KUALA LUMPUR, March 25 — Dzulkefly Ahmad is promoting a new basic private health insurance product that the government plans to develop together with the industry as a way to curb medical inflation.
In an op-ed published by business paper The Edge yesterday, the health minister said this new “modernised voluntary private health insurance/takaful base product” will be developed by various government ministries and agencies together with industry and offered by existing private insurers and takaful operators.
“Ultimately, this can serve as the default option for Malaysians seeking private health care, which is open to all but targeted at private sector employees (including government-linked companies and small and medium enterprises) and their families, with these key elements,” Dzulkefly wrote.
“Life course coverage to protect you throughout your life course by incentivising early enrolment while young and healthy, with the commitment of a continuity strategy across employers, employment states and after retirement, and an actuarially sound pathway to include those with pre-existing conditions.
“Value-based health care will be the guiding paradigm and expressed through an evidence-based benefits package and formulary that prioritises cost-effective health technologies to ensure affordability and sustainability, and modernised payment systems that involve a phased transition away from inflationary fee-for-service (FFS) payments towards efficiency- and quality-enhancing DRGs (diagnosis-related groups).
“Care will be taken to ensure a considered, balanced and evidence-based approach towards generics, innovator, high-cost oncology drugs and robotic surgery.”
Dzulkefly said this new private health insurance product will utilise a “broad-based provider network”, including mid-priced private hospitals and non-profit hospitals, as well as the “soon-to-be-launched” Rakan KKM’s “premium economy” services by the Ministry of Health (MOH).
Deputy Prime Minister Ahmad Zahid Hamidi announced recently that Bank Negara Malaysia (BNM), the MOH, and the Employees Provident Fund (EPF) will develop basic health insurance and takaful products that purportedly emphasise value-based health care.
Dzulkefly wrote in his op-ed on The Edge that additional financing is also being explored with the Ministry of Finance (MOF) and EPF to optimise tax incentives for employers and employees, touting EPF’s i-Lindung platform, “potentially unlocking game-changing additional amounts of private financing, without burdening taxpayers and employers, or reducing employee take-home pay.”
Under i-Lindung, EPF contributors can buy insurance/ takaful products from insurance and takaful operators (ITOs) approved by EPF for themselves and their family members.
“As this base private health insurance/takaful product has not yet been given a name, suggestions are very welcome. Please use my Twitter handle @DrDzul,” said Dzulkefly.
In his article on The Edge, the health minister again touted the vague Rakan KKM without providing details on its business model, simply saying that the programme is in a pre-operationalisation phase and is scheduled to welcome its first patient later this year.
Rakan KKM, a public-private partnership with government-linked investment companies (GLICs), received RM25 million in Budget 2025.
MOF said in a press release last August that under the GEAR-uP programme, EPF will invest in “commercially viable sustainable health care solutions in partnership with the government, including building private wings in public hospitals.” This refers to Rakan KKM, as mentioned by Finance Minister II Amir Hamzah Azizan in a recent interview with The Star.
Dzulkefly wrote that the relative shift in hospital usage is actually trending towards private hospitals, citing a 42 per cent year-on-year increase in private hospital admissions from 2022 to 2023.
“The private sector initiatives outlined above work in tandem with our ongoing public health care strengthening efforts, including comprehensive digitisation and workforce optimisation. Innovative models like Rakan KKM, which are not dependent on the government budget, also free up financial resources in our public hospitals for remaining patients, thus ensuring more equitable resource distribution throughout the system.”
