MOF: Health Ministry spending adjustment capped at RM500m

 

PARLIAMENT | The Finance Ministry has considered an adjustment to the Health Ministry’s operating expenditure of up to RM500 million, far below the RM3.1 billion figure circulating on social media, said Finance Minister II Amir Hamzah Azizan.

He said the amount does not involve core spending, including emoluments, medical supplies, overtime payments and on-call allowances.

“Medicines allocation has also been increased to RM6.5 billion for 2026.

“For 2026, the Health Ministry continues to target the recruitment of more than 18,000 healthcare workers, with no reduction from the previous year,” Amir (above) said in the Dewan Rakyat during Question Time.

Amir said the expenditure adjustment only covers non-critical operating costs - while all core spending, including essential services, security, healthcare and education, would continue as approved under Budget 2026.

The move, he said, was aimed at creating fiscal space to partly offset the sharp rise in subsidy spending driven by the West Asia crisis.

He was responding to an additional question from Hasni Mohammad (BN–Simpang Renggam) on the government's efforts to implement various initiatives, particularly in addressing inflation in the healthcare sector.

Amir added that fiscal discipline was important as the Reset (revamp, enhance, strengthen, expand, transform) healthcare cost reform agenda focused on managing future cost increases.

“Core initiatives will also provide opportunities to contain cost escalation through greater transparency and new approaches, such as diagnosis-related groups, to ensure we can manage rising costs,” he said.

Engaging private hospitals

On tax incentives for private hospital charitable funds, he said the government had engaged several private hospitals that have established such funds to help cover treatment costs for B40 patients.

In response to the main question on the Reset strategy, the medical and health insurance/takaful (Mhit) plan and progress of the ministerial-level committee in tackling medical inflation, Amir said five key initiatives have been implemented so far.

He said the initiatives include the publication of the Mhit White Paper in January 2026; publication of a range of common treatment costs in private hospitals; and the release of a World Bank report on medical inflation in April 2026.

They also include tools to improve transparency for consumers in assessing insurance needs, making claims and planning personal budgets, as well as tax incentives for private hospital welfare funds to encourage charitable healthcare services.

He added that the government is actively conducting a pilot phase of the Mhit basic plan, scheduled to begin by the end of July 2026.

“The controlled pilot phase involves selected insurers and takaful operators, as well as private hospitals in the Klang Valley, to test acceptance of the Mhit basic product and system readiness.

“The Mhit basic plan is expected to be rolled out nationwide in January 2027,” he said.

- Bernama