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MORE than 90 percent of adjusted Medical and Health Insurance and Takaful (MHIT) policies have seen premium increases of less than 10 percent, with over 200,000 policyholders benefitting from deferred premium adjustments and more than 14,000 policies reactivated as of 30 April 2025, according to the Ministry of Finance (MoF).
In a written parliamentary reply published on the Dewan Rakyat portal, the MoF said interim measures have been introduced to reduce the financial burden on policyholders while ensuring continued access to MHIT coverage.
These include distributing premium adjustments over a minimum of three years, tailored adjustment schedules for policyholders aged 60 and above, and automatic policy reactivation without new underwriting.
“The challenge of addressing medical cost inflation is complex and requires a whole-of-nation approach,” said the ministry.
To that end, the government has launched the RESET initiative — a collaborative effort involving the MoF, the Ministry of Health, Bank Negara Malaysia (BNM), and other key stakeholders — aimed at curbing medical cost inflation and strengthening the private healthcare system in the medium and long term.
RESET is overseen by the Joint Ministerial Committee on Private Healthcare Costs (JBMKKS), chaired by Second Finance Minister Datuk Seri Amir Hamzah Azizan and Health Minister Datuk Seri Dr Dzulkefly Ahmad.
The ministry was responding to a query from Pang Hok Liong (PH–Labis), who asked why the government had been slow to act on increasingly unaffordable private medical insurance premiums, which have forced some individuals to cancel their policies.
In response to a separate question from Sim Tze Tzin (PH–Bayan Baru), the MoF also addressed concerns over the proposed introduction of a basic MHIT insurance product under the RESET strategy, and public unease about the use of Employees Provident Fund (EPF) contributions for insurance purchases.
The MoF explained that while the basic MHIT product is designed to widen access to affordable health protection, “the decision to purchase this basic product remains voluntary and entirely up to the individual.”
“Like other insurance and takaful products, policyholders may use any financial source available to them to pay MHIT premiums,” the ministry added.
It also clarified that funds from the EPF’s Akaun Sejahtera (formerly Account 2) may be used as one such option, in line with the account’s purpose of supporting pre-retirement needs such as housing, education, healthcare, and insurance protection.
“In other words, there is no compulsion for individuals to use Akaun Sejahtera to pay for basic MHIT premiums if they have or prefer to use other sources of funding,” said the ministry.
The conceptual framework for the basic MHIT product is expected to be finalised by December 2025, with implementation slated for late 2026. The structure and design of the product are still being developed.
“Currently, active engagement sessions with key stakeholders are ongoing to ensure the product structure aligns with affordability and long-term sustainability principles,” the ministry noted.
MHIT remains one of the cornerstone strategies under the RESET initiative, designed to tackle surging medical inflation — a key factor behind escalating insurance and takaful premiums that have eroded affordability for many Malaysians. - August 5, 2025
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