KUALA LUMPUR, March 13 — The government is considering allowing Employees Provident Fund (EPF) contributors to use Akaun Sejahtera (Account 2) savings to pay premiums for the proposed Base Medical and Health Insurance and Takaful (MHIT).
The proposal would allow contributors to pay MHIT premiums through EPF’s i-Lindung platform, which currently offers protection products such as life and critical illness coverage under the Members Protection Facility (MPP).
In a Dewan Negara written reply on March 11, Finance Minister Anwar Ibrahim said the proposal to permit withdrawals from Akaun Sejahtera is still under consideration and would be implemented on a voluntary basis.
“The proposal to allow withdrawals from Akaun Sejahtera (Account 2) through i-Lindung is being studied on a voluntary basis and limited to accounts already designated for health and protection purposes,” Anwar said.
He was responding to Senator Rosni Sohar, who asked about the ministry’s assessment of the capability of the MHIT basic plan to enhance public protection, taking into account deductibles of RM10,000 to RM15,000 without an annual copayment limit, competitiveness compared with existing policies, and the implications of the proposed use of EPF savings for contributors’ retirement fund security.
Anwar stressed that savings in Akaun Persaraan (Account 1), which are reserved for retirement, would not be affected.
Akaun Sejahtera savings are already designated for medium-term needs such as medical expenses, education, housing, and other permitted withdrawals, subject to EPF conditions.
The ministry said individuals would remain responsible for paying Base MHIT premiums themselves.
High-Deductible MHIT Plan For Workers With Employer Coverage
Under the Base MHIT framework designed by Bank Negara Malaysia, the government is proposing two versions of the basic health insurance plan — a standard plan with an RM100,000 annual limit for under-60s and a “standard-plus” option with higher deductibles but lower premiums.
The standard-plus plan offers an annual coverage limit of RM300,000 but requires policyholders to pay a deductible of between RM10,000 and RM15,000 before insurance coverage begins.
Anwar said the higher deductible is intended to lower premiums by reducing insurers’ exposure to claims.
The plan is targeted at individuals who already have some form of employer-sponsored coverage or who are able to bear initial treatment costs.
“Higher deductibles allow premiums to be lower, consistent with lower claims risk,” Anwar said. The standard-plus plan is optional and not mandatory.
The standard MHIT plan carries significantly lower deductibles for hospital treatment within the insurer’s network.
Policyholders would pay a deductible of RM500 per disability for treatment at in-network hospitals, rising to RM1,000 at age 61. For treatment outside the hospital network, an additional 20 per cent co-payment would apply, capped at RM3,000.
The government said the design is intended to encourage more prudent use of health services while helping keep premiums affordable.
Premiums And Benefits To Be Standardised Across Insurers
Under the Base MHIT framework, benefit packages and premium rates will be standardised across all insurance and takaful operators offering the government-designed product.
The Finance Ministry said this approach would enable broader risk pooling and help stabilise premiums.
The government also intends to introduce stricter cost-control mechanisms under the scheme, including co-payments linked to hospital networks and greater coordination in health care purchasing.
The Base MHIT plan will also be structured as a pure protection product without investment-linked features, which the government said would make the insurance easier to understand and potentially more affordable.
The MHIT basic plan is scheduled to begin with a pilot programme in the second half of 2026, with full implementation targeted for early 2027.
Once fully implemented, existing insurance policyholders will be able to switch to the Base MHIT plan with their current insurer or takaful operator without undergoing new medical underwriting or serving new waiting periods.
EPF has welcomed the Base MHIT product, even though half of EPF members have less than RM50,000 in retirement savings, as warned by the Retirement Fund Inc (KWAP).
The Star reported earlier today experts as warning against allowing EPF Account 2 withdrawals to pay for the Base MHIT as this would weaken people’s safety nets for retirement.
