KUALA LUMPUR, August 12 — MediAsas has turned out to be a standard medical plan with usual exclusions of pre-existing conditions, after Bank Negara Malaysia (BNM) unveiled its product design.
The language in BNM’s 22-page FAQ on the “pilot” version of MediAsas – ahead of a planned public launch in January 2027 – clearly protects insurance and takaful operators (ITOs) that are fully underwriting the medical and health insurance/takaful (MHIT) product.
This is no surprise, given that BNM governor Abdul Rasheed Ghaffour previously told a Public Accounts Committee (PAC) inquiry that the central bank was mandated to protect the insurance industry.
Firstly, the government’s decision to replicate the same exclusions found in other medical plans – crucially, pre-existing conditions, congenital conditions, and mental disorders – shows that MediAsas is no different from commercial health insurance products in Malaysia.
MediAsas, which is individually risk-rated, also doesn’t guarantee enrolment of people with pre-existing conditions, seemingly leaving it to ITOs to decide whether to accept such individuals as customers, based on additional medical assessments to determine “insurability”, or how much premium-loading to charge.
The list of 35 mostly boiler-plate exclusions under MediAsas includes an apparently new exclusion – “treatments specifically for weight management” – that isn’t found in some other medical plans in the market, though some ITOs may already practise this exclusion for existing policyholders even if it’s not stated in product brochures.
With this specified exclusion under MediAsas, ITOs may choose not to cover GLP-1 and GIP/GLP-1 injectables, even though these therapies are clinically indicated for type 2 diabetes, besides weight loss. Doctors say the relationship between obesity and type 2 diabetes is causal, making such treatments especially effective.
Health Minister Dzulkefly Ahmad and BNM governor Abdul Rasheed previously touted a “no look-back” clause under MediAsas to protect consumers from ITOs’ demands for old medical records in a bid to deny claims over supposed pre-existing conditions.
But MediAsas imposes a moratorium of a whopping seven continuous years before ITOs are prohibited from contesting claims on the grounds of non-disclosure or misrepresentation.
Despite the long moratorium, the government still gave insurance companies additional wiggle room by inserting a condition that MediAsas claims can be rejected if the ITO establishes that non-disclosure or misrepresentation was “fraudulent, deliberate, or reckless”, or if the claim related to a Pre-Defined Medical Condition that existed before one purchased their policy or within a 30-day waiting period.
These conditions include all cancers, end-stage organ failure and transplant-related conditions, major cardiovascular conditions, major neurological disorders, and systemic autoimmune and inflammatory disorders.
BNM’s FAQ did not specify what exactly a seven-year moratorium means, such as whether MediAsas policyholders cannot submit any claim at all for the first seven years to be protected later from claim denials on the basis of pre-existing conditions. This would be much longer than the conventional (but unwritten) two-year waiting period.
MediAsas’ legal waiting periods are standard: 30 days for any disability and 120 days for specified illnesses. But specialists previously told CodeBlue’s October 2025 survey on health insurance that guarantee letters (GLs) were frequently denied for policies less than two years old, regardless of policy contracts.
The government doesn’t mandate medical check-ups for everyone who wishes to purchase MediAsas, relying instead on voluntary disclosures even though many Malaysians are unaware that they have non-communicable diseases (NCD) like diabetes, hypertension, or high cholesterol.
The Ministry of Health’s (MOH) own National Health and Morbidity Survey (2023) found that two in five adults with diabetes were unaware of their diabetic status. According to the Malaysian Society of Nephrology, only 5 per cent of people with chronic kidney disease (CKD) are aware that they have the disease, with most not knowing that they have the condition until they develop symptoms at the late stage. More than five million Malaysians are living with CKD.
The insurance industry’s disinclination to mandate medical check-ups for their own health insurance products is to avoid losing business because higher premiums would be charged if one were found to be unhealthy.
MediAsas placing the cost burden of pre-enrolment medical exams onto ITOs will further disincentivise insurance agents from demanding such tests from potential customers, who might later be punished with claim denials, even if they were unaware that they had a “pre-existing condition” or their chronic condition developed only after buying the policy. A pre-policy medical screening would prove that they didn’t have such a condition before enrolment.
Senior Citizens Still Vulnerable Under MediAsas
The government missed a golden opportunity to protect senior citizens with MediAsas. Instead, MediAsas is already expensive at the enrolment stage by charging more than RM500 monthly premiums for the elderly, along with an RM1,000 deductible per disability for those aged 60 years and older.
Despite the government’s frequent claims of “affordability” for MediAsas, the central bank’s own FAQ states that MediAsas premiums will increase with age and premiums aren’t guaranteed.
The FAQ explicitly gives ITOs the right to revise MediAsas premiums, or undertake repricing in line with medical costs or the claims experience, simply by giving policyholders a 30-day notice prior to their policy anniversary date, like typical private health insurance.
Notwithstanding MediAsas’ low RM150,000 annual limit for those aged 60 years and older, the Madani government could have created a game-changing product specifically for senior citizens with far lower premiums and limiting age-based premium revisions, since this group is completely priced out of the market.
MediAsas’ RM1,000 deductible for 60-somethings also doesn’t make sense, especially since retirees don’t have a regular source of income compared to working adults. The government ties this to the higher RM150,000 annual limit than the RM100,000 limit for younger people with RM500 deductible.
However, virtually all other medical plans in the market simply link deductibles with premiums, regardless of age or coverage. The higher the deductible, the lower the premium for anyone.
Like conventional medical plans, MediAsas allows enrolment until age 70.
So Many Copayments
One of the puzzling features of MediAsas is the sheer number of copayments that exceed those for conventional medical plans in the market.
Not only does MediAsas impose 20 per cent co-insurance/co-takaful (capped at RM3,000 per disability) for treatment at Out-of-Network Providers, the government-designed product also charges RM50 deductible per outpatient visit for its outpatient illness treatment benefit under MediAsas Teras for dengue fever, influenza A, influenza B, bronchitis, and pneumonia/bronchopneumonia, limited to the outpatient department of hospitals.
The outpatient illness treatment benefit under both MediAsas Teras (RM100,000/RM150,000 annual limit) and MediAsas Fleksi (RM300,000 annual limit) is capped at RM3,000 per year, unlike other medical plans in the market that simply cover this benefit as charged, subject to annual limit.
Cost-sharing and capping outpatient treatment contradict the government’s promotion of outpatient care to reduce health care costs and may instead incentivise policyholders to seek costlier (but covered) hospital admission.
Disturbingly, the government isn’t waiving copayments (deductible and co-insurance/co-takaful) for emergency cases under the MediAsas Fleksi plan with RM10,000/RM15,000 deductible (for treatment at Preferred In-Network Providers and Out-of-Network providers respectively). This copayment waiver only applies to MediAsas Teras.
As it is, RM10,000 and RM15,000 deductibles are very rare in the private health insurance market because such high amounts to be paid upfront before the plan takes care of the remaining eligible expenses don’t make business sense.
The huge RM10,000 to RM15,000 deductibles do not even come with dirt cheap premiums for MediAsas Fleksi. According to BNM’s White Paper, this plan is only cheaper by RM30 to RM50 monthly than the standard plan for those aged 31 to 35 years (these rates aren’t mentioned in the FAQ).
A person with suspected dengue, for example, might as well get admitted to a hospital as a cash-paying patient (without being limited to an outpatient GL as an insurance patient) and pay the hospital bill that would most likely not exceed RM10,000 or RM15,000.
Limiting the outpatient illness treatment benefit to RM3,000 per year – much lower than RM10,000/RM15,000 deductible – means that MediAsas Fleksi won’t reimburse that benefit at all, unless policyholders previously used their deductible for multiple hospital admissions in the same year.
If the government insists on not waiving MediAsas Fleksi copayments for emergency cases, while retaining RM10,000/RM15,000 deductible, then BNM and MOH, along with participating ITOs and their insurance agents, must highlight this non-waiver and high deductibles in promotions of the product.
Otherwise, the government should be held legally responsible for any morbidity or mortality resulting from delays of emergency treatment when MediAsas policyholders can’t afford to fork out that money upfront.
According to BNM’s FAQ, MediAsas may further impose up to 20 per cent co-insurance/co-takaful on the cost of specified cancer drugs, according to a Cancer Drug List, for both inpatient and outpatient care. This seems discriminatory against cancer patients, especially since cancer treatment can be very expensive and is one of the reasons why people take up insurance in the first place.
Overall, MediAsas copayments appear to do nothing more than punish consumers, without any higher purpose of moving care out of hospital wards or reducing the cost of insurance.
Perhaps the one positive thing about MediAsas (for consumers) is that the medical plan doesn’t gatekeep care, allowing policyholders to self-refer to specialists or hospitals without additional copayments.
MediAsas covers the cost of general practitioner (GP) referrals for hospitalisation, but without gatekeeping, Malaysians are likely to go straight to a hospital, perceiving it to be faster than seeing a GP first.
MediAsas doesn’t offer a no-claim bonus benefit, contradicting the government’s verbal statements about the importance of primary and preventive care. A no-claim bonus could have been offered in the form of credit, say RM2,000 annually, that can be used in totality every year for health screenings, vaccinations, and GP visits for mild illness, compared to commercial medical plans that severely restrict utilisations of a generous no-claim bonus.
If MediAsas had offered a no-claim bonus that covered primary care, the government could put its money where its mouth is by providing a much higher limit of, say, RM200 per GP visit for consultation and medication, instead of an RM50 limit by a particular insurer for its new medical plan. RM200 can comprise RM100 plus for drugs and RM80 for consultation, the new GP fee ceiling that Dzulkefly previously described as safeguarding the sustainability of private GP clinics.
Another missed opportunity.
Unfounded Room-Sharing Benefit, Missing Outpatient Kidney Dialysis Benefit
MediAsas’ room and board (R&B) benefit is only room-sharing. Although this may make sense to the general public for a basic MHIT product, the central bank should be well aware – especially after the 2025 PAC inquiry into health insurance and private hospital charges – that the real drivers of medical costs are from cross-subsidies practised by hospitals.
R&B of RM200 or RM300 a night – standard for many conventional medical plans – is a fraction of a hospital bill comprising consumables, medical supplies, medical devices, lab investigations, medicines, and nursing care that are marked up to cover hospital operation costs that aren’t charged directly to a patient, like equipment maintenance.
So there’s no good reason why MediAsas policyholders shouldn’t get the benefit of a private room that wouldn’t cost an ITO an arm and a leg.
A glaring omission with MediAsas is the lack of an outpatient kidney dialysis treatment benefit, offering only an outpatient cancer treatment benefit. Many commercial medical plans offer both.
According to the Malaysian Dialysis and Transplant Registry 2024, the country had about 49,000 haemodialysis patients at the end of 2024. More than half of about 55,000 end-stage kidney disease (ESKD) patients are treated in private dialysis centres, with public centres comprising only 28 per cent and NGO centres another 16 per cent.
Applying pre-authorisation requirements for GL issuance under MediAsas for cashless access to panel hospitals is par for the course, like standard health insurance products.
MediAsas requiring complete submission of documents for timely claims processing is also standard.
Conclusion: MediAsas ‘Not A Game-Changer’
BNM’s pilot FAQ has established that MediAsas is simply a regular private health insurance product, with standard exclusions and discretion for ITOs to approve or deny claims, or accept or reject potential subscribers, as they see fit.
In that case, the rather expensive MediAsas with RM60 to RM550 monthly premium for a low annual limit of RM100,000 and basic benefits can be directly compared with conventional medical plans that are comparably priced but have far higher annual coverage of more than RM1 million, or even RM3 million, besides a wide array of benefits.
If a particular ITO is informally known for frequently denying claims under other medical plans, then that same ITO underwriting MediAsas will probably apply the same protocols to the government-designed product.
The government has often stressed that MediAsas is a standalone medical plan, compared to most products in the market that are sold as riders attached to investment-linked products.
But the government’s contention that MediAsas’ standalone feature means that the product will be more sustainable over time remains just that: a bare assertion, until it is proven over time.
BNM’s FAQ touts “defined” benefits and limits, cost-sharing features, and cost-control mechanisms like a diagnosis-related groups (DRG) reimbursement system for MediAsas to “support affordability and better manage premium/contribution increases over time”.
The central bank also highlights “prescribed” covered drugs/devices based on effectiveness assessed by MOH. If this means that MediAsas policyholders can only get access to generic drugs and cheap medical devices or equipment, then they might as well save their money and go to a government hospital.
On supposed “broader risk pooling”, health financing expert Prof Emeritus Dr Syed Mohamed Aljunid Syed Aljunid previously criticised MediAsas for further fragmenting the country’s pool of resources, as he called for mandatory national health insurance instead.
The DRG system isn’t new. Universiti Malaya Medical Centre (UMMC) implemented it in 2020, saying the reimbursement mechanism vastly improved its efficiency and quality of care. Despite DRG, the university hospital still raised patient fees for consultation and admission by up to 233 per cent in January 2025.
What this shows is that cost efficiency with DRG isn’t necessarily the same as reducing the size of a hospital bill. If tertiary care costs that much, it costs that much. In other words, no matter the type of payment system – whether DRG or fee-for-service – a medical claim may still be large, and the number of claims may still be a lot.
BNM granting ITOs the right to revise premiums at any time shows the government’s lack of confidence in MediAsas remaining affordable in future despite cost-control mechanisms. Otherwise, premium rates would have been set in stone throughout a policyholder’s lifespan at the time of purchase.
Finally, the conventional two-year contestability period for medical plans (or is it seven years with MediAsas?) means that the effectiveness of MediAsas can only be seen after 2029 if the product is launched for the public in January 2027.
This will be well after the 16th general election due by February 2028.
The architects of MediAsas may not be in office in 2029 to take responsibility for the unintended consequences of a policy measure that touted a “Reset” but ended up as an inferior typical private health insurance product, especially if Malaysians drain their already meagre Employees Provident Fund (EPF) retirement savings for MediAsas.
The legalese in Bank Negara’s FAQ belies the way the Madani government acts as if MediAsas is the best thing since sliced bread.
“I think it’s disappointing that MediAsas is not a game-changer,” Bukit Gasing state assemblyman Rajiv Rishyakaran told CodeBlue yesterday.
“It’s not a terrible product, but it’s standard, non-game-changing. It’s not necessary to scoff at it. But after hundreds if not thousands of hours into whatever discussions they did, they ended up with standard health insurance.”
