PETALING JAYA: Malaysia’s average household spending on health insurance has gone up nearly four-fold in just two years, reflecting the extent of rising healthcare costs in the country.
According to the Department of Statistics Malaysia’s (DOSM) Household Expenditure Survey Report 2024 that was released on Oct 8, average monthly household expenditure on health-related insurance rose by 283% from RM24.13 in 2022 to RM92.46 in 2024.
Economists say the sharp rise in average spending for medical-related insurance is due to several reasons, from rising medical costs and higher premiums to greater health awareness among Malaysians.
HELP University economics expert Prof Dr Chung Tin Fah said the trend shows that more households are becoming health-conscious and increasingly risk-averse, opting for multiple types of coverage such as health, life, motor, and home insurance.
“People want protection against illness and unforeseen circumstances. Rising premiums have also contributed to higher household expenditure on insurance,” he said.
He added that the growing demand for private health insurance is partly driven by long waiting times at government hospitals.
“In the past, many relied on government healthcare and assurances that the rakyat would be protected by the state.
“However, more are now turning to private insurance for quicker access to medical services,” he said.
DOSM’s data also showed that average monthly spending on health insurance in rural areas shot up nearly sixfold, from RM3.74 in 2022 to RM18.28 to 2024.
In urban areas, the average monthly spending nearly quadrupled, from a monthly average of RM30.29 to RM114.41.
Selangor recorded the steepest increase, with average spending climbing from RM34.51 to RM254.03, followed by Penang, which more than tripled from RM57.45 to RM169.18.
Sabah and Sarawak also saw notable increases, rising from a low base – Sabah from RM3.83 to RM44.44, and Sarawak from RM2.63 to RM10.73.
In contrast, states such as Kelantan (RM6.57) and Terengganu (RM22.97) posted the lowest average monthly average health insurance spending in 2024.
Prof Chung said health has become one of the top household priorities alongside housing, education, and food.
Economist Prof Geoffrey Williams said insurers have justified the increase in premiums by citing higher treatment costs, medical inflation, and a surge in claims, after years of relatively flat rates.
He noted that there have also been complaints of overprescription of medicine and unnecessary charges by private healthcare providers.
Prof Williams also noted that some private hospitals continue to use branded medicines instead of cheaper generic alternatives, further inflating treatment fees and insurance payouts.
