The continuous rise in medical inflation has led to increased claims rates for medical and health insurance and takaful (MHIT). Bank Negara Malaysia (BNM) has taken several interim measures to mitigate the impact of rising premiums on policyholders.
The continuous rise in medical inflation has prompted a surge in claims rates for medical and health insurance and takaful (MHIT), according to Deputy Finance Minister Datuk Seri Amir Hamzah Azizan. To mitigate the impact of escalating MHIT premiums on policyholders, Bank Negara Malaysia (BNM) has implemented several interim measures that came into effect on January 15th.
These measures encompass the distribution of premium adjustments stemming from medical claim inflation over a minimum period of three years until the end of 2026. Additionally, a one-year deferral of premium adjustments due to medical claims inflation is granted to policyholders aged 60 and above who are enrolled in the minimum plan for MHIT products purchased. Policyholders whose policies expired in 2024 due to premium reset can contact their respective life insurers and family takaful operators (ITO) to request reactivation based on adjusted premiums, said Amir Hamzah during a question and answer session in the Dewan Rakyat today.Amir Hamzah's response addressed a query from Lim Guan Eng (PH-Bagan) concerning the profits of life insurance companies since 2018 and the resolution of the dispute surrounding premium increases for medical insurance, which have risen by as much as 70 percent, as well as steps taken to prevent arbitrary hikes in private healthcare costs. Through these interim measures, it is anticipated that 80 percent of policyholders will experience annual premium adjustments of less than 10 percent attributable to medical claims inflation. Meanwhile, Amir Hamzah stated that the average annual profit of the insurance and takaful industry between 2018 and 2023 was RM4.4 billion from life insurers and family takaful operators (ITO). Simultaneously, he emphasized that the government, through the Health Ministry (MOH), will prioritize comprehensive health reforms to address the concerns of medical inflation and charges at private hospitals. This endeavor includes implementing the Diagnostic Related Group (DRG) payment model, enhancing transparency in drug costs, and comparing common medical costs. Additional measures that private hospitals can undertake to curb medical inflation are also under discussion as long-term solutions
Medical Inflation MHIT Premiums Bank Negara Malaysia Interim Measures Health Reforms
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