A 42-year-old with a spouse and two children under twelve was repriced from RM 640 to RM 890 a month across the family’s medical cover. We moved them to a 5% co-insurance structure with a RM 1,000 annual out-of-pocket cap and landed at RM 620 a month — RM 20 below what they were paying before the increase.
The decision came down to one number: their worst possible claim year. Here is the arithmetic we ran.
Why Did a Co-Pay Structure Fit This Family Specifically?
Because they claim, and they claim more than once a year.
Over the previous five years the household had six admissions between them — two paediatric (a febrile seizure, a fractured arm), one appendectomy, one day surgery, and two short maternity-related stays. That is a claim rate of roughly 1.2 admissions per year across four insured lives.
For a household like this, the question is not “what does one admission cost me?” It is “what is my ceiling in a bad year?” Those are very different questions, and they point to different products.
A deductible structure has no ceiling — it resets and charges again. A capped co-insurance structure has a hard ceiling written into the contract. For a family averaging more than one admission a year, the ceiling is worth more than a lower headline deductible.
What Are the Two Structures Actually Offering?
| Full coverage (before) | Deductible option | Capped co-insurance (chosen) | |
|---|---|---|---|
| Monthly premium | RM 890 | ~RM 540 | RM 620 |
| Cost-sharing | None | RM 5,000 per policy year | 5% of eligible bill |
| Annual out-of-pocket ceiling | RM 0 | RM 5,000 | RM 1,000 |
| Reset basis | — | Per policy year | Per policy year |
| Annual limit | Up to RM 3 million | Up to RM 3 million | Up to RM 3 million |
| Waived for | — | — | Emergency accident, outpatient dialysis, outpatient cancer, government facilities |
The deductible option was RM 80 a month cheaper. It was also five times worse in a bad year. That RM 960 a year of extra premium buys a RM 4,000 reduction in their worst case — and with four people on the policy and two of them small children, bad years are not hypothetical.
The waiver list mattered more than they expected. Emergency accident cases carry no co-insurance at all, which covers the most likely paediatric scenario in the house.
What Does the Maths Look Like Across a Real Year?
This is the table I put in front of them. Four scenarios, same family, three structures.
| Scenario | Full coverage | Deductible (RM 5,000/yr) | Co-insurance (5%, cap RM 1,000) |
|---|---|---|---|
| Quiet year — no claims | RM 10,680 | RM 6,480 | RM 7,440 |
| One admission, RM 12,000 | RM 10,680 | RM 11,480 | RM 8,040 |
| Two admissions, RM 12,000 + RM 8,000 | RM 10,680 | RM 11,480 | RM 8,440 |
| Bad year — four admissions, RM 46,000 total | RM 10,680 | RM 11,480 | RM 8,440 |
Figures are annual premium plus out-of-pocket cost.
Three things fall out of this table.
The co-insurance structure never loses. In every scenario modelled, it costs less than the full-coverage plan they were being asked to pay for. That is unusual and it is a function of the RM 890 repricing being steep.
The deductible structure only wins in a quiet year. One admission of any real size and it becomes the most expensive option on the table — because the full RM 5,000 lands before the insurer contributes anything.
The co-insurance cost stops moving. Between the two-admission row and the bad-year row, the bill is identical at RM 8,440. The cap has already bound. Once you have paid RM 1,000 in a policy year, further admissions cost nothing beyond the premium. That flat line is the entire product.
What Did They Give Up?
An honest accounting, because there is always something.
- RM 1,000 a year in the bad case. They previously had zero out-of-pocket exposure. Now they have a known, capped exposure. That is a real change, not a cosmetic one.
- Cash at discharge. The co-insurance portion is settled before they leave the hospital, so the money has to be available on the day rather than after a reimbursement cycle.
- Simplicity. A full-coverage card requires no arithmetic at admission. A co-insurance card means checking whether the specific treatment falls under a waiver.
What they did not give up: the annual limit stayed at up to RM 3 million with no lifetime cap, the room and board entitlement was unchanged, every waiting period stayed served, and the policy remained the same contract rather than a replacement.
We set up a standing instruction of RM 100 a month into a dedicated account. Within ten months the account covers the annual cap outright, and the exposure stops being a cash-flow question entirely.
How Do You Run This Calculation Yourself?
You need four numbers, and three of them you already have.
- Count your household’s admissions over the last five years. Divide by five. This is the single most predictive input, and almost nobody does it before choosing a structure.
- Get quotes for all three structures from your current insurer — full coverage, deductible, and capped co-insurance — with everything else held identical. Under BNM’s interim measures your insurer must offer at least one alternative at the same or lower premium, with no additional underwriting and no switching fees. See what your insurer must offer.
- Build the four-row table above with your own figures. Quiet year, one admission, two admissions, bad year. If a structure loses in more rows than it wins, it is not your structure.
- Check the reset basis. Per policy year, per disability, or per annum? MediAsas Teras resets per disability, MediAsas Fleksi per annum, and most Allianz options per policy year — a fundamentally different risk shape in a household with children, however similar the brochure looks. Our comparison of Allianz cost-sharing against MediAsas sets out the difference.
- Confirm the reserve exists before signing anything. Our guide to the cash a co-pay plan requires covers sizing it.
Our co-payment page explains the mechanics, and a policy review will run your own numbers through this table.
Frequently Asked Questions
Is co-insurance better than a deductible?
It depends entirely on how often you claim. Capped co-insurance is better for households that claim more than once a year, because the annual ceiling stops the cost accumulating. A deductible is better for people who rarely claim, because the premium saving is larger and the threshold is only crossed occasionally. Count your household’s admissions over five years before deciding.
What is a co-insurance cap and why does it matter so much?
It is the maximum you can pay out of pocket in a policy year, regardless of how many times you are admitted or how large the bills are. On a 5% option capped at RM 1,000, your worst possible year of cost-sharing is RM 1,000. Deductibles that reset per admission have no equivalent ceiling, which is why the cap is the most valuable feature for a family.
Does co-insurance apply to every claim?
No. Common waivers include emergency accident cases, outpatient kidney dialysis, outpatient cancer treatment, and treatment at government facilities. The exact list is written into the policy wording and varies by product, so read the waivers alongside the percentage rather than assuming the rate applies universally.
Will moving to a co-pay plan restart my waiting periods?
Not if you switch under BNM’s interim measures. That route requires no additional underwriting, no new medical declaration, and no new waiting periods on conditions already covered by your existing plan. Get written confirmation that your served waiting periods and original entry age are preserved before you sign.
Can I move back to full coverage later?
Usually yes, but an upgrade is subject to fresh underwriting on the increased portion, and anything diagnosed in the meantime may be excluded from the additional cover. Moving down is straightforward; moving back up is conditional. Choose the structure you can sustain rather than planning to reverse it.
Have a question that wasn’t covered here? Our advisors at FINNO. offer free, no-obligation consultations — no hard sell, just honest answers about what’s right for your situation.