The government will pilot a national health insurance scheme for Malaysia’s lower-income group, said finance minister Lim Guan Eng in his 2019 Budget speech in Parliament in November.
Called the B40 Health Protection Fund, the scheme will provide free insurance and takaful coverage against four main critical illnesses for up to MYR8,000 ($1,915) and up to 14 days of hospitalisation income of MYR700 per annum, reported Asia Asset Management. The fund will be managed by the central bank.
B40 refers to the 40% of total households that make up the lowest income group in Malaysia. The average monthly household income for this group is MYR3,860. The scheme aims at helping this group with the rising cost of living, including healthcare costs.
“Insurance and takaful can act as a safety net by providing financial support and enabling households to get back on their feet, especially for the lower income groups,” Mr Lim said.
Great Eastern Life has agreed to pledge MYR2bn of seed funding to the health insurance fund, said the minister of finance. But the insurer said discussions are still ongoing due to prevailing foreign ownership requirements applicable to insurance companies in Malaysia.
Meanwhile, to encourage higher insurance take-up rate, the government is splitting the current MYR6,000 combined tax deduction for compulsory contributions to the Employees Provident Fund (EPF) and life insurance or takaful premiums. From next year, it will be separated into MYR4,000 for EPF contribution and MYR3,000 for takaful or life insurance premiums.
The Life Insurance Association of Malaysia (LIAM) said it was pleased with the special incentives granted by the government to fulfil the people’s needs and to promote a fully inclusive society, reported The Star. LIAM said the move would give the life industry the right focus and encourage individuals to purchase life insurance. M
MYR1 = $0.24