Malaysian member of parliament Sim Tze Tzin has asked Bank Negara to reform the country's medical insurance premium pricing system. He said the regulator should specially look at why a policyholder's health insurance premium rises sharply when the person moves from one age-bracket to another, even though the person becomes just a day older.
He said this imposes undue financial burden on citizens, especially senior citizens. Mr Tzin said while Bank Negara Malaysia’s interim measures cap increases at 10%, such safeguards do not apply to hikes resulting from age bracket changes.
In a recent statement he said, “Insurance companies offer affordable plans to customers when they are young, then drastically increase the premiums once they are 60 years old and above, justifying them with the ‘age bracket changes’.”
He said presently the system penalises the senior citizens by steep premium increases at a time when they no longer have a stable income and are surviving on their savings.
He said, “Logically too it is not justified as the policyholders only become one day older after their birthday, and their insurance premiums immediately spike by 40% to 50% just because they have moved to the next age bracket. This makes no sense.”
He said senior citizens must be protected and not victimised and the insurance industry should ensure fairness and humanity, not just profits.
Mr Tzin had launched a public channel for complaints on healthcare costs and has been spearheading involvement of various stakeholders to ensure that policyholders get a transparent and fair deal from health insurers.
Health insurance premiums in Malaysia have risen by as much as 30%-50% despite a cap of 10% by Bank Negara.
Bank Negara in its directive issued on 20 December 2024 had capped the annual premium increases at 10% for most policyholders in response to public outrage over steep health insurance premium hikes, with some exceeding over 200%. The directive had also mandated the insurers and takaful operators to spread out the health insurance premium hikes over three years.
The regulator had also directed a one-year premium freeze for policyholders /certificate holders aged 60 and above on minimum medical and health insurance/takaful plans.