Loopholes in mySalam health insurance: Is the public being short-changed?

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A long queue waiting at the crowded Penang General Hospital

The scheme should be put on hold until a proper actuarial study is done to find out how much the insurance firm will actually pay out, given all those exclusionary clauses, writes Jeyakumar Devaraj.

We are concerned about the many loopholes in the MySalam scheme that is being launched today.

For example, according to the MySalam website, severe parkinsonism with permanent inability to perform activities of daily living (item 30) is one of the 36 critical conditions for which the afflicted person can apply for the RM8,000 payout.

But the fact is, Parkinson’s disease generally affects people over 70. But MySalam only covers people aged between 18 and 55. So the vast majority of Parkinson’s patients are excluded because of their age.

Even if there is someone below 55 who has Parkinson’s with severe disability, the patient would not be able to apply for he or she would have been diagnosed several years ago (Parkinson’s takes 10-25 years to result in severe disability). And MySalam excludes conditions that were diagnosed before 1 January 2019. Thus it is extremely unlikely that any person who develops parkinsonism over the next five years will be able to benefit from the MySalam scheme because he or she would not meet the severity criteria.

Cancer and heart attack are mentioned (items 7 and 18 respectively) among the critical illnesses covered by the MySalam insurance. But the website states that these conditions must be “of a specified severity”.

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So it is quite possible to be below 55, suffer a heart attack between 1 January 2019 and 31 December 2019 but still not be eligible for any MySalam cover as the heart attack was not “severe” enough. What are the criteria used to judge severity? Were these set by Great Eastern? Did the government have an input regarding these criteria? Was the Ministry of Health consulted on this?

Bacterial meningitis (item 3), encephalitis (item 13) and head trauma (item 24) are among the 36 critical illnesses mentioned in the MySalam website. But the website specifies that the person afflicted should be “permanently unable to perform Activities of Daily Living”.

How will “permanency” of the condition be assessed? Would the family of a person in coma because of a head injury sustained in January 2019 be told to come back at least six months from the date of head injury if he is still severely disabled? Then the purpose of giving a cash handout at the time the family is in most need of it is thwarted. What happens to a person who sustains a head injury in November 2019? Will the claim on his behalf in May 2020 be rejected because it occurred prior to 1 January 2020 (because it is a pre-existing condition)?

“Activities of daily living” include feeding oneself, walking about at home, bathing and dressing oneself. A person with severe brain damage due to meningitis, encephalitis or head trauma might be able to perform some of these activities, but be totally unable to go out and rejoin the job market. According to the website criteria, such a person will be ineligible for the MySalam payment of RM8,000!

Did the Ministry of Finance go through the fine print of the MySalam plan to check the various exclusionary clauses for each of the 36 conditions listed? Did the ministry commission an actuarial study based on these exclusionary clauses and the known incidence of these 36 conditions in the 18–55 age range of the population to assess how much Great Eastern will pay out in a given year?

The government is in effect incurring RM400m to buy one year of MySalam cover for the bottom 40% of households.

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But if, because of all the exclusionary clauses, Great Eastern only has to pay out RM100m each year, isn’t this a rip-off of the Malaysian public? Wouldn’t the bottom 40% of households get much more assistance if the RM2bn from Great Eastern was directly used to pay for the plates, screws, lenses, stents and other equipment and appliances that patients in government hospitals are now required to buy?

And if the RM2bn was parked in a designated fund under the government, the interest earned over the next few years would be quite substantial and could also be channelled to help the bottom 40%. As it stands now, the RM2bn from Great Eastern is in effect in the form of a IOU note that the government will draw upon to buy MySalam insurance for the next four years.

The Pakatan Harapan cabinet should pause the MySalam scheme. Postpone its implementation for now. That is possible now as no payments have been made so far.

This will give the government the time to do a proper actuarial study as to the actual amount of payments that the bottom 40% will receive from this scheme – and please do not ask Great Eastern to do this actuarial assessment!

And please involve the Ministry of Health as well as the civil society groups interested in healthcare delivery such as the Malaysian Medical Association, the Citizens Health Initiative and the Galen Centre in the process to ensure that the RM2bn from Great Eastern is used optimally to benefit the bottom 40%.

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