Kuala lumpur: 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 of 30 April 2025, according to the Ministry of Finance (MoF).
According to BERNAMA News Agency, the MoF’s written reply published on the Dewan Rakyat portal highlighted interim measures introduced to mitigate the financial impact on policyholders and ensure the continuity of MHIT coverage. These 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.
The MoF emphasized the complexity of tackling medical cost inflation, which necessitates a whole-of-nation approach. In response, the government has launched the RESET initiative-a collaborative effort involving the Ministry of Finance, Ministry of Health, Bank Negara Malaysia, and key stakeholders-to manage rising healthcare costs and strengthen the private healthcare system over the medium and long term.
The implementation of RESET is overseen 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.
This response came after queries from Pang Hok Liong (PH-Labis), who questioned the government’s slow response to steep insurance premium hikes, particularly in private medical coverage, which have become increasingly unaffordable, leading some individuals to cancel their policies.
In a separate response to Sim Tze Tzin (PH-Bayan Baru), who sought comprehensive details on the government’s plan to introduce a basic insurance-based MHIT product under the RESET strategy, and concerns over the use of Employees Provident Fund (EPF) contributions for such coverage, the MoF clarified that the product aims to improve accessibility. The decision to purchase this product remains voluntary and at the discretion of individuals.
Policyholders may pay MHIT basic premiums using any available financial sources, and funds from the EPF’s Sejahtera Account (formerly Account 2) may also be used for MHIT coverage. This aligns with the Sejahtera Account’s purpose, allowing EPF members to make withdrawals for pre-retirement lifecycle needs such as housing, education, healthcare, and insurance or takaful protection. The MoF emphasized that there is no compulsion for individuals to use their Sejahtera Account to pay MHIT premiums if they have or prefer to use alternative sources.
The conceptual development of the basic MHIT product is targeted for completion by December 2025, with implementation planned by the end of 2026. However, the structure and design of the product are still being finalized. Stakeholder engagement sessions are actively ongoing to ensure feedback is considered and aligned with the principles of affordability and long-term sustainability of the basic MHIT product.
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.