KUALA LUMPUR: The medical and health insurance/takaful (MHIT) product that the government is working on to curb soaring medical inflation will provide more transparency as well as financial protection on hospitalisation cost, says Datuk Seri Amir Hamzah Azizan.
“With the introduction of this basic product, both new and existing policyholders will have access to a more sustainable and reliable alternative, without the need to depend on temporary interim measures,” said the Finance Minister II.
Amir said this while winding up the committee stage debates on the Supply Bill 2026 in the Dewan Rakyat on Thursday (Nov 6).
"The basic MHIT product will provide financial protection against inpatient hospitalisation costs, with a higher level of transparency for all parties.
"It will also expand coverage to include selected outpatient treatments and post-discharge care.
"In addition, policyholders will continue to have access to an extensive hospital network, supported by better arrangements to address cost drivers in healthcare, thereby ensuring that premiums remain affordable for the public in the long term,” he added.
He said the product would be a standalone product and not one that is investment-linked.
“With regard to Investment-Linked Policies (ILPs), Bank Negara Malaysia (BNM) has implemented stricter regulations governing the administration of ILP businesses.
"For example, Insurance and Takaful Operators (ITOs) are required to disclose the sustainability of ILP policies to policyholders on an annual basis, including information on investment performance and the adequacy of current premium levels to maintain protection until the end of the policy term.
"Policyholders who have disputes may contact their respective ITOs or Bank Negara for assistance,” he explained.
He said however that the government acknowledged that ILPs were more complex and require careful risk consideration by policyholders.
"In addition, the status of medical plans sold as riders (additional benefits) attached to investment-linked policies is also being reviewed by Bank Negara,” he added.
ILP are generally designed with level premiums throughout the policy term.
Level premiums mean that the policyholder pays the same premium throughout their coverage period and this will not increase because of age.
However, level premiums can still change due to medical inflation.
A committee co-chaired by the Health and Finance ministries have been established to implement reforms to address rising medical inflation.
