The government is collaborating with key stakeholders to implement long-term strategies to address the escalating costs of healthcare. Minister of Finance II, Datuk Seri Amir Hamzah Azizan, stated that Bank Negara Malaysia (BNM), the Ministry of Health, the Ministry of Finance, private hospitals, and Insurers and Takaful Operators (ITO), are all actively working together to implement sustainable long-term measures aimed at stabilising medical expenses.

He underscored the importance of collective action in the healthcare sector to ensure that medical and takaful health insurance (MHIT) premiums remain affordable over time. In pursuit of this goal, BNM and its partners are developing strategies to effectively curb medical cost inflation and safeguard policyholders from excessive financial burdens.

Deputy Prime Minister Datuk Seri Ahmad Zahid Hamidi previously outlined several initiatives introduced by the National Cost of Living Action Council (Naccol) Executive Committee to mitigate rising MHIT premiums. These initiatives include distributing premium adjustments over a longer period, deferring increases, reinstating lapsed policies, and expanding insurance options to provide greater flexibility for policyholders.

In December, BNM announced that insurance providers had agreed to limit the annual increase in MHIT premiums to under 10% by spreading adjustments over a minimum of three years. This temporary measure, in effect until the end of 2026, is expected to benefit at least 80 per cent of policyholders by ensuring their premium hikes remain in line with medical claims inflation. Policyholders who faced increases of between 40 and 70% were encouraged to contact their insurers for assistance under this scheme, while those who cancelled their policies in 2024 due to cost concerns were given the option to reinstate their coverage.

Amir Hamzah revealed that the financial burden of these interim measures would primarily be shouldered by ITOs, drawing from their accumulated reserves and profits. Preliminary estimates suggest that these interventions could reduce industry earnings by approximately RM2.6 billion over the next two years. However, he emphasised that while these short-term solutions offer temporary relief, they do not resolve the root cause of the issue—persistently rising medical costs. The continuous increase in healthcare expenses remains the main driver behind higher insurance premiums, placing pressure on both policyholders and insurers.

To tackle this challenge, the government is prioritising extensive healthcare reforms through the Health Ministry. These reforms will focus on regulating private hospital charges, improving cost efficiency, and addressing systemic inflation in medical expenses, with the aim of ensuring long-term sustainability in the healthcare sector.

(Source: NST) 

• TAGS:
• Amir Hamzah Azizan
• Bank Negara Malaysia
• Datuk Seri Ahmad Zahid Hamidi
• Insurance
• medical and takaful health insurance
• Medical Insurance
• Medical Insurance Premiums
• MHIT Premiums
• Ministry of Health
• National Cost of Living Action Council