Impossible to save enough when that medical emergency suddenly knocks on our door

Categories: ABCs of Personal Finance

Impossible to save enough when that medical emergency suddenly knocks on our door

Appendicitis Did Not Tell Me It Was Coming

This happened probably 15 years ago. I went to bed early because I had an early morning flight the next day. I was not feeling well. My stomach seemed bloated, and there was pain no matter which side I turn to on my bed. I was sweating.

However, I guess my pain tolerance was quite high, and I boarded the plane to go to Singapore for a business trip. When I arrived, high fever started.

My colleague saw my pale face and quickly accompanied me to a nearby clinic, and the doctor recommended that I go to the hospital immediately. He suspected it was appendicitis.

At the hospital, it was confirmed to be appendicitis. In fact, the situation was critical because my appendix had burst. I was wheeled into the operating theatre, and I learnt later that I had been in a precarious situation.

I recovered, but the total cost of that experience was RM25,000. I was lucky because I had medical insurance coverage. Now, imagine if I did not. I would have lost a huge chunk of my savings.

Impossible to save fast enough

Studies have shown that healthcare costs are rising. Actually, healthcare costs may continue to rise as more people demand better healthcare and medical technology advances.

Many households can also face financial distress because of medical expenses. In April 2022, The Malaysian Reserve reported that 5.4% of the debt cases handled by the Credit Counselling and Debt Management Agency (AKPK) were attributed to high medical expenses. Read the report here.

That figure is historical, but the underlying concern remains relevant.

According to Bank Negara Malaysia, medical cost inflation reached 15% in 2024. The Ministry of Health’s national health accounts also show that household out-of-pocket spending accounted for 39% of Malaysia’s total healthcare expenditure in 2024. That is a substantial burden for families to carry themselves.

Five reasons why we need medical insurance

#1 We cannot predict when we will fall sick.

My appendicitis did not give me a calendar invitation. I had no idea I would need emergency surgery that day.

We can exercise, eat healthily and go for regular medical check-ups, but none of these guarantees that we will never need hospitalisation. Medical insurance helps us prepare financially for unexpected medical events.

#2 Medical bills can wipe out our savings.

Imagine spending years saving RM50,000 over 10 years, only to face a medical bill of RM25,000. Half our savings could disappear in one incident.

Savings are important, but they also have other purposes: emergencies, children’s education, buying a home and retirement. Medical insurance can help protect our savings from being depleted by eligible medical expenses.

#3 We may need more than our current income can support.

A serious illness may involve surgery, hospitalisation, medication and follow-up treatment. We might be able to pay for a minor clinic visit, but a major medical event can be a very different story.

Insurance provides financial protection according to the policy’s terms, limits and exclusions. It does not mean every bill will automatically be paid, so we must understand our coverage.

#4 We want more choices when treatment is needed.

Some people prefer private healthcare because of its facilities, convenience or access to specialists. Public healthcare remains an important part of Malaysia’s healthcare system, but private treatment can involve significant out-of-pocket costs.

Having suitable medical insurance may give us more flexibility in accessing eligible private healthcare services without having to fund the entire bill ourselves.

#5 We should not leave our family financially vulnerable.

If a major medical bill consumes our savings, the impact may extend beyond ourselves. Our spouse, children or other family members may need to help pay the expenses.

Medical insurance is one way to reduce this financial risk. It is not a substitute for emergency savings, but it can complement our overall financial plan.

Medical costs will keep rising. What should we do?

The answer is not simply to buy the most expensive medical insurance policy.

We should compare annual limits, room-and-board benefits, exclusions, waiting periods, co-payments and deductibles. We also need to consider whether we can afford the premiums over the long term, especially as we grow older. Premiums or contributions may increase, and coverage is subject to policy conditions.

Bank Negara Malaysia and other government agencies are also working on measures to improve the affordability and sustainability of medical insurance and healthcare. The proposed standardised Base Medical and Health Insurance/Takaful plan, known as MediAsas, is targeted for a nationwide launch in January 2027. Details and final pricing should be checked when the product is officially launched. Read BNM’s latest MHIT information.

For me, that RM25,000 appendicitis experience was a reminder that financial planning is not just about saving and investing. It is also about protecting what we have already accumulated.

We cannot predict when we will fall sick. But we can take steps to prepare for the financial consequences.

Happy planning, and stay healthy, yeah!

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