Malaysia’s healthcare affordability is under the spotlight, with health insurance premiums rising dramatically — by as much as 70% in December 2024 alone. For millions of Malaysians, this sharp increase is not just a number; it’s a direct hit to their wallets.
According to data from Ekonomi Rakyat and Bank Negara Malaysia, insurance premiums increased between 40% to 70%, with healthcare inflation in 2024 hitting 15% — far above the Asia-Pacific average of 10%. These rising costs are largely affecting the middle-income group (M40), who now face a perfect storm of increasing insurance premiums, medical bills, and stagnant wages.
Why Are Premiums Rising So Fast?
One major contributor is the abuse of Guarantee Letters (GLs). Patients who use GLs for insurance-covered treatments are often charged significantly more than those who pay upfront and claim later.
For instance:
- Dengue patients with GLs were charged an average of RM4,978, compared to RM1,288 for those on a pay-and-claim basis — a shocking 286% difference.
- Pneumonia patients faced RM6,859 with GLs vs. RM2,654 without — a 158% increase.
This disparity drives up claim costs for insurers, leading to higher premiums across the board.
Hospitals Are Winning Big
While Malaysians bear the burden, private hospitals are seeing record profits. Between 2020 and 2024, their revenue doubled from RM16.5 billion to RM30.5 billion, with profits rising from RM400 million to RM3.9 billion. This suggests that a large part of the healthcare cost increase is feeding corporate bottom lines — not improving care quality or access.
Insurance Companies Still Profitable
Despite the narrative that insurers are struggling, the general insurance and takaful sector reported RM1.6 billion in underwriting profits in 2024. This means that even as healthcare claims rise, insurers are still managing to stay profitable.
What Can Malaysians Do?
- Review your policy: Understand what is actually covered and the limitations around overseas or GL usage.
- Stay proactive with health screenings: Early detection can avoid high-cost treatments later. Fincrew now offers corporate on-site health screening – reach out to learn more.
- Be financially literate: With premiums rising and healthcare inflation unchecked, planning is no longer optional.
