PAC proposes 17 measures to curb rising healthcare, insurance costs

 

The Public Accounts Committee has put forward 17 recommendations to the government, particularly the Finance Ministry, Bank Negara, and the Health Ministry, to address rising health insurance premiums and escalating private hospital charges.

PAC chairperson Mas Ermieyati Samsudin said the recommendations were tabled in a statement in the Dewan Rakyat today amid growing public concern over healthcare affordability and Malaysians’ ability to maintain their insurance coverage.

Among the proposals is the establishment of an independent governance framework for the private healthcare sector, aimed at protecting consumers through oversight of insurance pricing and benefits.

Mas Ermieyati said PAC also urged the Health Ministry to collaborate with the Domestic Trade and Cost of Living Ministry to develop a price control mechanism for medicines and medical equipment to ensure costs remain reasonable and prevent excessive profiteering.

“The Health Ministry should explore sourcing supplies directly from manufacturers (and) prioritising local producers to reduce dependence on the dominance of suppliers or certain cartels,” she said in a statement today.

The committee further recommended that the Health Ministry expedite the implementation of the Diagnosis Related Group (DRG) system in the private healthcare sector and accelerate amendments to the Private Healthcare Facilities and Services Act 1998 (Act 586), enabling the ministry to regulate hospital charges beyond doctors’ consultation fees.

“The Health Ministry needs to empower and pursue initiatives that widen access to affordable medical care, and at the same time act as a pricing benchmark for the private healthcare sector,” she said.

Mas Ermieyati added that the Health Ministry and Bank Negara should enhance existing complaint and dispute resolution mechanisms relating to insurance and healthcare costs to ensure grievances are resolved more efficiently.

PAC also recommended that Bank Negara issue clearer and more standardised operational guidelines, including FAQs, to prevent insurers from exploiting ambiguities in the government’s interim measures.

“To ensure the effectiveness of government interventions, Bank Negara must impose strict punitive action against any insurer found to be manipulating interpretations or failing to comply with interim measures, thereby affecting the welfare and interests of policyholders,” she said.

The committee also called on the central bank to encourage insurers and takaful operators to adopt incremental annual repricing, allowing for smaller and more predictable premium adjustments instead of steep increases.

Annual premium adjustments

Separately, PAC proposed that the Competition Commission provide guidance on discount negotiations between hospitals and insurers to ensure the process remains fair and does not compromise patients’ access to treatment.

“To minimise financial shocks for consumers, PAC has suggested that the insurance and takaful industry shift towards incremental and stable annual premium adjustments, as well as reassess group-based premium pricing to ensure greater fairness and sustainability,” she said.

The committee further stressed the need for the government to establish a clear and realistic implementation timeline for all measures under the Reset (Regulatory Enhancement for Sustainable and Efficient Takaful/Insurance) initiative, alongside structured preparations to ensure sustainable outcomes.

Mas Ermieyati said the recommendations followed public hearings in Penang and Kuala Lumpur on Feb 14 and 21 last year, as well as 19 proceedings conducted between Feb 24 and Aug 14, 2025. The PAC statement was subsequently finalised over four days.

A total of 21 witnesses gave evidence, including officials from the Finance Ministry, Health Ministry, and Bank Negara, representatives from the Association of Private Hospitals, NGOs, academics, and stakeholders from the insurance and takaful industries.

- Bernama