Designing the money part of Malaysia’s long-term care system: Economists share what to look out for

KUALA LUMPUR, Nov 14 — Malaysia faces a "tricky" challenge in determining who will pay for the long-term care and support of its older citizens, according to an economist. Matthew Dornan, a World Bank senior economist, suggested that both tax-funded and mandatory insurance options could be used, but both present their own challenges.

If Malaysia were to rely solely on tax revenue, it would require significant fiscal reform and an expanded tax base. Alternatively, using the Employees Provident Fund (EPF) system to fund a national long-term care insurance scheme would also face challenges as it does not cover everyone. Debbie Muirhead, a senior health economist at the World Health Organization, emphasized that Malaysia should first determine what long-term care costs its system would cover, in order to estimate the costs of delivering those benefits.