PKR leader: Reconsider allowing EPF withdrawal to pay insurance

Summary

• A PKR leader urges the government to reconsider allowing EPF Account 2 withdrawals for monthly health insurance premiums.

• Hulu Selangor PKR division chief Dr Sathia Prakash Nadarajan, who is a medical doctor, warns this could endanger retirement savings amid rising insurance costs and lapsing policies.

• He proposes structural reforms, emphasising that policies should be tailored to Malaysia’s context rather than imported from countries with different socio-economic conditions.

The Health Ministry was urged to reconsider allowing Employees Provident Fund (EPF) contributors to use Account 2 to fund their monthly health insurance premiums.

In a statement today, Hulu Selangor PKR division chief Dr Sathia Prakash Nadarajan said allowing EPF withdrawals to pay insurance premiums raises serious concerns.

This is especially in a private insurance landscape that is still profit-oriented and poorly regulated, he added.

“Health insurance, while important, is a recurring financial commitment. Many Malaysians already struggle with affordability, with policies often lapsing after a few years due to financial strain.

“Depleting limited retirement savings to pay for a product that may not be sustained long-term creates a dangerous cycle of insecurity.

“Moreover, premium hikes of 40 to 70 percent in recent years, as reported, only compound the problem.

“It is neither realistic nor responsible to expect the rakyat to cannibalise their retirement safety nets to keep pace with escalating private sector costs,” Sathia (above) said.

On Thursday (June 19), Health Minister Dr Dzulkefly Ahmad said the proposal was inspired by countries like Singapore, which prioritises access to insurance for the majority of people.

He said the proposal was voluntary and that it aimed to provide options to those who want more comprehensive coverage, as 32 percent of healthcare costs are currently paid out-of-pocket by patients without insurance.

“With this approach, the government aims to expand access to faster and better quality private healthcare without increasing the financial burden on the people,” said the minister on Facebook.

Tailored, transparent health scheme

However, Sathia, who is a medical doctor, highlighted how the EPF was established as a form of social welfare to protect Malaysians in retirement.

He suggested that the government establish an equitable and transparent National Health Protection Scheme to complement the public healthcare system instead.

He also called for the government to ensure, when drawing international comparisons, that the introduction of new policies adheres to existing ones.

“Malaysia’s socio-economic landscape, wage structures, and healthcare ecosystem differ significantly from those in other countries.

“Policies must be tailored to local realities, not imported wholesale from foreign models,” Sathia said.

The model of healthcare financing should come through structural reform, he added.

“In policymaking, especially in matters as vital as health and retirement, sustainability and foresight must prevail over expedience,” he said.

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