Bank Negara Malaysia (BNM) will announce further details on interim measures to address the rise in health insurance premiums this week, which is the subject of much contention by the public.
Finance Minister II Mr Amir Hamzah Azizan said this during a debate on the Supply Bill (Budget) 2025 for his ministry, reported the Bernama News Agency.
Separately, Communications Minister Fahmi Fadzil said that Prime Minister Anwar Ibrahim told the Cabinet at a meeting on 13 December that the central bank needs a little more time before making an announcement. He also that it would not be too long before BNM makes an announcement on the issue.
Mr Amir Hamzah emphasised that the participation of all stakeholders is essential for tackling this issue. This involvement should be guided by a whole-of-nation approach and include the responsibilities of the Ministry of Health (MOH), Ministry of Finance (MOF), Bank Negara Malaysia (BNM), as well as collaboration with stakeholders such as insurance and takaful operators (ITOs), private hospitals, medical experts, pharmaceutical companies, and consumer associations.
Mr Amir Hamzah said BNM will ensure that the increase in insurance premiums is implemented in an orderly and gradual manner, along with other assistance for certain groups. "BNM will continue to explore measures that can improve the design of medical and health insurance and takaful (MHIT) products with more sustainable premiums and encourage prudent usage.
"The central bank also expects the ITO to expand options for affected users, including more flexible premium payment plans and protection plans with more sustainable premiums." ‘’
He added that the MOH is also implementing several measures and exploring long-term solutions to address the inflation of medical costs in Malaysia.
Proposals forwarded
A Parliamentary Special Select Committee on Health has made six suggestions for the government to address the increasing prices of insurance and takaful premiums. Its chairman Suhaizan Kaiat said it suggested co-payment options to control the prices of health services, and the application of diagnosis-related groups.
Universiti Kebangsaan Malaysia public health medicine specialist Prof Dr Sharifa Ezat Wan Puteh said a national health insurance scheme could operate on monthly salary deductions, much like the Employees Provident Fund.
She said, “Low-income groups could be subsidised while middle and higher income groups contribute a larger but affordable amount to it. High income earners may opt for supplementary private insurance. Such a system would integrate social responsibility with tax based funding and employer contributions.”
She said the increasing cost of private healthcare providers limits accessibility for many, resulting in overcrowding in public facilities. “This is another reason the government should implement a national health insurance scheme as it would reduce waiting times and improve access to healthcare."
Distribution of premium hikes
About six in 10 (61%) of revised medical and health insurance and takaful (MHIT) policies were affected by premium increases of up to 20% this year, said BNM and the Ministry of Finance (MOF) in a presentation. In addition, 30% of policies saw premium increases of 21-40%; 5% of policies saw premium hikes of 41-60%; while 4% of policies were hit by premium surges of above 60%.
Furthermore, the changes in MHIT premiums were still not commensurate with the high claims rate, according to the presentation. The slides showed that cumulative medical claims cost inflation was reported at 56% from 2021 to 2023, far exceeding the 20% growth in MHIT premiums. In that period, cumulative medical cost inflation was reported at 47%, lower than the 56% cumulative MHIT claims cost inflation. The ratio of claims hit 101-111% for the period of 2018 to 2023, excluding the COVID-19 pandemic years. In general, premiums are revised once every three years if MHIT claims continued rising.