Over 90pct of insurance premium adjustments under 10pct, says Finance Ministry
The ministry said that over 200,000 policies had benefited from deferred premium adjustments, while more than 14,000 lapsed policies were reinstated.
"The adjustment of Medical and Health Insurance and Takaful (MHIT) premium rates is symptomatic of the broader issue of medical cost inflation, which is the main contributing factor.
"This inflation is driven by factors such as the rise in non-communicable diseases, investment costs in cutting-edge medical technologies and the largely unchecked cost of providing and utilising healthcare services," he said.
It said this in a written reply to Pang Hok Liong, addressing concerns over the government's action on rising private medical insurance premiums, which many Malaysians can no longer afford, forcing some to cancel their policies.
The ministry attributed the spike in MHIT premiums in 2024 to a surge in claims following the Covid-19 pandemic, compounded by a delay in premium rate adjustments by insurance and takaful operators during the pandemic.
In a separate response to Sim Tze Tzin (PH–Bayan Baru), the ministry said stakeholder engagement is ongoing to consider all views on the development of a basic MHIT product under the Reset strategy, aimed at tackling medical cost inflation and expanding access to affordable coverage.
"While the basic MHIT product aims to enable more individuals to obtain affordable insurance coverage, the decision to purchase this product remains voluntary and subject to individual choice.
"As with other insurance and takaful products, policyholders may pay the basic MHIT premiums using any financial resources at their disposal," it said.
While contributors may use their Employees Provident Fund Sejahtera Account, previously known as Account 2 to pay for premiums, the ministry said there is no compulsion to do so.
It said the product's framework has yet to be finalised, with the concept expected to be completed by December and implementation targeted by end-2026.
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