MP moots social health insurance scheme to strengthen healthcare ecosystem

A DAP lawmaker has reiterated the need for a social health insurance scheme in order to strengthen the national healthcare system. Dr Kelvin Yii (PH-Bandar Kuching) highlighted that by leveraging Employees’ Provident Fund (EPF) contributions and Socso’s Employment Insurance System (EIS) contributions, the implementation of social health insurance could generate approximately RM32bil in additional funds. He made this statement during the debate on Budget 2024 at Dewan Rakyat on Monday (Oct 23).

Dr Yii proposed that a 0.5% contribution from EIS, based on an average income of RM2,000 for over 6.2 million workers, would amount to RM5 per person. This would result in a yearly total of RM780mil, excluding employers’ contributions, which could be used for the construction of two small hospitals. He also mentioned that individuals with a RM4,000 income and a 0.25% contribution would contribute RM10 monthly and RM1.56bil annually.

Regarding EPF, Dr Yii highlighted that RM31.1bil was allocated to it in 2019. Combining the EPF and EIS amounts, the total would be nearly RM32bil. Dr Yii emphasized that in conjunction with the budget allocations for the Health Ministry, additional funds from social health insurance could be utilized for various purposes such as acquiring new healthcare equipment, repairing dilapidated facilities, supporting healthcare workers, addressing brain drain in the industry, and promoting digitalization.

Dr Yii stressed that the implementation of this scheme should be gradual and not involve significant salary deductions. He suggested starting with 5% contributions from both employees and employers, which would amount to approximately RM15bil to RM17bil annually. He also recommended initially targeting employees of government-linked companies who already have private insurance, thus reducing the need to duplicate efforts.

Dr Yii asserted that the successful implementation of social health insurance could lead to positive changes in the healthcare system, such as shorter waiting times and improved medicine in healthcare facilities. In addition, it could introduce competition to private insurance providers, prompting them to lower their premiums, which would benefit the overall healthcare ecosystem. Dr Yii acknowledged that implementing this scheme may not be popular and emphasized the importance of effective communication.

He assured that the introduction of social health insurance does not imply privatizing the healthcare system. Instead, it entails a model where the government manages the insurance, not the private sector. The underlying principle is not profit-driven, and the implementation should be progressive and not cause market shocks or burden the public.