Pilot phase for new base medical insurance plan begins July amid healthcare cost reform push, says finance minister II

KUALA LUMPUR, June 30 — The government’s new base medical and health insurance/takaful (MHIT) plan will enter its pilot phase by the end of July as Putrajaya moves to address rising healthcare costs and insurance premiums.

According to The Star, Finance Minister II Datuk Seri Amir Hamzah Azizan said the pilot rollout will involve selected insurers, takaful operators and private hospitals in the Klang Valley under the government’s RESET strategy introduced in June last year.

He said the initiative is part of broader efforts to manage escalating medical inflation and private healthcare costs.

“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 Parliament on Tuesday.

Amir Hamzah said the full rollout of the base MHIT plan is expected nationwide in January 2027.

He said the initiative is overseen by the Joint Ministerial Committee on Private Healthcare Costs, which includes the Finance Ministry, Health Ministry, Bank Negara Malaysia and other stakeholders.

He added that the committee has already implemented five key measures, including the publication of a white paper on MHIT in January 2026, disclosure of treatment cost ranges at private hospitals, a World Bank medical inflation report in April, consumer-facing tools to assess insurance needs and claims, and tax incentives for charitable funds set up by private hospitals.

The base MHIT plan will also be supported by the phased rollout of the Diagnosis-Related Group (DRG) payment system, which aims to standardise hospital charges and enable more structured negotiations with private healthcare providers.

“This creates a transparent framework and benchmark to manage hospital charges while protecting consumers’ interests,” he said.

Responding to concerns over reduced government spending, Amir Hamzah said the recent expenditure rationalisation would not affect essential healthcare services.

He said the Finance Ministry had reduced the Health Ministry’s operating expenditure adjustment to RM500 million, significantly lower than the RM3.1 billion figure circulating on social media.

He stressed that the adjustment only involved non-critical spending, while core allocations for healthcare services, medicines, salaries and on-call allowances remained intact.

He added that RM6.5 billion has been allocated for medicines this year, while more than 18,000 healthcare workers will continue to be recruited.

Amir Hamzah also said several private hospitals have already set up charitable funds following the introduction of tax incentives last year, which will help subsidise treatment for B40 patients.

He said the base MHIT plan is designed to be affordable and accessible.

He added that individuals with stable and controlled pre-existing conditions will still be eligible for coverage, subject to terms and conditions.

The plan will also not be tied to investment-linked products, he said, in order to shield policyholders from investment risks that could drive up premiums.

“The wider risk pool and product design are intended to help control premium increases, particularly as policyholders grow older,” he said.