Can MediAsas keep medical bills from breaking the bank?

 MediAsas aims to give more people a basic layer of medical protection they can afford, then build wider healthcare reforms around it.

Only about 22% of Malaysians currently have medical and health insurance, or takaful coverage.

PETALING JAYA:

A bad plate of food. A night of vomiting. Three days in hospital, then a readmission when things get complicated. By discharge, the hospital bill can run up to the thousands.

Illness is ordinary enough to happen to almost anyone, and expensive enough to wreck a household budget that has no insurance to fall back on.

That risk is exactly what the health ministry, Bank Negara Malaysia (BNM) and the finance ministry are trying to address with MediAsas, a new basic medical insurance and takaful plan due for nationwide rollout in January 2027.

What is MediAsas?

Only about 22% of Malaysians currently have medical and health insurance, or takaful coverage. That matters because the alternative is often brutally simple: without an insurer to absorb the cost, more of the bill falls on the individual.

According to BNM spokesmen at a MediAsas media briefing, 39% of healthcare expenditure is paid out-of-pocket, compared with just 8% through private insurance.

MediAsas is meant to provide a basic layer of protection in between. Malaysians who opt in can then decide whether they need additional top-ups or other products.

The policy can be thought of as an umbrella, but not necessarily the biggest one in the shop. Its purpose is to provide a basic layer of medical coverage to a broader segment of the population.

There are also limits to what that umbrella is designed to cover. It is not intended to replace existing high-limit medical cards, nor is it a national insurance scheme that will replace Malaysia’s public healthcare system.

“This is not a strategy to absolve spending on public healthcare. Public healthcare spending per capita is the highest it’s been, exceeding even pandemic levels,” a health ministry spokesman said.

As for price hikes that are less justifiable, that is where the broader RESET health reforms come in. Other measures like price transparency and better cost data will tackle how private healthcare is priced and paid for.

What does RM100,000 of cover really buy?

MediAsas Teras will offer RM100,000 in annual coverage for people below 60, rising to RM150,000 for those aged above 60. MediAsas Fleksi, meanwhile, offers RM300,000 in coverage.

That is a long way from the million-ringgit limits now common in the market. But the catch is that those bigger numbers come with a cost.

Medical insurance is paid for through premiums — the amount paid every month or year to keep coverage active. Generally, the more an insurer promises to pay out, the more it needs to collect in premiums.

The question is whether RM100,000 is enough to be useful. BNM’s data suggests that, for most cases, it is. In 2024, nearly 99% of claims paid were below RM60,000.

But the value of a medical plan is not just about how high the annual limit is. It is also about whether someone can access and keep that coverage.

People with pre-existing conditions can currently face exclusions, higher premiums or outright rejection. A health ministry representative said that under some existing products, even someone with single-vessel heart disease could be excluded from insurance altogether, including for unrelated illnesses.

“By and large, the existing private health insurance coverage is quite restrictive,” the representative said.

In contrast, MediAsas is designed to improve access to coverage for those with stable or well-managed pre-existing conditions, subject to underwriting, policy terms and any applicable exclusions.

It also comes with guaranteed renewal up to age 85 and no lifetime benefit limit, meaning getting older should not by itself shut a person out of coverage as long as they keep paying the premiums.

On the flipside, features such as the seven-year “no look-back” rule have raised questions. If an old condition was inadvertently left undisclosed, for instance, an insurer may still investigate a claim during the first seven years, subject to the policy terms.

After seven continuous years, claims generally cannot be contested on those grounds, although exceptions apply, including fraudulent, deliberate or reckless non-disclosure and certain pre-defined medical conditions.

The rule also does not automatically remove any specific exclusions attached to a policy. - FMT