BNM’s interim measures cap annual medical insurance premium increases at under 10% for at least 80% of policyholders, and spread any total repricing over a minimum of three years. This cap runs until the end of 2026. It is a bridge, not a permanent fix — the Base MHIT plan launching in early 2027 is intended to be the long-term solution.
What the 10% Cap Covers and What It Does Not
The cap applies specifically to premium increases caused by medical claims inflation repricing. This is the category of increase driven by rising hospital costs, higher utilisation rates, and the adjustment of under-priced pools by insurers.
What the cap does not cover:
- Age-band increases — when you move into a higher age group (for example, from the 55-59 band to the 60-64 band), your premium steps up by a pre-agreed actuarial amount. This is a scheduled increase disclosed in your original policy and is outside the scope of BNM’s interim measures
- Rider or add-on repricing — if you have added riders to your base medical plan, the cap applies to the medical plan component but may not govern rider-specific adjustments in the same way
- New policy applications — the interim measures govern existing policies undergoing repricing, not the pricing of new policies
The practical consequence is that many Malaysian policyholders receive renewals with two types of increase stacked on top of each other: an inflation repricing component (capped at under 10%) and an age-band step (not capped). Understanding this distinction matters if you are evaluating your renewal notice or trying to work out whether your insurer has complied with BNM’s requirements.
How the Three-Year Spread Works
If your medical insurance pool requires a total correction of, say, 30% to reflect the actual cost of claims in that pool, the insurer cannot apply all 30% in a single renewal. Under the interim measures, the adjustment must be spread over a minimum of three years. In practice, that looks like this:
- Year 1 (2024): approximately 10% increase applied
- Year 2 (2025): approximately 10% increase applied
- Year 3 (2026): approximately 10% increase applied
The 10% figure is a ceiling for 80% of policyholders, not a flat rate applied uniformly. Some policyholders in more severely under-priced pools — where the cumulative gap between collected premiums and actual claims paid is very large — may see increases above 10% in a given year. BNM allows up to 20% of policyholders in a pool to receive increases above this threshold. These are typically the cases where the historical pricing was furthest from actuarial reality and a steeper correction was unavoidable.
If your increase exceeded 10% in any year between 2024 and 2026, it is worth checking whether you fall within this 20% exception or whether your insurer has applied the repricing incorrectly. You can request an itemised breakdown of your premium change from your insurer.
What Happens After 2026
The interim measures are explicitly a transitional arrangement. BNM has set end-2026 as the close of this specific transitional period. The permanent affordability mechanism intended to replace it is the Base MHIT — a standardised, portable medical insurance product that all participating insurers will offer, designed to be sustainable and meaningfully priced for ordinary Malaysians.
The Base MHIT is expected to launch in early 2027. Once it is available, policyholders — particularly those on older, under-priced plans that have been subject to steep repricing cycles — will have the option to transition to the new product.
BNM has not formally stated what happens if the Base MHIT launch is delayed or if the transition takes longer than expected. The policy intent is clear: premiums should not spike uncontrollably once the interim measures end. But the mechanism for enforcing that intent beyond 2026 depends on the Base MHIT being available and functional as a genuine market alternative.
If you are currently in a repricing cycle and your final step-up falls in 2026, the Base MHIT launch will be relevant to your renewal planning in 2027. This is worth discussing with your agent before the end of 2026, not in the weeks before your next anniversary.
What to Do Before the Cap Expires
Understanding the 10% cap is useful. Acting on it is more useful. Here are the practical steps worth taking now:
- Review your current plan and premium trajectory — if your pool is still mid-correction, you should have one or two more capped increases before end-2026. Knowing how many remain helps you plan
- Request an itemised premium breakdown from your insurer — this separates the inflation repricing component (subject to the cap) from the age-band component (not subject to the cap), so you know exactly what you are paying and why
- Understand your co-payment options and deductible plans — adding a deductible to your policy can reduce your base premium significantly, which may offset future repricing increases
- Watch the Base MHIT announcement timeline — if your policy anniversary falls in early-to-mid 2027, you may be one of the first policyholders to have a clear choice between your existing plan and the new standardised product
An annual policy review is the most efficient way to stay on top of these changes without having to track every BNM circular yourself.
Frequently Asked Questions
Does the 10% cap apply to my entire premium bill or just the repricing portion?
Only the repricing portion — the component of your premium increase that is attributed to medical claims inflation. Age-band increases, which happen when you move to a higher age group on the premium schedule, are outside the scope of the cap. You can receive a renewal notice where the inflation component is capped at under 10% and still see a total increase above 10% if an age-band step also occurred that year.
My increase was 18% — has my insurer broken BNM’s rules?
Not necessarily. The 10% cap applies to at least 80% of policyholders in a pool. Up to 20% of policyholders in a severely under-priced pool may receive increases above 10% where a steeper correction is needed. If you want to verify whether your increase is compliant, request an itemised breakdown from your insurer showing the inflation repricing component and whether you fall within the 20% exception. If you are not satisfied with the explanation, escalate to BNMLINK at 1-300-88-5465.
When exactly do the interim measures end?
BNM’s interim measures are in place until the end of 2026. The Base MHIT plan, intended as the permanent replacement mechanism, is expected to launch in early 2027.
Can my insurer apply a large catch-up increase in 2027 once the cap lifts?
The Base MHIT is intended to prevent exactly this scenario by providing a standardised, sustainably priced alternative. However, for policyholders who remain on older plans and do not transition to the Base MHIT, the post-2026 pricing environment is not yet fully defined. This is a key reason to review your plan options before end-2026 rather than waiting.
Is the 10% cap different from the three-year spread?
Yes, they are two separate but related requirements. The three-year spread means the total correction must be applied over at least three annual renewals — not in one go. The 10% cap means that in any given year of that spread, at least 80% of policyholders in the pool must see an increase under 10%. Both conditions must be met together.
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