Bank Negara Malaysia (BNM) has responded to concerns regarding the planned repricing of medical and health insurance and takaful (MHIT) products, with reports indicating potential premium increases of 40% to 70% for some policyholders.
The central bank said that it would ensure continued public access to affordable and suitable coverage while urging insurers and takaful operators (ITOs) to adopt more equitable pricing strategies.
In its latest announcement, BNM instructed ITOs to explicitly consider the financial impact on policyholders and takaful participants when reviewing their repricing strategies.
Operators are required to manage premium and contribution increases gradually and provide meaningful options for those significantly affected by the expected changes.
BNM stated that further details about these measures are expected to be released soon.
The insurance and takaful industry has similarly committed to staggered premium hikes and flexible payment plans to ease the financial burden on policyholders.
The rise in healthcare costs, driven by medical inflation and increased utilization of services, continues to challenge the affordability of coverage.
BNM has called for coordinated reforms among stakeholders, including ITOs, the Ministry of Health, private hospitals, and consumer groups, to address these challenges and maintain public access to MHIT protection.
This collaboration is seen as critical to addressing the root causes of rising healthcare costs and ensuring the sustainability of coverage.
BNM’s ongoing efforts to ensure affordability
In earlier directives issued in July 2024, ITOs were mandated to publish justifications for premium adjustments on their websites and notify policyholders well in advance of changes.
This directive was part of BNM’s broader efforts to ensure transparency and accountability in the repricing process.
The introduction of copayment mechanisms, where policyholders bear part of medical expenses, is one of the measures being explored to manage escalating healthcare costs while balancing affordability.
However, to promote affordability and safeguard consumer interests, BNM prohibits co-payments under certain circumstances.
These include emergency treatment (including accidents), follow-up outpatient care for critical illnesses such as cancer or kidney dialysis, and treatments at government healthcare facilities.
In the same month, BNM released a policy document on the licensing and regulatory framework for Digital Insurers and Takaful Operators (DITOs).
This framework is designed to encourage innovation in digital insurance offerings and expand access to affordable coverage.
Featured image credit: Edited from Freepik
