The Selangor state government is revamping its Peduli Sihat scheme into an RM1.4 billion health insurance programme next year with basic benefits for low-income residents.

Selangor Menteri Besar Amirudin Shari said in a speech while tabling the 2021 Selangor Budget at the state legislative assembly last Friday that the rebranding of Peduli Sihat next year as the Peduli Sihat Insurance Scheme will provide benefits for death, chronic diseases, disability, as well as outpatient treatment in private clinics.

“To fulfill the state government’s desire in creating this overall health insurance scheme, RM42.5 million has been allocated for 85,000 policy holders,” Amirudin said, referring to 85,000 families as the policy holders. The RM42.5 million is insurance premiums borne by the state at RM500 per family for 85,000 families next year.

Beneficiaries of the Peduli Sihat Insurance Scheme will get maximum RM500 per year to spend on primary care, including medical check-ups and vaccination, in private clinics, as well as four insurance benefits:

  • Death or total permanent disability (TPD) by accident (RM5,000 payout)
  • Death or TPD by natural causes (RM5,000 payout)
  • Critical illness (RM5,000 payout)
  • Funeral expenses (RM1,000 payout)

Each family is entitled to one claim from each insurance category in a year. There are 1,529 panel clinics under the Peduli Sihat Insurance Scheme in Selangor and the Klang Valley.

Peduli Sihat is open to families living in Selangor with a monthly household income of RM2,000 and below, who must be born in Selangor or have lived in the state for at least 10 years. Beneficiaries must be Bantuan Sara Hidup (BSH) cash aid recipients.

SELGATE Healthcare CEO Dr Nurul Muaz Omar

SELGATE Healthcare CEO Muaz Omar said SELCARE Insurance PCC Ltd — which is underwriting the Peduli Sihat Insurance Scheme — is providing a maximum payout of RM1.4 billion next year, which translates to a 3,300 per cent return on investment, based on RM42.5 million in premiums paid by the state.

SELCARE Insurance PCC Ltd is a wholly owned subsidiary of SELGATE Healthcare, which is a wholly owned subsidiary of SELGATE Corp, which is in turn a wholly owned subsidiary of state-owned development agency Selangor State Development Corporation (PKNS) in the country’s most developed state.

Currently, the state health insurance programme is only open to families, with no limit on the number of eligible members in a household. Muaz said the Selangor state government planned to open it up to the general public soon to purchase various packages.

The Peduli Sihat Insurance Scheme does not have an age limit for beneficiaries, nor limits on the kind of services or treatments obtained from private clinics. The critical illness benefit, however, only applies to diagnoses made in 2021, which means that people currently diagnosed with critical illnesses are not eligible for coverage under the state insurance plan.

“If you look at how Peduli Sihat has been run by the state, when we first set out, it was purely primary care. And as you go along, you make improvements to the programme. We expanded it from just primary care, you can do medical check-ups, screenings,” Muaz told CodeBlue in a phone interview Friday.

“The programme then added five types of immunisation — influenza, pneumococcal, typhoid, Hepatitis B, and meningococcal — that they can use the RM500 for. The state also wants to ensure the programme is kept afresh and more innovative, and coverage will be bigger and better.”

When asked about the poor uptake in private clinic visits for Peduli Sihat in its current form, Muaz acknowledged that utilisation dropped during the Movement Control Order (MCO) period that started in March this year, saying: “I think that’s not just in the GP (general practitioner) sector, but everywhere.”

SELCARE has reinsurance companies for the Peduli Sihat Insurance Scheme with its RM1.4 billion coverage, with Muaz saying, without elaborating further: “We have a few choices, local and international”. Reinsurance companies provide insurance against loss for other insurance companies.

Muaz explained that Peduli Sihat provided private primary care to the bottom 40 per cent (B40) of income earners to save them hours’ long wait time at public health clinics.

“Do the poor get insurance coverage? That’s what the state wants — the state can’t cover everything, but with the budget they have, I think this is the next best thing. As I said, the B40 don’t have insurance coverage for anything that they foresee, like critical illness, death, TPD. At least the state can cover them, with a bit of help to the family,” he added.

When asked if the Peduli Sihat Insurance Scheme was a duplication of the national mySalam health protection scheme, Muaz pointed out that mySalam does not cover death or TPD, only critical illness.

“But if you see mySalam’s payout — it’s run by a Singaporean insurance company — it’s about RM20 million for the whole country. The process is very cumbersome and stringent, and using the standard insurance company’s guidelines,” Muaz said, promising that the Peduli Sihat Insurance Scheme would have “more relaxed criteria”.

Former Prime Minister Najib Razak, who has been a vocal critic of mySalam introduced by the previous Pakatan Harapan (PH) administration, reportedly said last month that as of July 5, mySalam has only paid out RM20,819,250 for 16,893 claims, including Covid-19 cases, despite Great Eastern contributing RM400 million annually to the mySalam fund since 2019, or RM2 billion over five years. Neither PH nor the current Perikatan Nasional government have explained what exactly will happen to the remaining unutilised monies in the mySalam fund at the end of five years.

Besides an RM8,000 lump sum cash for critical illness diagnosed from January 1, 2019, mySalam also gives beneficiaries from the B40 group a maximum of RM700 per annum for up to 14 days’ hospitalisation (RM50 per day) for any condition. Then-Finance Minister Lim Guan Eng said last February that mySalam paid out over RM13.7 million to more than 9,662 individuals in 2019, which amounts to just 3.4 per cent of an estimated RM400 million that the mySalam fund received that year.

mySalam is applicable at all Ministry of Health (MOH), public university, and army hospitals. The health protection scheme was also expanded to middle class Malaysians since February this year, who are eligible to get RM4,000 cash if diagnosed with a critical illness.

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