospital for two days. He spent another six days in the regular ward before he was discharged.

   “I was surprised because when I studied the documents, I found that the cancellation of the approval was not signed by a doctor, but by someone else ‘on behalf of’,” he says.

   “I intend to take action against all parties involved and seek compensation for the hardship and suffering I had to go through.”

   *Real name withheld

   fr:/thestar.com.my/news/story.asp?file=/2010/9/12/nation/7022341&sec=nation

7. alan on September 13th, 2010 at 9:09 am

   Lee: Provide cover for the mentally ill

   PETALING JAYA: Insurance coverage should be provided for the mentally ill, while their parents should be given income tax relief, said National Institute of Occupational Safety and Health (Niosh) chairman Tan Sri Lee Lam Thye.

   Lee said that more benefits should be accorded to the mentally ill, including insurance coverage, which was now denied to them.

   He also called for the Government to provide income tax relief to parents or relatives, who have to take care of the mentally ill.

   Government hospitals should also provide better healthcare services for the mentally ill, and make available cheaper psychiatric drugs, he said.

   Lee said that mental health problems, especially those which were stress-related, were of serious concern and could result in sudden anger, violence, depression and suicide.

   “The neglect of mental health and psychosocial factors at the workplace is not only detrimental to the individual worker but also directly affects efficiency, effectiveness and output of any enterprise,” he said in a statement yesterday.

   He pointed out that key indicators of the mental health status of employees were work performance, frequent illness, absenteeism, accidents and staff turnover, and said employers should provide counselling to affected employees.

   “Mental health is not just about mental illness. It is a feeling of well-being, the ability to cope with life’s many challenges and to have a positive attitude towards oneself,” he said.

   fr:thestar.com.my/news/story.asp?file=/2010/9/13/nation/7025311&sec=nation