Co-payment medical plans: BNM's 2024 requirement explained
Rising medical claims pushed BNM and insurers into interim measures on premium increases and co-payment. Here is what has changed and what is still proposed.
Medical and health insurance and takaful (MHIT) premiums in Malaysia have been rising faster than most policyholders expected, and the industry's response has moved through several stages since late 2024. If you hold a medical card, or are thinking about buying one, it helps to understand what co-payment actually means in a policy, and what the current interim measures do and do not fix.
What co-payment means on a policy
Co-payment is a defined term on a medical and health policy: a provision requiring the policyholder to bear the difference in room charges, and other eligible benefits, described in the contract if the rate charged by the hospital is higher than the policyholder's eligibility, usually somewhere between 10% and 20%. It is related to, but distinct from, a deductible or excess, where the policyholder simply pays a fixed amount of each claim before the insurer's share kicks in. Both are ways of sharing the cost of a claim between insurer and policyholder rather than the insurer bearing it in full.
Why this became a live issue
Rising healthcare costs have translated into repeated premium increases on medical cards, prompting concern from regulators, the industry and policyholders alike. In response, interim measures were introduced in December 2024 to keep MHIT products accessible and affordable while longer-term reforms are worked out. Under these measures, insurers agreed to spread out premium changes over a minimum of three years for affected policyholders, a measure that was set to remain in place until the end of 2026, with the expectation that at least 80% of policyholders would see yearly premium adjustments of less than 10% due to medical claims inflation. For policyholders aged 60 and above who hold the minimum plan within their MHIT product, insurers agreed to pause premium adjustments due to claims inflation for one year from the policy anniversary. These pauses do not cover premium increases triggered by moving into a higher age band, which insurers manage separately.
Policyholders whose MHIT policies lapsed or were surrendered in 2024 because of repricing were given a route back: they can ask their insurer to reinstate the policy at the adjusted premium without extra underwriting. Insurers that did not already offer a suitable lower-cost alternative product were expected to make one available by the end of 2025, with switching not requiring new underwriting or a switching cost.
Where co-payment fits into the longer-term reform
Alongside the interim measures, the Government, insurers and private hospitals committed RM60 million to accelerate broader health reforms, including work toward a Diagnosis-Related Group payment model and publishing the costs of common medical procedures for greater transparency. As part of a wider set of industry recommendations put forward in March 2025, co-payment, and in particular co-insurance, was proposed as a long-term tool to help policyholders manage costs by sharing responsibility for healthcare expenses and encouraging more measured use of medical services, alongside proposals such as regulating pharmaceutical pricing and rewarding claims-free years with no-claim bonuses.
It is worth being precise about where things stand: co-payment as a broad requirement for new MHIT products was proposed as part of this reform package rather than something every policy already carries. Whether a specific medical card includes a co-payment or deductible feature, and at what percentage, depends on the individual product. Always check your Product Disclosure Sheet and policy wording, or ask your insurer directly, for the current terms on your plan.
What this means if you are shopping for a medical card
- Ask whether the plan carries co-payment or a deductible, and get the exact percentage or amount in writing rather than relying on a verbal summary.
- Ask how the insurer has applied the interim measures, particularly if you are 60 or older and on a minimum plan, since the one-year pause on claims-inflation adjustments is specific to that group.
- Compare a co-payment plan's premium against a plan without one. A lower premium in exchange for sharing more of the cost at claim time is a genuine trade-off, not automatically a better or worse deal.
- Keep your contact details updated with your insurer, since communications about repricing and alternative product options are being sent progressively.
Talk to an advisor
Whether a co-payment feature makes sense for you depends on your claims history, your budget, and how much cost-sharing you are comfortable with at the point of a hospital bill. An advisor can compare co-payment and non-co-payment medical cards against your situation. Find one through our advisor directory, or compare current plans at /compare/malaysia/health.
Sources
This content is educational information from a licensed advisor, not financial advice. Product details vary by insurer — verify specifics with an advisor.
