KUALA LUMPUR, Dec 5 — Nearly seven in 10 companies expect medical insurance costs to rise in 2026, with many already struggling to maintain existing benefits as premiums continue to climb, the Malaysian Employers Federation’s (MEF) latest survey has revealed.

Speaking at the launch of the Medical Benefits 2025 survey, 68 per cent of respondents said medical costs are expected to take a significant jump next year; 31 per cent said they expect no change, while just one per cent anticipate a drop.

“Many companies are already struggling with the schemes they have now, so if medical costs keep going up employers simply cannot sustain it 100 percent anymore,” said MEF president Datuk Syed Hussain Syed Husman.

“You’ll see more companies moving to co-sharing because the cost can no longer be managed on their own.”

He said firms may have to reduce coverage, shift to co-payment models, or even consider dropping medical insurance entirely as premiums become prohibitive.

MEF adviser and former executive director Datuk Shamsuddin Bardan said some companies have already opted out of group medical insurance and moved to self-insurance because premiums exceed the value of claims.

“They said the premium is higher than what they spend on actual medical claims. So they’d rather invest the money themselves and pay as they go,” he said.

MEF warned the problem will worsen as Malaysia moves rapidly into an ageing society, with more senior employees staying in the workforce but facing “super premium” charges or outright rejection by insurers.

“Some insurers simply say they don’t want to cover senior citizens because it’s a sure loss for them. This must be addressed if the government wants to encourage older Malaysians to remain employed,” he added.

The survey found the most common medical benefits offered by companies were outpatient consultation (95.2 per cent), hospitalisation and surgical treatment (88.8 per cent), specialist consultation (64.7 per cent), dental (68 per cent) and optical benefits (40 per cent).

Outpatient coverage was most commonly provided with a specified limit (71.6 per cent), while 9.6 per cent of companies offered unlimited, fully paid outpatient care. Coverage via medical insurance accounted for 20.1 per cent.

The top mental health challenges among employees were stress and pressure to meet targets (74 per cent), personal or family issues (59.7 per cent), burnout (51.9 per cent), anxiety or fear (47.4 per cent), and bullying or harassment (16.9 per cent).

The 2025 survey also examined AI adoption, finding that 74.1 per cent of companies were familiar with AI and 10.7 per cent were very familiar, while another 10.7 per cent had heard of it but were unsure, and 4.4 per cent were unfamiliar.

About 37.3 per cent of companies have adopted AI, 26 per cent have not, 19.1 per cent plan to adopt it, and 17.6 per cent remain unsure.

The top barriers to AI implementation were high cost (67.8 per cent), lack of internal expertise (66.7 per cent) and cybersecurity or ethical concerns (53 per cent).

A total of 231 companies took part in the survey, 98.3 per cent of which were MEF members. Non-manufacturing firms made up 64.9 per cent of participants, while 35.1 per cent were from the manufacturing sector.