KUALA LUMPUR (May 5): Government backbencher and Bayan Baru MP Sim Tze Tzin has called on Bank Negara Malaysia (BNM) to reform how medical insurance premiums are priced, especially those based on age brackets. He said insurers use these brackets arbitrarily to justify steep increases, sometimes up to 50% in a year.

BNM has capped annual premium hikes at 10% for the next three years, but this limit doesn't apply when a policyholder moves into a new age group, like turning 60, leading to sharp price increases.

Sim added that insurers use different definitions for age brackets, causing inconsistent pricing. He warned this puts a heavy burden on retirees, who may be forced to either pay high premiums or cancel long-held policies.

“[The reform] does not cover price hikes resulting from policyholders moving into a new age band, which can cause premiums to jump by 40% to 50% in a single year,” Sim told reporters on the sidelines of the Dewan Rakyat’s special sitting on Monday.

Sim said insurance companies use different methods to define age brackets — some go by fixed age ranges like 61-65, while others use policy duration, such as the first five years.

He explained that seniors often face sharp premium increases when age bracket changes happen alongside general medical price hikes, causing financial strain, especially for retirees.

He also accused insurers of luring in younger customers with low premiums, then raising prices sharply as they get older, especially after age 60.

“Eventually, elderly policyholders are forced to make a cruel choice — either pay unaffordable premiums or surrender the policy they’ve held for decades.”

Sim referred to The Edge Malaysia’s May 5-11, 2025 report under Tong’s portfolio, titled “The steep rise of medical insurance premiums is not justifiable — time to protect middle-class Malaysians” — which argued that insurance premiums for middle-class Malaysians should not be so high.

He said the report highlighted questionable practices in the private healthcare insurance sector and urged BNM to address the concerns raised.

“BNM must look into the concerns raised in that report and take necessary action,” he stressed. “It's time for the insurance industry to prioritise fairness and humanity over profit margins.”

The issue of surging medical insurance premiums captured national attention in late 2024, when news emerged that some policyholders were hit with increases as high as 70%. The public backlash prompted a nationwide debate, with various industry players offering competing narratives.

BNM, the Association of Private Hospitals Malaysia and leading insurers each attributed the hikes to different causes — ranging from unregulated hospital charges and overtreatment to post-pandemic increases in medical claims and so-called “buffet syndrome” behaviour by policyholders.

Private hospitals highlighted that insurers were enjoying higher pre-tax profit margins of 17%-18%, compared to their own margins of 13%-14%. Insurers, meanwhile, argued that hospitals’ pricing practices had driven up claim costs, which in turn necessitated higher premiums.

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