Safeguards critical in tapping EPF savings for private healthcare, says expert
KUALA LUMPUR: A bold plan to allow Malaysians to tap into their Employees Provident Fund (EPF) Account 2 to pay for health insurance may help ease access to private healthcare.
However, an analyst cautions that without careful safeguards, it could leave retirees vulnerable later in life.
The proposal, which aims to address rising healthcare costs and access concerns, is a potentially meaningful step, particularly for middle-income earners and the ageing population, who are often excluded from targeted public health aid.
Universiti Putra Malaysia School of Business and Economics lecturer Associate Professor Dr Lee Chin said that while the initiative fills a gap in health protection, the long-term implications for retirement adequacy must not be overlooked.
"From a social protection standpoint, enabling the use of EPF savings for health insurance could fill an important gap, especially for the ageing population and middle-income groups who fall outside public safety nets. However, contributors must be well-informed.
"Account 2 was designed to support housing, education and emergencies — all of which are already pressing needs. Allowing health insurance payments from the same source adds another layer of pressure," she told the New Straits Times.
Lee added that without proper caps or financial literacy support, contributors risk depleting their savings too quickly, leaving little for their retirement years.
From a broader policy perspective, she said such flexibility should be paired with strong public education campaigns to help contributors make informed decisions, alongside safeguards to ensure withdrawals are responsibly managed.
"At the same time, the move could have ripple effects on the health insurance sector. By enabling more people — particularly those previously uninsured — to afford private coverage, the insurance pool could grow, improving risk distribution and potentially lowering premium costs over time."
However, she cautioned that a sudden spike in demand could also lead to higher premiums or moral hazard without sufficient regulatory oversight.
"Insurers and regulators must be prepared to monitor cost escalation and prevent abuse," she said.
As for fund sustainability, Lee said that while Account 1 remains ring-fenced for retirement, even partial erosion of Account 2 could undermine long-term financial resilience, particularly among lower to middle-income groups.
She cited examples such as Singapore's MediSave and Chile's pension-linked health models, which allow similar withdrawals under strict regulatory frameworks, often supported by employer or government co-payments.
"Malaysia can learn from these examples to design a scheme that is targeted, transparent and accountable."
She added that the policy could serve as a much-needed bridge between financial and health protection, provided it is not treated as a short-term fix.
"In short, this policy could bridge the gap between financial security and health protection —but only if it walks the line carefully. Health access should not come at the cost of growing old in hardship."
On June 19, Health Minister Datuk Seri Dr Dzulkefly Ahmad said the government was considering allowing EPF members to use their Account 2 savings to pay for monthly health insurance premiums.
He said that, if implemented, the initiative could enable 16 million EPF contributors to access private hospital treatment using their contributions.
However, Dzulkefly later clarified that the proposed health insurance scheme — funded through EPF Account 2 — would be voluntary and not mandatory.
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If big brands like BMW, Ducati, Yamaha, or Kawasaki feel out of reach, the motorcycle makers mentioned above have a bike that suits every needs, wants, and interests at much more comfortable prices. Of course, there's no beating the reliability and performance of well established bike maufacturers that have decades of experience, but the bikes 'Made in China' are serious contenders now for those looking to get into the wonderful world of motorcycling without burning through the bank account. Share your thoughts with us via TRP's . Get more stories like this to your inbox by signing up for our newsletter.
