Interim Measures for Medical & Health Insurance Repricing for Impacted Policyholders

In light with the announcement on 20 December 2024 by Bank Negara Malaysia (BNM) and subsequent joint announcement by the insurance and takaful associations

Regarding interim measures for medical and health insurance (MHIT) repricing, Persatuan Insurans Am Malaysia (PIAM) assures you that our member companies are fully committed to supporting policyholders during this period. These interim measures aim to ease the financial burden on policyholders while ensuring continued access to quality healthcare.

Addressing Rising Healthcare Costs & Collaborative Efforts

Between 2021 and 2023, the insurance and takaful industry has experienced an unprecedented cumulative medical claims cost inflation of 56%. This rise compounded by post COVID-19 challenges, reflects a global trend that has placed significant pressure on insurers and takaful operators, to adjust premiums/contributions.

The introduction of MHIT products with co-payment feature as alternative options in September 2024 offers a long-term solution to help policyholders/participants manage their coverage costs. Co-payment plans aim to reduce premiums/contributions by encouraging shared responsibility in healthcare expenses and promoting more mindful usage of medical services.

The insurance and takaful industry is collaborating with Bank Negara Malaysia (BNM), the Ministry of Health (MOH), and the Association of Private Hospitals Malaysia (APHM) to develop sustainable strategies to address the financial impact of rising healthcare costs and medical claims. This includes setting up of a RM60 million fund by the Government, insurers, takaful operators and private hospitals to expedite broader health reforms in the Malaysian healthcare system. In addition, part of the fund will also be used to facilitate the development of a base MHIT product that covers essential healthcare needs and facilitate policyholders aged 60 years old and above to switch to the new base product, once available.

Supporting Policyholders During MHIT Repricing

For any inquiries or assistance regarding your MHIT policy, please contact your respective insurance company directly from 15 January 2025 onwards. You may refer here for the list of PIAM members companies and their contact information [here].

For more information, you may refer to the links below.

Here are the interim measures:

Any changes in premiums arising from medical claims inflation effected in 2024 until 2026 will be spread out

The changes in premiums will be spread out over a minimum of three years.
At least 80% of policyholders are expected to experience yearly premium adjustments due to medical claims inflation of less than 10%.

Temporary pause in premium adjustments due to medical claims inflation*

Temporary pause in premium adjustments for one year from their policy anniversary for policyholders aged 60 years old and above who are covered under the minimum plan within the MHIT product that they purchased.

* The interim measures above are not applicable to premium increases that may apply when a policyholder moves to a higher age band, which will be managed separately by the ITOs.

Reinstatement of policy

Policyholders who have surrendered or whose MHIT policies have lapsed in 2024 due to the repricing can request for a reinstatement of their policies based on the adjusted premium under this measure without additional underwriting requirements.

Alternative MHIT products

ITOs must provide appropriate alternative MHIT products for policyholders who do not wish to continue with their existing MHIT plans that have been repriced.
The alternative products are to be provided at the same or lower premiums without any additional underwriting or switching cost.
ITOs that do not currently offer such alternative products must make these products available to policyholders by the end of 2025.