MEDICAL INSURANCE: HOW IT WORKS

It was just another day at the office for Alex. As he took his seat, a sharp pain jolted through his entire back. The pain shocked him, and soon turned into a numbing, pulsing soreness. He had to ask a colleague bring him to a hospital for a check-up.

Luckily, he had his medical card on hand. At the hospital, he was given outpatient treatment and released, but not before being given a bill for his treatment. This surprised him – wasn’t the medical card supposed to pay for the cost of treatment?

“I DON’T GET IT! WHY AM I STILL EXPECTED TO PAY FOR A PORTION OF MY MEDICAL BILLS, EVEN WITH MY MEDICAL CARD?”

Most people believe that a medical card means total and complete coverage of medical costs, but this is only true to a certain extent. In Alex’s case, his policy was subject to a feature called the co-insurance and the deductible. Co-insurance is a form of cost-sharing, or splitting the cost of the medical service between you and your insurance company. 1

Here is how it works. If you happen to be diabetic, you may visit the doctor on a regular basis. You just paid your RM1,500 deductible, which is the amount you have to pay for health care services before your health insurance begins to pay. From here on out, as your plan includes a 30% co-insurance sharing cost, you will only need to pay for 30% of your medical bills while the insurer pays the remaining 70%. So, if your treatment costs RM150, the plan will pay RM105 and you will pay RM45.1

For Alex, this was his first time using his medical card and he had yet to meet his deductible of RM2,000. Thus, he had to pay that amount before he could enjoy full coverage from his insurer.

The percentage ratio of co-insurance payment depends entirely on your medical plan. If Alex had decided to opt for a medical plan with zero co-insurance and deductibles, this is also possible as he could select a plan like A-Plus Med. This plan in particular provides seamless admissions to 98 panel hospitals in Malaysia, and it can also be expanded to include the policyholder’s spouse and children.

The following week, the pain returned, this time more intensely. After the necessary paperwork at the hospital’s admissions counter, Alex was told to wait for his insurer to issue a guarantee letter before he could be admitted. So imagine his shock when he was informed that his insurer refused to issue a guarantee letter – which means that he has to bear for the cost of his treatment!

“THIS IS UNBELIEVABLE. I THOUGHT I COULD CLAIM FOR ALL MEDICAL COSTS WITH MY CARD! NOW I HAVE TO FOOT MY OWN BILL?”

While a medical card does allow you to walk into a hospital without having to worry about the amount of cash in your wallet, it is not always the case. Along with a medical card, what is also needed is a guarantee letter – especially for more serious medical cases.

“WHAT IS THE PURPOSE OF A GUARANTEE LETTER, ANYWAY?”

A letter of guarantee is a letter of assurance that is offered by the insurer to the hospital confirming that the cost of treatment for the patient will be taken care of by the insurance company.

This would involve background checks to see if Alex had previously experienced similar pain, or have received treatment for pre-existing illnesses (any kind of injury or sickness he may have had prior to his insurance plan).

Depending on the plan, there are certain restrictions to take note of such as non-coverage for any medical or physical conditions arising within 30 days from the commencement of the plan or any on-going treatment or surgery.2 Medical plans are only valid for the treatments for medical conditions that arise after the plan has been implemented.

While a medical card does allow you to walk into a hospital without having to worry about the amount of cash in your wallet, it is not always the case. Along with a medical card, what is also needed is a guarantee letter – especially for more serious medical cases.

“SO, WHAT CAN I DO?”

The insurer usually requires time for investigation of certain cases, so without the guarantee letter, Alex has to make the payment for his treatment first. Not to worry though – all he has to do is attach his proof of payments to a report that he can submit to his insurer’s claims department. If everything is approved, he would be issued a guarantee letter and can seek reimbursement of the initial costs.

“MY INSURER IS NOT PAYING FOR MY MEDICAL BILLS ANYMORE! WHY IS THIS SO?”

In the unlikely event that your insurer does not foot your medical bill, an explanation would be provided. For example, it could be due to you having met your annual limit. An annual limit is the maximum amount of medical claims you are entitled to in a year. If your limit is RM100,000, any medical expenses beyond that amount will have to be borne by you. It’s bes to check if your plan has any annual or lifetime limit (the maximum amount claimable in a lifetime).

“WHAT ARE SOME OF MY RIGHTS AS A CONSUMER?”

All insurers have a cooling period (also known as a free look period), which is a time frame to allow a new customer to consider their purchase decision. During this period (usually 15 to 30 days), the new customer can choose to cancel their policy and have their full premium returned.

If you ever find yourself in a situation similar to Alex’s, stay calm. Contact your life planner or your insurer, and have on hand your medical report or necessary paperwork. We’re here to help!