The national insurance regulator has announced proposals to curb the "loyalty surcharge" paid by long-term holders of private medical insurance plans.
The country's major healthcare insurers are bracing for unprecedented regulatory intervention following years of rising premiums and disappointing rates of consumer switching.
A patient advocacy group welcomed the regulator's stance, arguing that the market is "systematically exploiting" those who do not actively shop around. Average auto-renewed premiums have risen by 35% over the past four years, leaving approximately 3.5 million policyholders, especially elderly individuals and those with pre-existing conditions, paying premium rates for basic healthcare coverage.
However, some industry analysts have warned that strict price caps could deter private investment in cutting-edge medical technologies and private clinic facilities, potentially harming patients in the long run.
With reference to Extract D, explain two likely reasons why many health insurance policyholders have not switched to providers offering lower premiums.
