Govt launches landmark reforms to curb private healthcare costs and empower consumers

THE MADANI government has unveiled a sweeping set of measures to tackle rising private healthcare costs, including a White Paper on a standardised Base Medical and Health Insurance/Takaful (MHIT) plan, the launch of consumer guidance tools, and digital platforms to improve transparency and accessibility across the sector.

The announcements were made today by Finance Minister II Datuk Seri Amir Hamzah Azizan and Health Minister Datuk Seri Dr Dzulkefly Ahmad following a meeting of the Joint Ministerial Committee on Private Healthcare Costs (JBMKKS).

Dr Dzulkefly opened by recognising the wide spectrum of stakeholders involved, from private insurers and hospitals to doctors, academics, and NGOs, emphasising that the government’s approach represents a “whole-of-nation initiative” to enhance sustainability and access in private healthcare.

He acknowledged public concerns over rising premiums and financial barriers to care, asserting that the government is taking “concrete action” to address them.

“The road has not been an easy one. Meaningful progress has been possible due to a genuine commitment by the government and stakeholders to engage constructively on the many difficult issues involved,” Dr Dzulkefly said.

He highlighted that over the past nine months, the committee held more than 60 consultations with diverse groups and experts to shape its recommendations.

Meanwhile, Amir described the issue as part of a troubling global trend, noting that medical claims inflation has consistently outpaced general inflation, driving premiums higher for families and employers.

“If this trend continues unchecked, fewer individuals can afford protection than they do today. We cannot accept a scenario where this choice slips out of reach, becoming a luxury reserved only for the few,” he said.

He stressed that the RESET initiative is designed to expand access to private healthcare, not to force participation, providing Malaysians with a genuine choice alongside public services.

Central to the reforms is the Base MHIT plan, a voluntary, standardised option for individuals seeking private coverage.

The plan complements the public healthcare system, which continues to underpin universal coverage, supported by a record RM46.5 billion allocation for 2026.

The Base MHIT plan incorporates a phased Diagnosis-Related Group (DRG) payment model to enhance cost transparency, reward high-quality care, and minimise unnecessary hospital admissions.

Initially covering common conditions and treatments, the scheme keeps premiums affordable while allowing insurers to offer additional coverage for those who need it.

Surveys indicated that 87% of respondents found the plan meaningful and attractive.

Bank Negara Malaysia will strengthen regulation of all medical insurance products to align with the principles of the Base MHIT plan, ensuring consumer protection and sustainable premiums.

The plan is slated for piloting in the second half of 2026, with a full rollout in early 2027, allowing policyholders to transition seamlessly without undergoing new medical underwriting.

Amir also announced tax incentives for private hospitals to establish Welfare Funds for underprivileged patients, expanding a framework first introduced in 2024.

He cited IHH Healthcare’s ‘Life Renewed’ programme, which has sponsored over 2,000 critical surgeries for patients in need, as a model for broader adoption.

Dr Dzulkefly highlighted tools to empower consumers, including the “MHIT Made Simple” Guide, a health insurance and takaful calculator, and published price ranges for 26 common medical procedures.

These resources aim to improve financial literacy, allow consumers to plan for premiums and co-payments, and increase transparency across private healthcare services.

The ministers stressed that modernising healthcare delivery, improving billing transparency, and integrating digital health records are essential to ensuring private healthcare remains affordable, efficient, and patient-centred.

“These reforms are about widening access and expanding choice. The public healthcare system remains the bedrock of our nation, and we will never waver in our commitment to universal access.

“By modernising the private sector, we ensure it remains a realistic, affordable option for those who choose it,” Dr Dzulkefly said.

Amir added: “To all consumers: we urge you to be aware of your rights and utilise the new tools and transparency aids being made available.

“To private hospitals and insurers: continue to bridge your historical divides; cooperation yields better results than conflict. To our doctors: patient care remains the heartbeat of everything we do.”

He commended the Consultative Council and industry partners for the progress achieved under RESET.

The ministers emphasised that the RESET initiatives mark the start of an ongoing transformation of Malaysia’s private healthcare sector, designed to deliver value-based care while supporting long-term sustainability and affordability for all Malaysians.

This new framework seeks to provide meaningful, affordable coverage, empower consumers to make informed decisions, and modernise the delivery of private healthcare, ensuring it complements the public system rather than competing with it, securing a sustainable healthcare ecosystem for the nation. - January 22, 2026