Malaysian Re’s “ASEAN Insurance Pulse 2024” report addresses critical healthcare financing issues across the region, examining diverse healthcare systems, financing mechanisms, and the growing role of insurers in enhancing access to equitable healthcare.
The report also outlines strategies for insurers to balance market growth with improved community health outcomes.
The report underscores significant disparities in ASEAN healthcare systems, shaped by varying socio-political and economic contexts. For instance, Brunei and Thailand offer tax-funded universal healthcare, while Indonesia and the Philippines operate national health insurance schemes funded by employer and worker contributions.
Private health insurance, valued at $7.5 billion in 2023, plays a significant role among wealthier urban populations, whereas out-of-pocket expenses dominate in Myanmar and Cambodia, accounting for 70% and 55% of healthcare spending in 2021, respectively.
Malaysian Re noted rising demand for private health insurance across ASEAN, driven by increasing disposable incomes, higher literacy rates, expanded internet access, and heightened awareness of healthcare needs following the COVID-19 pandemic. The perception of private healthcare as more efficient than public systems further bolsters demand.
However, the Pulse 2024 survey revealed that while many participants found their national healthcare systems satisfactory or partly satisfactory, disparities in access remain a challenge. Urban areas typically have better healthcare availability, and wealth significantly impacts treatment quality.
Healthcare costs are increasing throughout ASEAN, fueled by medical inflation, aging populations, and a rising disease burden, including chronic conditions such as diabetes, cancer, and cardiovascular diseases.
Malaysian Re emphasized that unhealthy eating habits and sedentary lifestyles are exacerbating these trends, adding strain to both public and private healthcare systems.
The report noted that public healthcare systems face mounting cost pressures as governments seek to manage the financial burden, potentially compromising healthcare quality and accessibility. Private healthcare systems are similarly constrained by rising medical costs and inefficiencies, including opaque pricing and overconsumption of medical services.
Survey participants highlighted a lack of alignment between patients, insurers, and healthcare providers, noting that there are limited incentives to control costs.
The health insurance line, often written as a rider to life insurance policies, was described as marginally profitable. Malaysian Re reported minimal new capacity entering the health insurance market, reflecting these challenges.
Health insurance premiums are rising substantially, presenting affordability challenges for older populations, who already face higher costs due to increased risk.
Malaysian Re warned that rising rates could deter policyholders from maintaining coverage, particularly in lower-income segments. As ASEAN’s younger populations age into higher-risk categories, affordability concerns could reverse progress in health insurance penetration.
Survey participants highlighted strategies to mitigate rising claims costs beyond rate increases. These include risk reduction through exclusions and coverage limits, enhanced cost control by scrutinizing hospital bills and emphasizing outpatient care, and preemptive measures such as preauthorization of elective procedures and partnerships with hospitals.
Malaysian Re also pointed to broader collaborations between insurers, policymakers, and hospital operators to improve market conditions and introduce cost-control mechanisms, such as the Diagnosis-Related Group system.
The Pulse 2024 report advocates for greater investments in prevention and education to address the growing prevalence of non-communicable diseases. It also encourages the expanded use of digital technology and telemedicine to improve efficiency and reduce costs.
Malaysian Re highlighted these measures as essential for controlling costs and ensuring the long-term sustainability of health insurance markets in ASEAN.
By addressing the region’s healthcare financing challenges, Malaysian Re aims to provide insights that can help insurers balance affordability, access, and sustainability in an evolving market.
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