Instead, they said, a national health insurance (NHI) scheme managed by the government would be more beneficial and viable.
Malaysian Health Economics Association president Dr Syed Aljunid Syed Junid and academic Dr Tharani Loganathan of Universiti Malaya agree that most Malaysians do not earn enough to afford the high contribution required under Singapore’s MediShield Life scheme.
In Singapore, 20% of the worker’s salary goes to his Central Provident Fund (CPF) savings, the republic’s pension fund, while the employer tops up with the equivalent of 17% of the employee’s salary.
A portion of the CPF savings is then channelled to the individual’s MediSave account. Depending on the person’s age, the quantum that is transferred to MediSave ranges from 21% to 84%.
The premium for the MediShield Life health insurance, ranging from S$147.71 to S$2,093.41 per year, is paid from the employee’s MediSave account.
Funds from the MediSave account can also be used to pay for inpatient and outpatient care as well as long-term care.
Syed Aljunid and Tharani’s comments came in response to a proposal by senator C Sivaraj that a scheme similar to Singapore’s MediShield Life be introduced in Malaysia.
An earlier report that insurance providers may raise premiums by up to 70% for health coverage has sparked off a debate on how to manage the rising cost of private healthcare.
Syed Aljunid pointed out that MediShield Life is only suitable for those with high incomes, given that the individual is also required to top up his own MediSave account if it is depleted.
On the other hand, he said, an NHI scheme managed by Putrajaya would ensure that basic insurance coverage is extended to the entire population while mandatory contribution to the Employees Provident Fund (EPF) is consolidated.
Syed Aljunid said the government could set up an NHI fund or non-profit agency to process insurance claims.
“Workers can contribute 1% to 2% of their wages to the NHI fund while employers top up with another 3% to 4%,” he told FMT.
He said those who work in the informal sector could pay a low premium to benefit from the NHI scheme.
The monthly EPF contribution for Malaysian workers is fixed at 11% while the employer tops up with another 12% or 13%.
Syed Aljunid said Singapore’s MediShield Life scheme also comes with pricey deductibles and co-payments, making it unfeasible for Malaysia.
Under MediShield Life, the insured person has to cover 10% of his hospital bill, plus another S$1,500 to S$2,000 depending on the class he is warded in.
The insurance coverage only kicks in after these payments have been accounted for.
Syed Aljunid said most Malaysians will not be able to afford this to activate their MediShield payouts when they require the services.
Tharani said many Malaysians earn “far less” than their Singapore counterparts, making it very challenging for them to make such payments.
“Not all of our citizens have sufficient EPF savings as it is, and our monthly contributions are also actually very low.
“Singapore’s emphasis on government subsidies for the needy and stringent cost control in healthcare provide valuable lessons for Malaysia’s health financing system,” she added.
Health policy analyst Dr Chan Chee Khoon, who is not in favour of an NHI scheme, said strengthening the nation’s tax-based financing, and spending more on public healthcare, is the way to go.
“An NHI is less cost-effective. Collecting contributions, tracking beneficiaries and managing claims reimbursement will incur additional costs,” he said.
Instead, he said, the government should create a national health fund as a repository for revenue from budgetary allocations for health and other revenue streams.
Chan said taxes should be raised for high income earners and corporations to fund an expanded public healthcare sector for the benefit of the middle and lower income groups.
“If the health ministry can provide timely, appropriate, no-frills and quality care on the basis of need to all eligible care-seekers (funded mainly by progressive taxation), why would the average Malaysian citizen need to pay high insurance premiums to afford pricey private hospitals?” he asked.