Top Questions to Ask Your Insurer About Active Pricing
Active pricing promises to introduce a more transparent and value-driven approach to healthcare insurance.
Furthermore, active pricing may be the solution to address the inefficiencies and escalating costs that are affecting the current health insurance ecosystem. However, multiple questions are unanswered regarding this nascent domain that promises to make healthcare more affordable, equitable and accessible for the Malaysian population.
Understanding active pricing
Active pricing is a dynamic health insurance pricing approach where insurance premiums are determined based on the policyholder's claims history
In practice, this innovative pricing model tailors premiums to an individual’s health behaviour and health services utilisation patterns. Thereby incentivising policyholders to maintain good health to potentially lower their premiums over time.
By linking pricing directly to claims experience, active pricing promotes fairness, equity and transparency in the health insurance industry whilst helping contain rising healthcare costs.
Active pricing FAQ: Get your questions answered!
How can active pricing benefit me?
Active pricing offers several benefits for policyholders that principally focus on keeping healthcare and insurance premiums affordable and sustainable.
Particularly, it rewards policyholders for staying healthy and engaging in responsible use of healthcare services to maintain the lower premium.
This fairer pricing approach that promotes preventive care not only promotes affordability and sustainability for policyholders but also improves public health outcomes.
How can active pricing reduce healthcare costs in Malaysia?
Active pricing can significantly reduce overall healthcare costs in Malaysia by fostering responsible utilisation of healthcare resources and preventing overconsumption. This, in turn, keeps insurance premiums affordable and sustainable for both consumers and insurers.
Furthermore, active pricing helps promote cost transparency and accountability among healthcare providers. By using real-world claims data, insurers can negotiate more accurate and fair reimbursement rates. Thereby, eliminating the inefficiencies and inflated charges often associated with traditional pricing models.
Additionally, active pricing encourages healthcare providers to optimise their services, adopt cost-effective practices, and avoid unnecessary procedures. This ultimately drives down operational costs.
Who is eligible for active pricing?
To be eligible for enrolling in an active pricing plan, individuals usually need to meet specific criteria set by the insurance provider. For example, being a policyholder of a specific insurance plan.
Overall, eligibility for enrolling in active pricing is often contingent on policyholders' commitment to align with the objectives of the dynamic pricing model.
What happens if I have a pre-existing medical condition?
Active pricing does not discriminate against individuals with pre-existing conditions in terms of coverage eligibility. The principal focus is on rewarding healthy behaviours rather than penalising pre-existing conditions. For more information on eligibility, kindly contact our Wealth Planners.
How can I track my active pricing premium?
To track and access information about your current and future premium estimates with active pricing, always:
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Review your policy documents, such as policy schedules and terms and conditions, to understand how active pricing applies to your specific plan.
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Contact your insurer's advisory team directly to inquire about your current premium level— and how it may change based on your claims history.
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Engage your wealth planner or broker to understand how active pricing affects your premiums. Furthermore, ask for guidance on how to manage your healthcare expenses to minimise premium increases proactively.
Are there any additional fees or charges associated with active pricing?
Active pricing does not involve additional fees or charges beyond the standard premiums determined through this dynamic pricing approach that takes into account claims history and health behaviour.
The premiums themselves may fluctuate based on claims history, but no supplementary fees are imposed on policyholders.
How is my active pricing premium determined?
Active pricing systematically determines premiums based on a policyholder's past claims history.
By examining historical claims, insurers assess the frequency and cost of healthcare services utilised by the policyholder. This consequently enables them to predict future medical expenses more accurately.
Policyholders who maintain a healthy lifestyle—adhering to a balanced diet and avoiding smoking—present a lower risk of expensive medical conditions.
How often are premium rates reviewed under active pricing?
Premium rates under active pricing are typically reviewed on an annual basis. Policyholders start at the lowest premium level and can enjoy discounts. Each year, their premium level is methodically adjusted based on any claims made during the review period. In practice, no claims lead to lower premiums, and more claims result in higher premiums.
What factors influence the rise or decrease of my premiums?
Several standout factors may influence the rise or decrease of premiums within one’s active pricing plan. One such factor is a policyholder's previous claims history. In practice, a history of claims can lead to higher premiums, while a period without claims may result in premium decreases.
The extent of one’s utilisation of preventative care services also plays a crucial role. For context, regular check-ups and screenings may prevent serious illnesses, leading to lower premiums as you stay healthy and no claims are made.
Is active pricing an insurance rider?
Active pricing is not an insurance rider in itself— but rather a pricing model used by some insurance companies to determine premiums for specific health insurance plans.
Is there a grace period for filing claims under active pricing?
Yes, there is a grace period for filing claims under active pricing for health insurance. Just like your regular policies, this grace period allows policyholders to renew their policy— even after the due date. Thus, it provides additional time to make the payment and maintain their coverage benefits.
However, failure to make the payment within this grace period may lead to negative consequences such as policy cancellation or penalties. To find out more, please contact your insurance broker or wealth planner.
How does active pricing compare to traditional health insurance plans?
In contrast to Prudential’s existing insurance plans that typically rely on fixed premium structures, active pricing is directly linked to individual’s claims history.
Furthermore, unlike Prudential’s traditional plans, active pricing encourages policyholders to engage in preventive care and adopt healthy lifestyles to potentially lower their premiums as it allows them to be in control of their health and stay healthy.
Overall, traditional plans offered by Prudential Malaysia are characterised by fixed premium rates that may not reflect the policyholder's actual healthcare utilisation or health status.
And though they provide a sense of stability with consistent premium amounts, they do not offer the same level of flexibility and potential cost savings that active pricing can provide.
Is active pricing medical insurance suitable for young adults?
Yes, active pricing medical insurance is suitable for young Malaysians as it offers the opportunity for long-term cost savings— enabling them to allocate funds towards other developmental projects.
For young adults who are typically healthier and have fewer pre-existing conditions, the savings realised can be redirected towards legacy plans and even life insurance.
Read: How active pricing medical insurance could benefit young Malaysians?
Is active pricing available for all types of medical insurance plans?
At Prudential, we offer a medical plan that rewards your healthy lifestyle and provides a discount on your medical insurance charges when you have no claims, all with no changes to your coverage. Find out more with the all new PRUMillion Med Active.
Conclusion
By linking an individual's premium level to their claims history and health behaviour, rather than historical costs, active pricing may lead to better health outcomes and lower overall costs across the Malaysian health ecosystem.
Moreover, its focus on value-based care can drive efficiencies in the healthcare system, allowing resources to be allocated towards more cost-effective interventions.
This, in turn, may promote transparency and accountability within the healthcare ecosystem whilst counteracting health inflation— ultimately benefiting the public health system of Malaysia as a whole.