Health Inflation Rises to 3% in 2025

 

Health inflation in Malaysia increased to 3% in 2025 from 1.4%, driven by rising healthcare service costs. Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said the Preliminary Report of the Malaysia Health Price Index (IHK) 2025 showed that the health services category recorded the highest increase at 4.4%, compared with 0.9% in 2024. He said the increase was mainly driven by a 9% rise in insurance expenditure.

 

Meanwhile, inflation for medicines rose to 2.7% from 2.2% in 2024, while health equipment increased to 1.2% from 0.6%. The Medicines category is the largest component of household health expenditure in Malaysia, accounting for 38.9% of the IHK weighting. Malaysia’s IHK covers health-related components from several consumer price index (CPI) groups, while other countries measure health inflation based on the health category in their respective CPI. Health inflation rates in selected countries in 2025 ranged between negative 0.8% and 5.3%. Vietnam recorded a higher health inflation rate at 5.3% compared with Malaysia’s 3%, while Thailand recorded the lowest rate at negative 0.8%.

 

Source: https://en.wikipedia.org

 

The IHK has served as an important reference for measuring changes in prices of health-related goods and services in relation to household spending. The statistics can help the government, stakeholders and the public identify trends in healthcare cost changes, supporting more effective planning, implementation and monitoring of health inflation.

 

Meanwhile, the government will launch a pilot programme for its Base Medical and Health Insurance and Takaful (MHIT) plan in the Klang Valley by the end of July, with monthly premiums expected to start from around RM60.

 

Known as MediAsas, it will be offered as a standalone medical insurance and takaful protection plan with two product options — MediAsas Teras (a standard plan) and MediAsas Fleksi (a standard-plus plan). The scheme will provide medical coverage for individuals up to the age of 85. The MediAsas premiums will be determined based on the latest medical claims experience and healthcare cost inflation trends, with indicative premiums expected to remain within the target monthly range of around RM60 to RM550 for individuals within the entry age of up to 70 years. Final pricing will be confirmed before the nationwide implementation in January 2027. The pilot phase will run from end-July until October 2026.  

 

Six insurers and takaful operators will participate in the pilot programme, together with selected hospitals in the Klang Valley. They include AIA Bhd, Allianz Life Insurance Malaysia Bhd, Great Eastern Life Assurance (Malaysia) Bhd, Prudential BSN Takaful Bhd, Etiqa Family Takaful Bhd and Syarikat Takaful Malaysia Keluarga Bhd. The government said the pilot programme will test "operational readiness, including systems integration, customer experience and operational processes" in a controlled environment. Feedback gathered during the pilot phase will be used to refine implementation arrangements before the nationwide rollout.

 

The Base MHIT initiative forms part of the government's broader Reset strategy, undertaken jointly with Bank Negara Malaysia, to address rising medical inflation and strengthen the long-term sustainability of Malaysia's healthcare system. The strategy focuses on value based healthcare in improving patient outcomes, optimising cost-effective healthcare services and enhancing access to quality care.  

 

References:

Health inflation rises to 3% in 2025 on higher service costs, says DOSM, theedgemalaysia.com, 8 July 2026

 

Govt to launch base-medical insurance plan by end-July, monthly premiums start at RM60, Luqman Amin, theedgemalaysia.com, 7 July 2026