THE government will launch a pilot programme for its new base medical and health insurance/takaful (MHIT) plan by the end of July, marking a key milestone in the government's efforts to make private healthcare coverage more affordable and sustainable.
Finance Minister II Datuk Seri Amir Hamzah Azizan said the pilot phase will involve selected insurers, takaful operators and private hospitals in the Klang Valley, before the scheme is expanded nationwide in January 2027.
Speaking during Question Time in the Dewan Rakyat, Amir said the initiative forms part of the government's RESET strategy introduced in June last year to address rising medical costs and increasing private health insurance premiums.
“The government introduced the RESET strategy as a comprehensive, targeted and high-impact framework to control rising healthcare costs and private medical insurance premiums,” he said in reply to Datuk Seri Hasni Mohammad (BN–Simpang Renggam).
He said implementation of the strategy is coordinated by the Joint Ministerial Committee on Private Healthcare Costs, comprising the Finance Ministry, Health Ministry, Bank Negara Malaysia and other key stakeholders.
According to Amir, the committee has already delivered several major reforms, including the publication of the MHIT White Paper, the introduction of treatment cost ranges for private hospitals to improve price transparency, the release of the World Bank's medical inflation report, consumer tools to help Malaysians assess insurance products and claims, and tax incentives for charitable funds established by private hospitals.
He said the base MHIT plan will be complemented by the phased implementation of the Diagnosis-Related Group (DRG) payment system, which is expected to standardise hospital charges and create a more transparent framework for negotiations between insurers and private healthcare providers.
“This creates a transparent framework and benchmark to manage hospital charges while protecting consumers' interests,” he said.
Amir also sought to allay concerns over government expenditure rationalisation, saying the Health Ministry's operating expenditure adjustment had been reduced to RM500 million, substantially lower than the RM3.1 billion figure circulating on social media.
“The adjustment only involves non-critical operating expenditure. Core spending on healthcare services, medicines, salaries and on-call allowances remains unchanged,” he said.
He added that the allocation for medicines has increased to RM6.5 billion this year, while more than 18,000 healthcare workers will continue to be recruited as planned.
The minister said several private hospitals have already established charitable funds under tax incentives introduced last year to help finance treatment for patients from the B40 income group.
He added that the new insurance plan has been designed to be affordable, sustainable and easy to understand.
“Unlike many existing products, the plan will allow individuals with stable and controlled pre-existing medical conditions to obtain insurance or takaful coverage, subject to terms and conditions,” he said.
The base MHIT plan will also not be linked to investment-linked products, shielding policyholders from investment risks that often contribute to premium increases.
“The wider risk pool and product design are intended to help control premium increases, particularly as policyholders grow older,” he said. - June 30, 2026
