Monthly medical insurance costs could fall to around RM50 [PDF] for some Malaysians under the Base Medical and Health Insurance or Takaful plan, as newly released policy details outline how the long-announced scheme is expected to work in practice.

The design framework, published in the Base MHIT White Paper in January 2026, explains how the plan will be priced, what it will cover, and how out-of-pocket costs will be shared. A pilot phase is expected in the second half of 2026, with full market availability targeted for early 2027, subject to regulatory and operational readiness.

Rising Premiums Drive Demand For Lower-Cost Coverage

Private healthcare in Malaysia continues to rely heavily on direct household spending, exposing many families to sudden and significant medical bills. Medical insurance and takaful account for a relatively small share of overall healthcare funding, while premiums have increased sharply in recent years.

Between 2021 and 2024, repeated repricing exercises led to higher premiums for many policyholders, prompting hundreds of thousands to surrender their medical insurance policies. The Base MHIT Plan is intended to provide a more affordable and predictable baseline option, while supporting broader efforts to address medical inflation.

Target Groups For The Base MHIT Plan

The Base MHIT Plan is designed for Malaysians who do not currently have individual medical insurance, as well as those seeking a lower-cost alternative after repeated premium increases.

Coverage is available up to age 85, with enrolment allowed until age 70. Participation is voluntary, and premiums are paid by individuals rather than funded through a mandatory social insurance scheme.

Two Standardised Plans With Different Cost Structures

The framework introduces two standardised options. The Standard Plan prioritises lower out-of-pocket costs during hospitalisation but comes with higher monthly premiums. The Standard Plus Plan reduces monthly premiums by requiring policyholders to bear a larger deductible before coverage applies.

For adults aged 31 to 35, indicative monthly premiums range from RM80 to RM120 under the Standard Plan, compared with RM50 to RM70 under the Standard Plus option. Final premiums will be announced closer to launch following further actuarial review.

Core Medical Expenses Covered By The Plan

Coverage under the Base MHIT Plan focuses on essential private hospital care. This includes hospital room and board, surgery and anaesthetist fees, in-hospital doctor visits, intensive care, ambulance services, and medications linked to a treatment episode.

Immediate pre- and post-hospitalisation care is also covered, including consultations, diagnostic tests, medications, physiotherapy, and home nursing related to the hospital admission. Selected high-cost outpatient medicines for serious illnesses, such as cancer treatments listed by the Ministry of Health, are included.

Annual Limits Based On Common Treatment Costs

The Standard Plan comes with an annual coverage limit of RM100,000, calibrated to cover the vast majority of common private hospital treatment episodes based on recent claims data.

For individuals aged above 60, the annual limit automatically increases to RM150,000. The Standard Plus Plan offers a higher annual limit of RM300,000 but applies a deductible expected to range between RM10,000 and RM15,000 per hospitalisation episode.

Highly complex and extremely costly treatments are expected to continue being managed primarily within the public healthcare system, with the Base MHIT Plan acting as a complement rather than a replacement.

Hospital Networks Affect Out-Of-Pocket Spending

The Base MHIT Plan applies a two-tier co-payment structure linked to hospital networks. Treatment at designated in-network hospitals involves a lower deductible and no percentage co-payment, while treatment at out-of-network hospitals requires policyholders to share part of the bill, capped at a fixed amount.

As a result, total healthcare costs depend not only on monthly premiums but also on where treatment is sought, making emergency savings and cash flow planning an important consideration.

Measures Introduced To Improve Premium Stability

Premiums under the Base MHIT Plan will be set using actuarial principles and reviewed periodically. Pricing reflects age, gender, and health status, with safeguards such as limits on health-based loadings and broader risk pooling across insurers to reduce sharp increases over time.

The plan will be offered as a standalone medical policy and will not be linked to investment products, removing the risk of coverage being affected by market performance or fund withdrawals.

EPF Savings Can Be Used To Pay Premiums

Contributors will have the option to use savings from EPF Account Sejahtera to pay premiums for the Base MHIT Plan. This option is voluntary and not compulsory.

For consumers, this provides flexibility in managing monthly expenses, particularly for older individuals or those with irregular income, while also affecting how pre-retirement savings are allocated.

Easier Switching Between Insurance Plans

The Base MHIT Plan is intended to act as a common baseline across insurers. Insurers offering higher-tier medical plans will also be required to offer the Base MHIT Plan on a standalone basis.

This design lowers barriers for consumers who need to downgrade coverage, switch insurers, or move from employer-provided medical benefits to individual plans, reducing the risk of coverage gaps during job changes or retirement.

Preventive Care Offered As Optional Add-Ons

Wellness and preventive services, such as health screenings and vaccinations, will be available as optional add-ons at discounted rates rather than bundled into base premiums.

This approach allows consumers to manage preventive healthcare spending separately, while keeping monthly insurance costs lower.

Consumer Tools Support Better Healthcare Cost Planning

Meanwhile, efforts are also underway to help consumers plan and compare healthcare costs more effectively, alongside the rollout of the Base MHIT framework.

A health insurance and takaful calculator is expected to be launched in February, allowing Malaysians to estimate how much they need to set aside each month for premiums and co-payments across their coverage period. The tool is designed to support longer-term budgeting and financial planning, rather than short-term price comparison between insurance products.

Indicative price ranges for 26 common medical procedures at private hospitals have also been published. The information shows variations by location and age group, along with average lengths of hospital stay, helping patients anticipate potential expenses before seeking treatment.

The Financial Education Network has released a guide titled MHIT Made Simple to help consumers better understand medical insurance, select suitable coverage, and navigate the claims process with greater confidence. These resources will be available through the Financial Education Network’s website, mobile applications, and industry association platforms.

Healthcare Modernisation Extends Beyond Insurance Design

Further changes are planned as part of broader healthcare system modernisation efforts in 2026, running in parallel with the Base MHIT pilot.

These include a review of private healthcare licensing to encourage more cost-efficient care models, such as ambulatory care centres, while maintaining safety standards. Hospital billing practices are also set to be revised to improve clarity and transparency, allowing patients to better understand how charges are structured.

At the same time, expanded use of electronic medical records across public and private healthcare providers is expected to reduce duplicated tests and procedures, helping to lower unnecessary healthcare costs over time.

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