Andrew Yap
|
September 17, 2025
Why does the medical insurance premium increase in Malaysia?
Medical insurance is an essential financial safety net for Malaysians, especially with rising healthcare costs. However, many policyholders notice that premiums tend to increase over time even if they haven’t made claims. This isn’t arbitrary; several factors drive the adjustments made by insurers. Understanding these reasons can help you plan better and appreciate the importance of maintaining coverage.
Below are the main reasons why medical insurance premiums continue to rise in Malaysia.
Medical inflation
Medical inflation in Malaysia is consistently higher than general inflation. Medical inflation often ranges between 8–15%.
This happens because healthcare costs rise across the board, including:
- Hospital supplies and services (lab tests, imaging, medications, consumables)
- Fees for specialist consultations, procedures, and surgeries
- Introduction of new treatments and therapies
- Costs of maintaining and upgrading hospital facilities and equipment
Increasing of claims due to increase in illness
Malaysia has one of the highest rates of diabetes and hypertension in the region. More people are also being diagnosed with heart disease, cancer, and other non-communicable diseases.
These conditions typically require:
- Lifelong medication (Claimable under most insurer: cancer and kidney)
- Recurring treatments
- Long-term treatments or hospital stays
Since there is an increase of both the frequency and cost of claims, insurers adjust premiums to manage the higher overall risk pool.
Ageing population
Malaysia is moving towards becoming an ageing society, with more citizens aged 60 and above each year. Older policyholders are more likely to:
- Require hospitalisation
- Experience complications from illnesses
- Have longer recovery times
This leads to higher and more frequent claims. As the insured population ages, premiums rise to balance these costs.
Advancements in medical technology & treatments
While medical innovations bring better outcomes for patients, they also come with higher price tags. New diagnostic tools, minimally invasive surgeries, advanced cancer therapies, and cutting-edge medical devices often cost significantly more than older methods.
Hospitals invest heavily in these technologies, and the expenses are passed down to patients and, ultimately, insurers. This contributes to the increase in medical insurance premiums.
Imported medical supplies & currency effects
Malaysia relies heavily on imported pharmaceuticals, medical devices, and consumables. When the Malaysian ringgit weakens against major currencies, the cost of these imports rises. Global supply chain disruptions and inflation in other countries also push prices upward.
This translates into higher treatment costs at local hospitals, which insurers factor into their premium adjustments.
Increased utilisation & post-pandemic backlog of care
After the COVID-19 pandemic, many Malaysians returned to hospitals for postponed check-ups, diagnostics, and elective surgeries. This surge in utilisation increased the volume of claims for insurers.
In addition, more people are now making use of their insurance benefits. As claims frequency and intensity rise, insurers adjust premiums to ensure sustainability.
Final thoughts
While premium increases can feel burdensome, they reflect the real cost of healthcare and ensure that insurers remain able to pay claims when you need them most.
At the same time, Bank Negara Malaysia (BNM) has introduced interim measures to promote affordability and protect consumers, especially in the face of rising medical costs. These initiatives aim to improve transparency, encourage sustainable pricing, and ensure Malaysians continue to have access to essential healthcare coverage.
By staying informed about both industry trends and regulatory measures, you can make smarter decisions when reviewing your insurance plans.
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