Cancer & High Drug Prices

Of Cancer & High Drug Prices - The Star (Monday March 3, 2014 MYT 12:00:00 AM)

"This brings us back to the high price of cancer medicines, and the TPP negotiations. There are in­­­­­­­­­creasing complaints that many new cancer drugs are much too expensive, usually more than US$100,000 (RM327,750) for a course of treatment for a patient."

Full Story from The Star << HERE >>

How to choose health insurance or medical card?

Insurance always comes at a costs and there is no best insurance so to speak. Most importantly, buy by your own budget and not the agent's budget as insurance is a lifetime commitment. 

You may gradually increase the coverage as your income improves. However do note that you can only upgrade the plan if your health permits.

There are few things that the readers may need to be aware, especially when choosing a medical card, for a lifetime protection.

1. Annual Limit
   The annual limit is more important than the lifetime limit as it denotes how much a person can claim in a policy year. A 30 days Intensive Care Unit (ICU) due to coma or stroke in a private hospital can costs RM100K or more.
   
   If the person has RM50K annual limit, the insurer is only liable to pay up to RM50K per policy year. Another RM50K will have to be paid by the policy holder.
   
   Suppose the person buys a medical card at age 20 with an annual limit of RM50K. The question is, would the amount of RM50K is still relevant when the person is age 50?
   
   Tip: Look for plans that does not have any Annual Limit or at least waive the annual limit, to plan ahead.
   
   
2. Lifetime Limit
   The Lifetime Limit is the limit that the policy holder can claim. Once the lifetime limit has been exceeded, the medical plan will cease coverage.
   
   Tip: Where possible, look for plans that does not have lifetime limit or at least plans that are able to cater for the next 5-10 years medical inflation.
   
   
3. Cancer Treatment & Kidney Dialysis
   Not many are aware that for Cancer Treatment or Kidney Dialysis is an OUTPATIENT procedure. This means that the client is needed to pay first and claim later.
   
   Tip: Check if the plan covers TAKE HOME DRUGS, LONG TERM MEDICATION & CONSULTATION CHARGES. It is rather pointless to have a high annual/lifetime limit if it excludes the take home drugs, long term medication & consultation charges, no?
   
4. Full Claim, Co-Insurance & DeductibleGet accustomed to whether the plan is able to be claim in full, or you will have to pay certain excess.
   
   Tip: Do not be put off with plans that needs the client to pay excess. As you may already know having the insurer to bear all the risk means transferring higher risk to the insurer. By agreeing to pay the excess, the policy holder is transferring lesser risk to the insurer, hence a lower insurance charges will be imposed.
   
   It is not everyday that one needs to be admitted and if the policy holder is able to absorb more (during hospitalization), it will help to save on the insurance charges resulting in lower insurance premium.
   
   In short, plans that are full claim, the policy holder is already paying the 'excess' upfront.
5. Guaranteed Renewal
   Always check to ensure that the plan is NON-CANCELLABLE, irrespective of how much has been claimed (as long as the policy holder does not exceed the lifetime limit).
   
   
6. Covered Term (70, 80, 90 or 100?)
   If possible, try to get covered until age 80 or more (if you are able to afford).
   
   The retirement age in Malaysia is generally at age 60, whereby one will lose the company health insurance coverage and one will have to rely on their own personal medical card. 
   
   Tip: The annual & lifetime limit plays an important role as we do not want to be 'medically bought out' once we are retired with no company medical coverage.
   
   Do note that the insurance charges will increase as we get older. The premium will also needs to be paid until the end of the tenure. Hence it is vital to plan ahead for some savings in order to pay off the higher insurance charges at later years.
   
   
7. Insurance Charges
   
   Insurance is about risk transference or risk sharing. Let it be known that the insurance charges is relative to the 'risk' being insured and the insurance charges will increase as we get older.
   
   
   The insurance charges is NOT GUARANTEED and in general the insurer reserves the right to increase the insurance charges should the claims for that plan exceeds its threshold.
   
   
   Tip: Therefore, plan upfront and be prepared to fork out more as the insurance charges increases. For plans that has cash value, do get to know how much cash values is in the policy.

Remember, as we get older, and with illnesses slowly creeping it, it will be harder to upgrade/extend the coverage

The Star: Insurance fees to go up by 6%

<< Full Story Here >>

PETALING JAYA: Staying healthy will cost even more as medical insurance fees, charges and premiums, go up next month.

Although life insurance is exempted from the Goods and Services Tax (GST), policyholders must pay at least 6% more for medical and health-related insurance coverage.

The National Association of Malaysian Life Insurance Fieldforce and Advisers has appealed to the Government to exempt “necessity policies” covering hospitalisation and critical illnesses from the GST.

Otherwise, many may surrender their policies or lapse in their premium payments, said its president Victor Kho Chui Ing.

“GST will be an additional cost for individual policies that are coming up for renewal.

“If a family of five with a medical policy pay a total of RM7,500 per annum, the additional cost to them would amount to RM450 yearly.”

He said many prospective clients and those planning on topping up their existing policies had adopted a “wait-and-see” attitude.

“They want to gauge the GST impact on their finances first because the new tax applies not only to insurance but to most of their daily expenses,” Kho said.

He warned that it was crucial for policyholders to understand that GST would impact all traditional and investment-linked policies which had medical, critical illness or personal accident benefits attached.

For traditional policies, the GST is imposed on the premium. For investment-linked policies, it is charged on the insurance charges.

For investment-linked policies, insurance charges escalated with age because of higher insurance charges, he said.

“For example, at age 35, insurance charges for the medical benefit alone is about RM422. At age 65, it rises to almost RM2,500 – exceeding the RM1,176 annual premium paid for the medical coverage alone,” he said, adding that some policyholders above age 60 might pay up to RM5,000 in annual insurance charges.

“With a 6% GST imposed on insurance charges, many senior citizens may potentially lose their coverage or need to top up premiums to sustain their coverage.”

Kho urged policy holders to check their policy statements regularly.

“For investment-linked policies, the annual premium may not increase as the GST and insurance charges are deducted from the policy’s cash value, thus eroding the accumulated cash value meant for retirement, children’s education and sustaining future premiums.

“You need to keep tabs on the cash value or you may wake up at age 60 without a retirement fund.”

He said the majority of more than two million life insurance policy holders nationwide had investment-linked and traditional policies with attached medical coverage.

Life Insurance Association of Malaysia (LIAM), in a statement, said fees and charges imposed on investment-linked policies and critical illness, medical and health and personal accident premiums were subject to GST.

LIAM advised all policyholders to contact their insurance companies to find out the amount payable from April 1.

General Insurance Association of Malaysia (PIAM) chairman Chua Seck Guan said policyholders were required to pay the additional 6% as all general insurance policies were subject to GST “unless the risks are located outside Malaysia”.

“However, general insurance premiums will remain the same,” he said.

A Prudential Assurance Malaysia Berhad spokesman said there was no GST for life insurance products like endowment, child, education and annuity.

Insurance Charges (Cost of Insurance)

To the readers of this blog, you may already know that insurance is a business of Risk Transfer or Risk Sharing (Takaful Concept).

The risks can be categorized into a few category:-

1. The age of the person (the older the person, the higher risk of claiming)

2. Smoking status (a smoker has higher chances of developing smoking related illness)  

3. Occupation (a construction worker posses different risk as compared to an office worker)

4. Gender (based on mortality rate)

5. Health Status of the person (a loading or extra charges may apply, for example mild hypertension)

By agreeing to pay a 'price' known as 'premium' the insurer in turn shall provide the financial assistance (coverage) in times of unexpected events such as untimely Death, Dread Disease (Critical Illness), Accidents, Total Disability & Hospitalization.

The coverage given comes with a costs based on the attained risk (as mentioned above) and not known to many, the costs (Insurance Charges) will INCREASE as we get older.

The next time you are given the Sales Illustration, do try to read and understand the associated charges and not only based on the 'flowery' sales talk by the agents.