KUALA LUMPUR, Aug 4 (Bernama) — More than 90 per cent of adjusted medical and health insurance and takaful (MHIT) policies recorded premium increases of less than 10 per cent, while over 200,000 policies benefited from deferred premium adjustments and more than 14,000 policies were reactivated as at 30 April 2025, according to the Ministry of Finance (MoF).
In a written reply published on the Dewan Rakyat portal, the MoF said interim measures had been introduced to cushion the financial impact on policyholders and ensure continued MHIT coverage.
These interim measures include spreading premium adjustments over at least three years, applying phased increases for policyholders aged 60 and above, and reactivating all policies without requiring re-underwriting.
“Tackling medical cost inflation is a complex challenge that requires a whole-of-nation approach,” the MoF said.
In response, the government has introduced the RESET initiative — a collaborative effort involving the Ministry of Finance, Ministry of Health, Bank Negara Malaysia and key stakeholders — to contain rising healthcare costs and strengthen the private healthcare system in the medium and long term.
The implementation of RESET is monitored by the Joint Ministerial Committee on Private Healthcare Costs, co-chaired by Finance Minister II Datuk Seri Amir Hamzah Azizan and Health Minister Datuk Seri Dr Dzulkefly Ahmad.
The MoF was responding to Pang Hok Liong (PH-Labis), who asked why the government had been slow in addressing steep insurance premium hikes, particularly in private medical coverage, which has become increasingly unaffordable, forcing some individuals to cancel their policies.
In a separate response to Sim Tze Tzin (PH-Bayan Baru), who requested comprehensive details on the government’s plan to introduce a basic insurance-based MHIT product under the RESET strategy, as well as concerns over the use of Employees Provident Fund (EPF) contributions to purchase such coverage, the MoF clarified that the product aims to improve accessibility.
“However, the decision to purchase this product remains voluntary and entirely at the discretion of individuals,” the MoF said.
Like other insurance and takaful products, policyholders may pay MHIT basic premiums using any financial source available to them.
The MoF added that funds from the EPF’s Sejahtera Account (formerly Account 2) may also be used as one of the available financing sources for MHIT coverage.
“This aligns with the purpose of the Sejahtera Account, which allows EPF members to make withdrawals for pre-retirement lifecycle needs such as housing, education, healthcare, and insurance or takaful protection.
“In other words, there is no compulsion for individuals to use their Sejahtera Account to pay MHIT premiums if they have or prefer to use alternative sources,” it said.
The conceptual development of the basic MHIT product is targeted for completion by December 2025, with implementation planned by end-2026. However, the structure and design of the product are still being finalised.
“Stakeholder engagement sessions are actively ongoing to ensure all feedback is taken into account and aligned with the principles of affordability and long-term sustainability of the basic MHIT product,” the MoF added.
MHIT is a key component of the RESET initiative, designed to address rising medical inflation — a major contributor to higher insurance and takaful premiums that continue to strain policyholder affordability.
— BERNAMA
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