Think Your Company's Group Medical Plan Has You Covered?
Posted 26 Jan 2025, by Sam Ng
“I’m covered by my company’s group medical insurance under employee’s benefits plan, do I still need to buy a personal medical insurance?”
I’d like to start with a fact known to many, but maybe less known to some. And it is that medical insurance is valuable not only for accessing treatments and services at private healthcare but also for covering treatments which are not subsidized by the government.
Overpaying for Insurance?
Many who ask this question are concerned about overpaying for insurance protection and want to avoid that.
I do agree overpaying for insurance is unnecessary. And I will also highlight that most group plans offer limited coverage. Why?
Group plans are usually approved without the need to review individual medical histories for underwriting.
Since insurance companies do not pre-select individuals for medical coverage based on health condition, they manage their downside risk by imposing coverage limits. It’s simply sound economics.
Figure: An example of group plan with low annual limit.
Limited Coverage
Once the claim limit is reached, you will be responsible for the balance of the bill.
The situation becomes worst when medical bills grow enormous, especially for diseases that require advanced treatments, or multiple courses of therapy, or the use of new technologies or new drugs. This often leads to a critical situation that could either break or bond a family.
Age Limit
Group plan is also not for whole life. The plan will be terminated after you leave the company.
Some insurance companies allow employees to convert their group plans into personal medical plans, but these are often valid until retirement age only.
Figure: Group plan covers till retirement age only.
Some would argue that they can wait till retirement age to sign up for personal medical plan.
These individuals risk facing two issues: reaching the maximum entry age and becoming not eligible to purchase a plan, or developing poor health conditions in old age, leading insurance companies to deny coverage.
Without sufficient medical coverage, getting treated at a private hospital in Malaysia can cost a fortune.
And that’s the reason many Malaysians turn to public hospitals for low-cost healthcare services. However, public healthcare is not without its issues.
Long Waiting Time at Public Hospitals
High number of patients have made public hospitals overcrowded. Treatments are often delayed due to the number of patients in queue, where patients in critical conditions are prioritized.
These issues are not new and primarily stem from the uneven distribution of resources and workloads between public and private hospitals.
Figure source: https://pmc.ncbi.nlm.nih.gov/articles/PMC10125242/ (Uneven distribution of workloads between public and private hospitals)
In Conclusion
I’d encourage you to get a comprehensive medical coverage through a personal plan. But ultimately, the decision lies with you.
And your answers to the following questions may help you decide.
“Can you afford it?”
“Do you want the option to access private healthcare treatments without burning a hole in your wallet?”
Thank you for reading!
