Public Accounts Committee urges tighter oversight on insurance pricing and private hospital charges amid rising healthcare costs in Malaysia.
KUALA LUMPUR: The Public Accounts Committee (PAC) has proposed 17 recommendations to the government, particularly the Ministry of Finance (MOF), Bank Negara Malaysia (BNM) and the Ministry of Health (MOH), to tackle rising health insurance premiums and private hospital charges.
PAC chairman Datuk Mas Ermieyati Samsudin said the proposals formed part of a statement presented in the Dewan Rakyat today, amid growing public concern over escalating healthcare costs and Malaysians’ ability to sustain their insurance coverage.
According to her, PAC has recommended that the MOF, BNM and MOH introduce a new independent governance structure for private healthcare to safeguard consumers, including oversight of insurance pricing and benefits.
She urged the MOH to work with the Ministry of Domestic Trade and Cost of Living (KPDN) to establish a pricing control mechanism for medicines and medical equipment, ensuring costs remain reasonable and no party makes excessive profits.
“MOH should explore sourcing supplies directly from manufacturers, prioritising local producers to reduce dependence on the dominance of suppliers or certain cartels,” she said in a statement today.
She said PAC also proposed that the MOH expedite the rollout of the Diagnosis Related Group (DRG) system in the private healthcare sector and hasten amendments to the Private Healthcare Facilities and Services Act 1998 (Act 586), so that the ministry can regulate hospital charges beyond doctors’ consultation fees.
“The MOH 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.
She also said that MOH and BNM should enhance existing complaint and dispute-resolution mechanisms for insurance and healthcare costs to resolve issues more efficiently and effectively.
According to Mas Ermieyati, PAC has also recommended that BNM issue more detailed and standardised operational guidelines (standardised FAQs) to prevent insurers from manipulating interpretations of interim measures introduced by the government.
“To ensure the effectiveness of government interventions, BNM 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 central bank has been advised to push the insurance and takaful sector towards incremental annual repricing, ensuring smaller and steadier premium adjustments and avoiding sharp financial shocks to policyholders.
PAC also proposed that the Malaysia Competition Commission (MyCC) provide guidance to stakeholders on discount negotiation practices between hospitals and insurers to ensure the process is fair and does not affect patients’ access to care.
“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.
She said PAC has underscored the need for the government to establish a clear and realistic implementation timeline for all RESET (Regulatory Enhancement for Sustainable and Efficient Takaful/Insurance) measures, while ensuring structured preparation to achieve long-term, sustainable outcomes.
She said the recommendations came after public hearings on the matter in Penang and Kuala Lumpur on Feb 14 and 21 last year, followed by 19 proceedings held between Feb 24 and August 14, 025, with the statement subsequently finalised over four days.
Twenty-one witnesses were called to provide evidence, including officials from the MOF, the MOH, and BNM, the Association of Private Hospitals of Malaysia (APHM), non-governmental organisations, academic representatives, and stakeholders from the insurance and takaful sectors.
