KUALA LUMPUR, Jan 23 — The base medical and health insurance/takaful (MHIT) plan designed by the government risks shifting costs back to patients without addressing the root drivers of medical inflation, said the Galen Centre for Health and Social Policy.
Galen Centre chief executive Azrul Mohd Khalib noted that weak or absent regulation of pricing, limited disclosure of fees, variation in clinical practice, rising costs of medical consumables, technology and expertise, and increasing domestic and international demand have led to escalating private hospital bills.
“The current design of the Base MHIT, as outlined in its White Paper, is heavily dependent on the participation of private health insurance and takaful (ITOs) players and voluntary premium payments by the public,” said Azrul in a statement today.
“It risks creating a false sense of security, widening inequities in access to care, and shifting costs back onto patients, especially households already strained by rising living costs.”
Azrul warned that without stronger consumer protection bodies like a Private Health Care Commission to oversee health insurance premiums and private health care charges, the plan may unintentionally normalise higher out-of-pocket spending as a “new standard”, undermining the goal of affordability.
“Those enrolled in the base MHIT product will eventually end up in the public health care system.”
According to the White Paper on the base MHIT, part of the Reset strategy by the Ministry of Health (MOH), Ministry of Finance (MOF), and Bank Negara Malaysia (BNM), the base MHIT comprises a Standard Plan and a Standard-Plus Plan.
The Standard Plan has an annual policy limit of RM100,000 (RM150,000 for those above the age of 60) and comes with a deductible of RM500 per disability (RM1,000 at age 61 onwards). For out-of-network hospitals, an additional 20 per cent co-share, capped at RM3,000 per disability, is imposed.
The Standard-Plus Plan has an annual policy limit of RM300,000 and comes with a hefty deductible of RM10,000 to RM15,000, albeit with lower premiums than the Standard Plan.
Azrul criticised the tiered network design of the base MHIT plan, pointing out that this approach assumes that patients can always access appropriate care within the “preferred” network of hospitals.
“In reality, access is constrained by geography, capacity, waiting times, specialist availability, and hospital readiness, especially outside major urban centres or regions such as the Klang Valley,” he said.
“Malaysians should not be penalised through higher co-payments simply because the network does not include a suitable facility near them, or because critical services are unavailable where and when they are needed. This raises concerns of unequal access, where patients in less-served areas may systematically pay more for the same medical need.”
Base MHIT More Expensive Than Existing Plans, Unaffordable For Senior Citizens
The Galen Centre said a quick review of existing plans in the market showed that comparable health insurance products are already available and are, in fact, cheaper than the base MHIT plan with similar or even better coverage.
“Imposing deductibles between RM10,000 and RM15,000 for the Standard-plus plan while providing an annual policy limit of RM 300,000 is not competitive,” said Azrul.
“With no yearly cap to deductibles and co-payments, repeated health episodes will be financially catastrophic. The White Paper is also clear that the initial listed premiums are subject to review and repricing.”
Azrul added that while an RM100,000 or RM150,000 annual limit may cover many routine admissions, this is insufficient for complex or prolonged conditions like cancer, major cardiovascular events, kidney failure, complicated infections, or multi-disciplinary rehabilitation, especially if care is required across multiple episodes or months.
He further deemed the proposed premiums in the base MHIT plan as unaffordable for people aged 60 and above.
Under the Standard Plan, those aged 61 to 65 years face a monthly premium of RM280 to RM350, whereas those aged above 75 may be charged RM500 to RM780 monthly premiums.
“Cash subsidies should be offered to those over 60 and the unemployed who are seeking assistance under the Social Security Organisation’s (Socso) employment insurance system to co-pay for their premiums,” Azrul suggested.
Hospitalisation Considered Standard Of Care For Dengue, Pneumonia
The Galen Centre expressed shock at the government’s proposal to treat conditions like dengue and respiratory tract infections, such as pneumonia, as outpatient under the base MHIT plan.
He pointed out that hospitalisation, particularly for those of high risk, is considered the standard of care and is key to manage possibly severe and life-threatening complications that can arise rapidly.
“The risk is that Malaysians purchase the plan believing they are protected, only to discover that they are underinsured when illness strikes, forcing them back into out-of-pocket payments or public hospital queues,” said Azrul.
He said the base MHIT plan may be more attractive to those with existing insurance policies struggling with rising premiums, but may not attract the uninsured to begin with.
“As previously predicted, the repricing exercise caused more than 340,000 policies to be surrendered or terminated in 2024 and 2025. Getting those previous policyholders to sign on to the base MHIT and regain their coverage would be a major achievement.”