BNM, Stakeholders To Expedite Long-term Solution To Tackle Rising Medical Cost

KUALA LUMPUR, March 11 (Bernama) -- Bank Negara Malaysia (BNM) and relevant stakeholders are working together to expedite the implementation of a long-term solution to effectively control medical cost inflation, said Finance Minister II Datuk Seri Amir Hamzah Azizan.

He said the stakeholders include the Health Ministry (MOH), the Finance Ministry, private hospitals as well as insurance and takaful operators (ITOs).

Previously, the central bank had announced temporary measures to mitigate the impact of rising medical and health insurance and takaful (MHIT) premiums and contributions on policyholders.

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Under these measures, 80 per cent of policyholders are expected to see annual premium or contribution adjustments of less than 10 per cent due to medical claims inflation.

"A significant portion of the costs associated with these interim measures is borne by ITOs using their accumulated profits and reserves.

"Based on initial estimates, the impact on industry profits from these measures is expected to be RM2.6 billion over the next two years," he said when winding up the debate on the Royal Address in the Dewan Negara today.

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According to Amir Hamzah, the continuous rise in medical cost inflation is the primary driver of increasing MHIT claims.

"It is important to emphasise that these interim measures can only provide temporary relief for policyholders. The core issue remains the rising inflation of medical costs," he said.

Therefore, he stressed that the government, through the MOH, is prioritising comprehensive healthcare reforms to address medical cost inflation and private hospital charges.

These efforts will include the implementation of a payment model based on the Diagnostic Related Group (DRG), reforms in MHIT product design, expanding access to affordable healthcare options, and introducing electronic health records, he added.

-- BERNAMA