Learning & Development Asia 2024
ITOs in Malaysia required to offer co-payment features for MHIT products effective 1 September 2024

ITOs in Malaysia required to offer co-payment features for MHIT products effective 1 September 2024

With the option of co-payment, consumers can avail themselves to lower-cost MHIT products based on their financial circumstances and needs.

In light of Malaysia's medical cost inflation of 12.6% in 2023, significantly higher than the global average of 5.6%,⁠ Bank Negara Malaysia (BNM) has clarified recent commentaries and outlined new measures aimed at making medical and health insurance and takaful (MHIT) products more sustainable and affordable.

With effect from 1 September 2024, insurers and takaful operators (ITOs) must offer consumers the option to purchase MHIT products with a co-payment feature. 

This new requirement is part of a broader strategy to manage escalating healthcare costs and provide lower-cost insurance options tailored to individual financial circumstances and needs.

Consumers who already have MHIT products without co-payment features can continue with their current plans upon renewal, and ITOs can still offer non-co-payment products to new customers. 

However, MHIT products with co-payment features have premiums/contributions that are 19% to 68% lower than similar products without co-payment features. The exact savings is dependent on the level of co-payment.

BNM's policy will also include several consumer protections:

  • Co-payments will not apply for the following circumstances: 
  1. ⁠Emergency treatment, including in accident cases;
  2. Outpatient treatment for follow-up treatments arising from critical illnesses such as cancer or kidney dialysis, and
  3. Treatment sought at a government healthcare facility.
  • ITOs are expected to consider financial hardships or extenuating circumstances and may waive co-payments in such cases.

This initiative is part of a broader effort to address medical cost inflation in Malaysia, which includes enhancing the transparency of medical costs and transforming health service delivery, BNM said.

The central bank added that by offering co-payment options and implementing these new measures, it aims to create a more affordable and sustainable health insurance landscape while ensuring that consumers are protected and kept informed.

READ MORE: Bank Negara Malaysia calls for greater diversity & inclusion for women in the insurance industry

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