Malaysian MPs Seek Stricter Health Insurance Regulations to Improve Claims Processing

Malaysian lawmakers have proposed stricter regulations for the private health insurance sector to address claims processing delays and restrictions on document requests. Key issues include prolonged investigations by insurers and excessive demands for medical records, impacting patients with serious illnesses needing urgent financial support. Lawmakers advocate limiting the time insurers can investigate claims and restricting how far back they can request medical records, emphasizing the burden on claimants. Concerns have been raised about government-backed insurance schemes like mySalam, which reportedly has a low claims approval rate compared to the private sector, suggesting systemic issues in claims management. There are calls for new consumer protections within proposed government health insurance products, including prohibiting indefinite claim deferrals, setting clear investigation grounds, imposing penalties for improper delays or claim denials, and automatic approvals for critical conditions once diagnoses are verified. Another focus is prohibiting insurers from denying claims based on pre-existing conditions unrelated to the diagnosis, especially given rising rates of non-communicable diseases and late-stage cancer diagnoses in Malaysia. Standardized guidelines are urged to ensure consistent and transparent claims processing timelines across insurers and third-party administrators, coupled with the need for insurance assessors to have medical knowledge to avoid unjustified denials. Proposals also include establishing a specialized health insurance tribunal with legal, medical, and insurance experts to resolve disputes efficiently and enforce penalties on insurers for improper claims handling. Policymakers stress consumer protections such as guaranteed coverage regardless of health status and oversight of premium adjustments. Meanwhile, some members of Parliament emphasize the role of existing complaint mechanisms via financial regulatory bodies and caution against government micromanagement of insurance processes. The Malaysian government’s upcoming basic medical and health insurance/takaful product is under development, with stakeholders highlighting the need for robust consumer protections and transparent regulatory frameworks to avoid prior system weaknesses.