Govt to roll out insurance plan in 2027 to rein in costs, expand coverage

The plan aims to provide affordable protection against major healthcare costs while supporting value-based care and easing pressure on public hospitals.

The scheme is designed as a hospitalisation policy that covers large hospital bills based on shared-room costs, with expanded options for pre- and post-hospitalisation care. (Freepik pic)

KUALA LUMPUR:

 The government will introduce a base medical and health insurance and takaful (MHIT) plan aimed at providing Malaysians with affordable and sustainable protection against major healthcare expenses, while helping manage rising private healthcare costs.

The base MHIT plan is designed as a hospitalisation policy that covers large hospital bills based on shared-room costs, with expanded options for pre- and post-hospitalisation care. These include consultations and follow-ups at GP clinics, physiotherapy, and home nursing care.

There will be no lifetime limit under the plan, while the annual limit is set at a level sufficient to cover treatment costs for most common conditions, representing 99% of hospitalisation bills. Coverage will be guaranteed for renewal up to the age of 85.

The scheme was announced by health minister Dzulkefly Ahmad during a joint press conference with finance minister II Amir Hamzah Azizan and Bank Negara Malaysia governor Abdul Rasheed Ghaffour here.

“The plan will be piloted in the second half of the year before being launched in the first quarter of 2027,” said Dzulkefly.

“High-cost treatments, including both inpatient and outpatient cancer treatments and drugs, will be covered based on cost-effectiveness assessment.

“Benefits and premiums under the base MHIT plan will be standardised, supporting broader risk pooling and portability across insurers and takaful operators (ITOs), as well as a consistent approach to underwriting and claims assessments.”

Dzulkefly said the plan is also intended to serve as a benchmark for the market, establishing a baseline for ITOs to improve their MHIT offerings and ensuring alignment with the principles of the base plan.

Under the base MHIT plan, policyholders will have access to optional, self-funded preventive care and wellness packages offered at discounted rates negotiated by the health ministry.

To contain costs and support value-based care, the plan will feature tiered co-payment structures aligned with hospital coverage, with co-payments applied based on treatment type and cost levels.

In addition, the phased introduction of diagnosis-related group (DRG) payments is aimed at helping manage costs while improving transparency, predictability, and efficiency in the healthcare system.

Policyholders who can afford greater coverage may also opt for higher annual policy limits, with higher premiums borne accordingly.

The base MHIT plan aims to enable more Malaysians to obtain a basic level of financial protection against essential healthcare expenditures through an affordable and sustainable product.

It is also expected to help ease congestion in public hospitals by encouraging those who can afford insurance to seek care in the private sector.

In June last year, Dzulkefly said the introduction of a basic MHIT product marked the first step in the phased implementation of a DRG pricing system.

He said the product would broaden private sector financing options and steer private healthcare towards a value-based healthcare model. - FMT