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MEDIA STATEMENT

Kuala Lumpur, 15 October 2025 — The Galen Centre for Health & Social Policy today called for the establishment of an independent statutory Private Healthcare Commission to protect Malaysian consumers by regulating private hospital charges and private medical and health insurance/takaful (MHIT) products.

This renewed call comes amidst shocking findings from a CodeBlue survey of private specialists about health insurance issues faced by their patients. These were published in recent articles: “Poll: Nearly All Specialists Perceive Insurer Interference With Clinical Decisions” and “‘Deny, Delay, Revoke’: Specialists Reveal Health Insurance Underbelly In Malaysia“.

“Malaysians are being squeezed between unregulated hospital bills, repricing and unreasonable application of private health insurance. We need a single, independent regulator with a clear consumer protection mandate to bring transparency, fairness and discipline to the private healthcare market,” said Azrul Mohd Khalib, Chief Executive of the Galen Centre. “This Commission must be empowered to review, approve, cap or roll back unjustified increases in hospital charges and premiums, and to shine a light on opaque billing practices and prevent victimisation of consumers.”

“Last December, Bank Negara announced interim measures for insurers and takaful operators (ITOs) intended to cap yearly health insurance premium adjustments to less than 10 percent for 3 years, and protection of policyholders aged 60 years old and above through reinstatement of terminated policies after repricing and not requiring additional underwriting.”

“Unfortunately, after almost a year of observing the insurance and takaful sector’s level of adherence and compliance, I now question the effectiveness of these interim measures. Many ITOs appear to not be in compliance with the 10% cap and protection for those above 60,” Azrul remarked.

“Despite denials by ITOs, their own agents report increasingly more people terminating their policies, priced out of affordability, and being unable to access the promised financial protections and reimbursements under their insurance or takaful plans. The interim measures were supposed to have provided relief and a reprieve for many people who were trying to decide whether or not to continue with their individual or family insurance or takaful policies, especially if they are older. As health insurance becomes less affordable and accessible, more people are likely to become uninsured.”

 

What the Private Healthcare Commission should do

The Galen Centre proposes that Parliament enact new legislation (if the Private Healthcare Facilities and Services Act 1998 cannot be adequately amended) to create a Commission with powers to:

  • Regulate hospital charges beyond consultant and procedure fees, including integrating diagnosis-related group (DRG) to regulate consumables, devices, diagnostic tests, facility and ancillary charges; require standardised, itemised billing and price transparency; and investigate overcharging and fraud.
  • Review and decide on proposed premium rate increases and caps by insurers and takaful operators; where increases are unjustified, excessive or unfairly discriminatory, require revision and public disclosure of findings. Introduce yearly caps for deductibles and co-payments.
  • Harmonise regulation of private health insurance and takaful, with hospital pricing, including transferring part of insurance/takaful oversight from Bank Negara Malaysia (BNM) to the new Commission so that premiums, benefits, and provider charges are overseen under one roof with a consumer-protection mandate.
  • Publish an annual Private Healthcare Affordability Report tracking trends in medical inflation, premiums, out-of-pocket (OOP) spending, and provider charges by category, and recommend corrective actions to Parliament and the Government.

 

Why this is urgent

Premium repricing and hospital charges do not happen in a vacuum. Between 60%-70% of a typical private hospital bill (consumables, devices, diagnostics, facility fees, linen, etc.) is largely unregulated, encouraging inflationary billing and ultimately driving up premiums.

Consumers, especially older Malaysians, are cancelling coverage after facing steep premium hikes, selective application of their policies, risking catastrophic OOP costs and shifting burdens to the public system. Temporary caps help, but without regulating hospital charges and insurance premiums, the underlying inflation pressure persists. These individuals will be forced to the government health services, further increasing the burden, stress and pushing the capacity and ability to the breaking point.

“Health insurance is an insurance product which covers whole or in part the medical and surgical expenses of an insured individual which are incurred due to illness, injury or disability. The main reason for taking health insurance is to protect individuals from the high costs of healthcare. It acts as a safety net and a safeguard against catastrophic health expenditures. In return, monthly premiums are paid.”

“By pricing premiums out of affordability, imposing unreasonable co-payments and deductibles, and using tactics to limit, restrict and dodge payment and control treatment, policy holders could face large out-of-pocket payments beyond their means in the case of a major illness. They may not afford insurance and takaful altogether. Ironically, it could create the very situation which individuals expect to be protected from by having health insurance,” Azrul emphasised.

 

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