KUALA LUMPUR (Dec 20): The Galen Centre for Health and Social Policy says urgent reforms are needed to address the root causes of healthcare inflation in Malaysia.

While it welcomed the interim measures that Bank Negara Malaysia (BNM) just announced to address the burden of rising medical insurance premiums on policyholders, it cautioned that the measures provide only temporary relief.

“This is a temporary measure and it is not intended to be a permanent solution to the problem of healthcare inflation in Malaysia,” said Azrul Mohd Khalib, chief executive of the Galen Centre, in a statement on Friday.

“Unfortunately, it is the equivalent of kicking the can down the road for three years. The problem of double-digit healthcare inflation continues to exist and grow,” said Azrul.

The independent public policy research organisation warned that there would be potential drastic premium hikes after the interim period, given healthcare inflation is projected to rise to 15% in 2025.

Azrul said unregulated private hospital charges are a key factor driving healthcare costs, noting that more than 60% of a hospital bill — excluding consultant fees and medicines — is unregulated.

“These health insurance premium increases do not happen in a vacuum,” Azrul stressed, calling for immediate regulation of hospital charges.

The Galen Centre urged the establishment of an independent "Private Healthcare Commission" to regulate private healthcare charges, similar to the Malaysia Competition Commission (MyCC).

Such a regulator, Azrul said, could review and publicly disclose fee increases and ensure they are justified, fair, and reasonable.

“To ensure the commission's effectiveness, relevance and harmonisation of policies, it might also be necessary to transfer the responsibility of regulating health insurance and takaful from BNM to this commission,” he added.

The Galen Centre also highlighted the importance of responsible medical insurance usage to ease pressure on premiums.

On that note, it reiterated its support for the co-payment approach, specifically within the context of adopting a national health insurance model.

"Co-payment in healthcare is important as it ensures the sustainability of the healthcare system," it said.

Earlier on Friday, BNM announced several interim measures to address the burden of rising medical insurance premiums on policyholders.

These measures include spreading out premium increases over the next three years, effective until the end of 2026, and pausing certain premium adjustments for individuals aged 60 and above.

In addition, the central bank said policies that lapsed in 2024 due to premium revisions will be reinstated without additional underwriting requirements.

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