Healthcare expenditure in Malaysia remains low, comprising only about 4% of the country’s GDP, far below the 6% to 7% average seen in similar economies. This is according to the latest report by Malaysian Reinsurance Berhad (Malaysian Re), which underscores the need for urgent reform in the sector.
The Malaysian Insurance Highlights (MIH) 2025 report identifies several key factors driving up healthcare costs in Malaysia, including medical inflation, an ageing population, and the rising prevalence of non-communicable diseases.
One of the main concerns highlighted is the persistent underfunding of the public healthcare sector. With limited financial resources, public healthcare in Malaysia has struggled to keep pace with the growing demand for services. This, combined with inefficiencies in private healthcare delivery, has exacerbated access and affordability issues for many Malaysians.
In the private sector, the report points out that misaligned interests between policyholders, insurers, and healthcare providers have led to issues such as overconsumption of services and inflated medical billing. These concerns have prompted calls for greater alignment and more sustainable approaches to healthcare finance.
Malaysian Re President and CEO Ahmad Noor Azhari Abdul Manaf emphasized that the report aims to address the structural challenges currently affecting healthcare access and affordability in the country. He argued that the rising costs, combined with limited public resources, demand the development of new financing strategies and approaches to healthcare provision.
The MIH 2025 report, which draws on structured interviews and expert insights, explores emerging trends in medical and health insurance. It highlights the crucial role insurers must play in creating more sustainable healthcare solutions while managing cost pressures.
The report also stresses the importance of collaboration between the insurance industry, regulators, and healthcare providers in order to address these challenges and improve access to care for all Malaysians.
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