Bank Negara Malaysia had earlier today announced a 10% cap for increases in premiums for a majority of policyholders spread over the next three years.

The central bank, which regulates the insurance industry, also said those who cancelled or let their policy lapse in 2024 because of premium hikes could request for a reinstatement without extra costs.

In response, the Galen Centre for Health and Social Policy said capping yearly premium adjustments to 10% is a relief and a reprieve for many, especially those above 60, who were mulling terminating their policies in the first place.

It said while BNM’s interim measures could be “considered a win for the consumer”, it called into question what would happen in future, with healthcare inflation expected to increase to at least 15% next year.

“Unfortunately, (the measure) is akin to kicking the can down the road for three years, as double-digit healthcare inflation persists,” Galen’s CEO, Azrul Khalib, said in a statement.

“Will this temporary delay result in an inevitable drastic increase later as the cost of claims continues to skyrocket beyond reasonable estimates?”

Azrul said the problem remained in private hospital charges, which were mostly unregulated and played a big role in increasing costs.

He said there must be a new independent body to regulate private hospital charges to oversee healthcare fees and review any large price increases, instead of leaving it to BNM.

“(Right now,) there is no compulsion or incentive for private hospitals to collaborate with insurers to control costs,” he said.