Most searches and enquiries for insurance cover by millennials are related to “cashless” medical/hospitalisation card – this is the finding of PolicyStreet’s analytical survey. That preference is understandable in view of conscious concerns on continual rising treatment costs charged by hospitals, especially the private ones. They know they may not be able to foot the hospitalisation expenses on their own first before filing reimbursement from insurers later, hence the cashless arrangement (no need for out-of-the-pocket deposit and final settlement upon admission and discharge respectively) is needed.
They also know that serious illnesses emanating from lifestyle trends are also becoming rampant – like high blood pressure, high cholesterol, diabetes, kidney diseases, heart ailments, cancers, etc. So, to the millennials, priority for insurance cover is to accommodate the higher probability of morbidity (illness) compared to mortality (death). After all, the probability of dying at their age is lower than the probability of sustaining an illness, so they perceive. Thus, owning a cashless medical card in Malaysia ought to take precedence over owning a life policy. On this perception, I shall not contend if that is the preference.
Incidents Involving Medical Card in Malaysia In The Past
Having worked with the insurance industry for many years, I was aware of some disputes between policyholders and insurers mainly because the former party misinterpreted the cover extent facilitated by cashless cards issued by the latter. To those policyholders, the cashless entitlement covered all costs incurred by an episode of hospital treatment. The controversies occurred either because the policyholders had not taken due diligence to check all the parameters of cover in a medical plan with medical card, or they did not bother to scrutinise the terms and conditions contained in their respective policy contract subsequent to purchase.
It is important to know what your medical card can do!
It is imperative that intended purchasers understand the inherent mechanisms of a cashless medical card in Malaysia relating to service parameters accorded to a policyholder. Without this comprehension, they will not understand the rationale behind “what can do” and “what can’t do”. The best format to elaborate on the key elements entailed in a card is by way of Question & Answer (Q&A) approach below.
Frequently asked questions about cashless medical card in Malaysia
Is a cashless medical card in Malaysia usable for all hospitals in Malaysia?
The card is only accepted by private hospitals in the panel of the insurer which issued it when a policyholder wishes to be admitted for treatment without paying the bills first from his/her own pocket. The policyholder should first check which hospitals are in the panel prior to seeking treatment, also whether his/her hospital of choice, if any, is in the panel too.
What if a policyholder prefers to be treated by a hospital of his/her choice although it is not in the panel of the insurer?
He/she will have to settle the charges in full first. The original bills/receipts/issued by the non-panel hospital together with the medical report can then be submitted to the insurer for reimbursement. He/she is also required to fill up a claim declaration form.
Does a policyholder have the choice to select any physician attached to the panel hospital he/she is seeking for treatment?
Note that not necessary all physicians in an appointed panel hospital participate in the cashless arrangement. Policyholders who seek treatment with non-panel physicians will have to settle the charges first and thereafter file to the insurer concerned for reimbursement. It is pertinent to check whether a preferred physician is in the panel list before seeking treatment with him.
What does a policyholder need to do at the time of admitting into a panel hospital?
Present the medical card together with the identity card to the admission officer. If a referral letter is available, also present to the admission officer. The policyholder may be required by the hospital to sign a form upon admission and upon discharge may sign a statement with the hospital.
How does a panel hospital identify the validity of a card – e.g. whether the policy linked to it is still in force or terminated? What is the communication procedure for the hospital to adhere in event of any need for clarification?
Following is the arrangement instituted by an insurer regarding the handling process:
- An outsourced third-party administrator (TPA) serves as the intermediate party, in representing the insurer, for liaison with the panel hospital where a policyholder/insured is to be treated.
- The TPA is run by manpower trained in claims handling. Some TPAs employ personnel with experience in medical practice/knowledge, or with credentials in related fields.
- The TPA can access to the details of the medical insurance cover on the policyholder via updated report and system connectivity with the insurer. Once verified, the TPA will issue the letter of guarantee (LG) to the hospital.
- Communication from the hospital, if the need for advice and clarification arises, will be with the TPA directly. If there is any need for deliberation, the TPA will then refer to the insurer. Otherwise, most admissions should be effected quickly without inconveniencing policyholders.
- Normally, the appointed TPA provides 24 X 7 round-the-clock service to facilitate admissions at any time. Policyholders may check on this aspect before they take up a medical insurance plan.
Which party is the point of contact for a policyholder who wishes to make enquiries pertaining to the hospital admission and medical card in Malaysia?
The appointed TPA. Call its hotline number.
Do all insurers promoting medical/hospitalisation products and cashless medical card in Malaysia have TPA alliance?
A couple of insurers may not use TPA services. In lieu, they may appoint their own inhouse hospital services unit for direct liaison with panel hospitals. Policyholders may contact the hotline of the inhouse unit in case of need. Otherwise, the usual course of liaison is between the panel hospital and this unit in matters relating to admission of a policyholder.
What is the definition of in-hospitalisation? Must a policyholder be admitted overnight into a hospital ward for his treatment to be covered by the medical card and policy?
With the advent of modern technology, some surgical procedures no longer require overnight stay for recuperation. For example, eye cataract removal can now be painless and over within one hour, inclusive of short rest. Most medical insurance policy contracts cover day care surgical costs for such conditions that do not require in-hospitalisation. If this is provided for, the cashless facility can be used.
There may be policyholders who prefer to be treated at reputable Malaysian government hospitals or by reputable government medical specialists. But as the medical card in Malaysia is only applicable to panel hospitals which are private institutions, in a way cost savings go to insurers since charges levied by government hospitals are much cheaper. Would it not be fair for insurers to grant some additional benefits to those who are hospitalised in government hospitals?
Besides the policyholder being able to claim for reimbursement for any charge incurred, albeit much lower than charges of a private hospital, most medical/hospitalisation contracts offer a daily cash allowance for each overnight stay in hospital. The daily quantum depends on the medical plan purchased.
Are there limitations in terms of cover spectrum accorded by medical/hospitalisation products?
Most insurers include the following caveats in their policy contracts:
- No LG will be issued for hospitalisation using the cashless medical card if it occurs within the first 3 months from policy contract inception. The policyholder will have to settle the expenses first and then submit the bills and documents to the insurer for consideration of reimbursement.
- The first 30 days relating to any medical or physical condition will not be covered. However, if it is required due to serious accidental injuries, that will be accommodated.
- Treatment or surgery for certain specified medical conditions that occurred within the first 120 days from policy contract inception will not be covered. Examples of specified medical conditions are diabetes, cardiovascular diseases, all tumours, hernia, spinal disorders etc.
- Pre-existing illnesses (before policy inception) and congenital impairments and diseases are not covered.
- Self-inflicted injuries, war and warlike operations, activities that violate laws etc. are not covered.
- Pregnancy and miscarriage are not covered unless specially accommodated in the policy contract.
- Elective surgery like circumcision, cosmetic procedures, dental surgery (except due to accidental injury) etc. are not covered.
- Any treatment or investigation deemed not necessary, rest care, convalescence etc, are not covered.
- Regarding file and claim later (treatment at non-panel hospital and during the first 3 months) cases, claims for eligible expenses will be reimbursed according to the definition of customary and reasonable charges. For example, if a policyholder chooses to go for appendicitis surgery in Singapore at the cost of S$10,000, and if the customary and reasonable charge for this procedure is RM10,000, the insurer will reimburse up to RM10,000 only regardless of the amount charged by the Singapore hospital.
- Note the overall annual limit (maximum claims amount covered per year) and overall lifetime limit (maximum claims amount covered for the entire policy tenure). The limits vary according to the plan categories purchased. Some insurers may waive the overall lifetime limit for their new medical/hospitalisation products.
- Some products may impose a deductible element. This means the holder of such a contract will have to bear a specified minimal amount from his own pocket. The TPA will indicate so in its LG (based on the upfront quoted charge) to the hospital concerned and the policyholder will be notified.
What are the other aspects for checking out before deciding which insurer to sign up for a medical product?
- Check out how many times premium rates were increased by the insurer in the past.
- Check out the average turnaround time for issuance of LG by the appointed TPA or insurer (if no TPA is involved).
- Check out whether the appointed TPA is an established entity and its prevailing service quality.
- Check out whether the product is guaranteed renewable. If guaranteed renewable, whether also guaranteed to renew at the same premium, or the insurer has the right to revise premium rate. In this respect, it depends on the stipulations in the policy contract. For example, one insurer may guarantee renewal but subject to re-pricing while another may guarantee the same premium but without guaranteeing cover will be renewed.
Did you know this fact about medical card?
All medical card in Malaysia and its policy contracts carry the 15-day Free Look Period clause. The clause stipulates a policyholder has the right to cancel his/her policy by giving written notice within 15 days upon receipt of the contract, and refund of premium (minus any expense for a medical examination if incurred) will be granted. In other words, every policyholder is entitled to return his/her policy and insists for a refund within 15 days if he/she finds any of the terms and conditions unfavourable.
I encourage all new holders of medical/hospitalisation policies to digest the terms and conditions upon receiving their policy contract so that they fully comprehend the extent of benefits catered by the product.
The elaborations contained in the Q & A portion above are generic contents. Different insurers may have made modifications to cater for specific markets. I shall leave to readers of this article to check out which plans in the market would be palatable to them. A starting point could be AXA’s eMedic, Malaysia’s first ever online cashless medical card, which is now available on PolicyStreet. Most important is the benefits commensurate with the premium rates you can afford.
Written by Jimmy ST Fok
(Freelance consultant and author)