Medical costs in Malaysia have been rising faster than wages and inflation, making private healthcare increasingly unaffordable for many households, amid escalating medical insurance premiums.
In response, Bank Negara Malaysia (BNM) has announced a major reform to the private medical insurance and takaful landscape — the introduction of a Base Medical and Health Insurance/Takaful (MHIT) Plan, expected to launch in early 2027.
In response, Bank Negara Malaysia (BNM) has announced a major reform to the private medical insurance and takaful landscape — the introduction of a Base Medical and Health Insurance/Takaful (MHIT) Plan, expected to launch in early 2027.
This initiative marks a significant shift in how private medical coverage will be structured, priced, and accessed in Malaysia.
What Is the Base MHIT Plan?
The Base MHIT Plan is a voluntary, standalone medical insurance/takaful product introduced under Malaysia’s RESET healthcare reform strategy.
Its main objectives are to:
- Improve affordability of private medical insurance
- Enhance transparency and simplicity in coverage
- Promote premium stability amid rising medical inflation
- Expand access for uninsured Malaysians and those struggling with repricing
Importantly, this plan complements — not replaces — public healthcare, which will continue to provide universal access.
Key Features of the Base MHIT Plan
1. Standardised Benefits Across Insurers
All participating insurers and takaful operators (ITOs) will offer the same core benefits, making comparisons easier and reducing complexity. Coverage includes:
- Hospital room and board
- Surgical procedures
- Hospital supplies, services and medication
- Day surgeries and selected outpatient treatments
- Pre- and post-hospitalisation care
This standardisation is a major departure from today’s highly fragmented MHIT products.
2. Clear Annual Coverage Limits
The plan introduces realistic and needs-based annual limits:
- RM100,000 per year for most individuals
- RM150,000 per year for those aged above 60
- Optional Standard-Plus Plan with RM300,000 annual limit, paired with a higher deductible
According to BNM, these limits are sufficient to cover 99% of common medical treatments based on recent claims data.
3. Coverage Up to Age 85
- Entry age: up to 70 years old
- Coverage continues until age 85
- Premiums are based on age, gender, and health status, with safeguards to prevent extreme premium jumps
This is especially relevant for ageing Malaysians facing escalating premiums under existing policies.
4. Tiered Co-Payments to Control Costs
To curb overutilisation and manage long-term affordability:
To curb overutilisation and manage long-term affordability:
- Lower co-payments apply at in-network hospitals that meet efficiency and transparency standards
- Higher co-payments apply for out-of-network facilities
This approach encourages value-based healthcare, where quality and cost efficiency matter.
5. Greater Premium Stability
One of the biggest concerns today is frequent repricing. The Base MHIT Plan addresses this through:
- Broader risk pooling across insurers
- Standardised benefits
- Co-payment mechanisms
- Gradual adoption of Diagnosis-Related Group (DRG) payment systems
Indicative monthly premium targets (subject to finalisation):
- Ages 31–35: RM80 – RM120
- Ages 61–65: RM280 – RM350
- Above 75: RM500 – RM780
Final premiums will be announced closer to the 2027 launch.
6. Standalone Product (No Investment Link)
The Base MHIT Plan will not be bundled with investment-linked products, making it:
- Easier to understand
- More transparent in pricing
- Focused purely on medical protection
This is a clear shift away from complex ILP structures that many policyholders struggle to evaluate.
7. Optional Wellness & Preventive Care
Policyholders can optionally access:
- Vaccinations
- Health screenings
- Preventive wellness packages
These services are offered at discounted rates, encouraging early detection and healthier lifestyles.
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What About Existing Policyholders?
- Existing MHIT policyholders can switch to the Base MHIT Plan with the same insurer without re-underwriting or waiting periods
- BNM has capped annual premium increases due to medical inflation at 10% until end-2026
- Policyholders are encouraged to maintain current coverage until the Base Plan becomes available
The Base MHIT Plan represents a structural RESET of private medical insurance in Malaysia:
- More predictable costs
- Fewer surprises from repricing (hopefully 👀)
- Easier plan comparison
- Better protection for middle-income households and retirees
While it is not a social insurance scheme, it fills a critical gap between public healthcare and increasingly expensive private medical plans.
On this particular matter, we reached out to Alex Yeoh, a Licensed Financial Planner and below is his opinion:
"Well, it looks good at this preliminary stage, especially on the affordability of the base plan. However, there is some trade-off with features like co-payment, deductible, and, the relatively lower annual limit if compared to the current medical insurance available in the market.Nevertheless, this could be a good alternative option for those who can't cope with the ever increasing premium due to repricing, or, for those who only need a basic medical plan to start with after graduating."
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