Latest news with #EmployeesProvidentFund
New Straits Times
24 minutes ago
- Business
- New Straits Times
NST Leader: Healthcare burden
Few wage earners, especially Gen Z and millennials, seem concerned about saving for retirement. They view a nest egg as a strange concept, believing it's the the Employees Provident Fund's (EPF) responsibility. Their main concern is current spending, not on big purchases but on daily essentials — utilities, Internet data, rent, food, clothes, transportation and family support. Whatever little left of their monthly salaries goes towards leisurely pursuits. Even with an inflationary economy, these expenditures have bumped Malaysian consumer annual spending by five per cent, reaching RM904.6 billion, according to one study. This heavy spending has driven consumption growth back to pre-Covid-19 levels, supported by a rebounding economy that mirrors previous consumption patterns. Apparently, this RM904.6 billion in spending is still insufficient, especially for significant expenses that monthly salaries can barely cover. This has led to calls for the EPF to expand Account 2 for medical insurance, in addition to existing withdrawals for education, housing and healthcare. Are Malaysians burdened by medical insurance costs? Premiums can range from RM100 to more than RM2,500 monthly, depending on age, health condition, coverage and policy terms. Medical inflation in Malaysia is significant, at a high rate of 12.6 per cent. Consequently, falling ill without insurance is difficult, but hospitalisation — unless it's a government–subsidised facility — is almost unaffordable. Many Malay-sians, preferring smoother and faster admittance, opt for expensive private hospitals even though diagnosis and treatment quality are comparable to public facilities. Given the rising medical and living costs, the demand to widen Account 2 withdrawals is understandable. If approved, this expansion could significantly improve medical insurance coverage and take a big weight off the national healthcare system but it would also inevitably deplete EPF savings, particularly if funds are spent on non-essential or poorly chosen insurance plans, a risk further aggravated by aggressive marketing from health insurance companies. Quantifying the EPF's potential allocation for medical insurance withdrawals is challenging, but it would likely be substantial given that nearly everyone might apply. While previous figures show personal medical insurance coverage among Malaysians ranging from 22 to 45 per cent, a 2024 survey reported that 42 per cent have no coverage at all. If approved, the EPF must set clear guidelines on eligible insurance types and treatments. At the same time, contributors need to understand the long-term trade-offs of prematurely depleting their retirement funds. Ultimately, the quickest way to ensure coverage is to view medical insurance much like rent: costly but necessary. Perhaps Malaysians could redirect some funds from their monthly budget or "unnecessary" spending. Such choices would be difficult. Still, EPF contributors will likely argue that present survival is more relevant than worrying about the future. This perspective stems from an emerging philosophy of "retired but still working", a reality already taking hold.
New Straits Times
8 hours ago
- Business
- New Straits Times
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.
Barnama
8 hours ago
- Health
- Barnama
Proposed EPF Health Insurance Scheme Will Be Voluntary, Says Dzulkefly
KUALA LUMPUR, June 20 (Bernama) -- The government's proposed health insurance scheme, to be funded through Account 2 of the Employees Provident Fund (EPF), will be voluntary and not mandatory, said Health Minister Datuk Seri Dr Dzulkefly Ahmad. He said the initiative aims to offer EPF contributors the option of broader insurance coverage, as currently, 32 percent of healthcare costs are paid out-of-pocket by patients without insurance protection. "Through this approach, the government hopes to expand access to faster, higher-quality private healthcare without increasing the financial burden on the people," he said in a Facebook post today.
New Straits Times
11 hours ago
- Health
- New Straits Times
Dzulkefly: EPF medical scheme will be optional, not mandatory
KUALA LUMPUR: The government's proposed health insurance scheme, to be funded through Account 2 of the Employees Provident Fund (EPF), will be voluntary and not mandatory, says Health Minister Datuk Seri Dr Dzulkefly Ahmad. He said the initiative aims to offer EPF contributors the option of broader insurance coverage, as currently, 32 per cent of healthcare costs are paid out-of-pocket by patients without insurance protection. "Through this approach, the government hopes to expand access to faster, higher-quality private healthcare without increasing the financial burden on the people," he said in a Facebook post today. Dzulkefly said that the proposal drew inspiration from countries like Singapore, which prioritise insurance access for the majority of citizens. "It doesn't come out of their pockets. Only about 1 percent of Account 2 would be used to pay for insurance. This is the best way," he said. Yesterday, Dr Dzulkefly was reported as saying that the government is considering allowing Malaysians to use their EPF Account 2 to pay monthly health insurance premiums. If implemented, it would enable 16 million EPF members to utilise their contributions to access private hospital care. –Bernama
The Star
11 hours ago
- Health
- The Star
Proposed EPF health insurance scheme will be voluntary, says Dr Dzul
KUALA LUMPUR: The government's proposed health insurance scheme, to be funded through Account 2 of the Employees Provident Fund (EPF), will be voluntary and not mandatory, Datuk Seri Dr Dzulkefly Ahmad says. The Health Minister said the initiative aims to offer EPF contributors the option of broader insurance coverage, as currently, 32% of healthcare costs are paid out-of-pocket by patients without insurance protection. ALSO READ: Ageing society will deeply affect healthcare and workforce, says EPF chairman "Through this approach, the government hopes to expand access to faster, higher-quality private healthcare without increasing the financial burden on the people," he said in a Facebook post on Friday (June 20). Dr Dzulkefly added that the proposal draws inspiration from countries like Singapore, which prioritise insurance access for the majority of citizens. "It doesn't come out of their pockets. Only about 1% of Account 2 would be used to pay for insurance. This is the best way," he said. On Thursday, Dr Dzulkefly was reported as saying that the government is considering allowing Malaysians to use their EPF Account 2 to pay monthly health insurance premiums. If implemented, it would enable 16 million EPF members to utilise their contributions to access private hospital care. - Bernama
