What Is Medical Inflation And How Does It Affect Your Insurance Premium? Find Out Here

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This Spotlight is sponsored by Prudential.

According to Aon's 2022 Global Medical Trend Rates report, the current medical inflation rate in Malaysia is 12.0%, which is six times higher than the annual general inflation rate.

In another recent report by Willis Towers Watson 2022 Global Medical Trends Survey, the global average medical trend rate is projected at a much higher rate for later this year, due to the rescheduling of elective medical procedures previously postponed due to the pandemic, as well as the increase of medical tourism after the international travel ban is lifted.

Medical inflation can be referred to as the increase in the costs of medical treatment over time, and also the increase in the unit cost of medical services. With the rise of new technologies, medication, and treatments, all of these innovations in healthcare are what cause the medical inflation rate to increase.

According to the National Council on Compensation Insurance, it is measured by averaging annual price changes for each goods and services in the basket, by the share weights of each item in the consumer's base year expenditure.

Here's why medical inflation happens:

1. Medical advancement
Thanks to new technology and medication, the quality of healthcare has improved significantly. However, it also means higher medical costs, in order to fulfil the demand for qualified health professionals and medical instruments.

2. Increased utilisation of health services
More people are using healthcare services more frequently, which could be due to the fact that non-communicable diseases are on the rise in Malaysia. Plus, there is a higher demand for medical treatment from older people, as illnesses and disorders become more common.

3. Unhealthy lifestyle choices
Non-communicable diseases due to occupational health problems, sedentary lifestyles, and bad eating choices are costly to treat, and may require long-term treatment.

Medical revision involves revisions to premium or insurance charges according to current healthcare costs.

The adjustment of charges to your medical insurance premium will take into consideration relevant factors such as increases in hospital and doctor charges, advancement in medical treatments and medication, as well as the increasing demand for better healthcare services.

The bottom line is, when you are choosing a medical protection plan for yourself, it is important to consider investing in a medical protection plan that is sustainable in the long run, covers unprecedented health conditions such as pandemic-related sickness, and provides access to the latest medical treatments.

That's right, with medical plans such as PRUHealth, PRUMedic Overseas, PRUValue Med, PRUMillion Med, and more, you can enjoy Total Pandemic Protection. From now on, this essential coverage will automatically be applied when you sign up for any of Prudential's medical plans.

With this enhanced protection, you can rest easy knowing that you and your loved ones will be protected when you need it the most.

One way is by practising a balanced lifestyle on a daily basis. This means eating a healthy diet, exercising on a regular basis, and getting enough sleep every night.  These actions, in turn, will eventually reduce the amount of costly treatments required at healthcare facilities.

In the event you need to make a claim for insurance, be a smart consumer by requesting for an itemised bill from the hospital. That way, you'll be able to thoroughly check what procedures, services, or medication you're being charged for. And, you can even seek for a second opinion when deciding whether the treatment option is necessary, or if there are better options out there.

As your trusted life partner, Prudential regularly reviews their medical plans against current healthcare costs, to ensure you reap the benefits of your long-term medical protection plan that is affordably priced. This includes providing coverage for the latest medical technology and treatments, and additional coverage such as Total Pandemic Protection.

Here's how Prudential is managing their medical business in regards to medical revision:

- Ensure panel hospitals do not apply unreasonable charges for customers
- Negotiate for better medical packages, including discounts for customers at panel hospitals
- Encourage Malaysians to live healthier via Pulse, an AI-powered health and wealth app that provides relevant health insights, online consultations, and contains useful features such as a fitness tracker and vaccine calendar

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