Basic Medical And Health Insurance Plan In Development, Implementation Targeted For End-2026

Samuel Chua

31st July 2025 - 2 min read

A new basic Medical and Health Insurance/Takaful (MHIT) product is currently being developed as part of the government’s broader strategy to improve healthcare affordability. According to the Ministry of Finance (MOF), the conceptual framework for the MHIT product is expected to be completed by December 2025, with full implementation targeted for late 2026.

Product Design Still in Progress

The structure and features of the MHIT product have not yet been finalised. However, MOF confirmed that ongoing discussions with key stakeholders are taking place to refine the product’s design. These engagements are focused on ensuring that the MHIT offering remains both affordable and sustainable over the long term.

In a written response published on the Parliament of Malaysia’s website, the ministry stated that feedback gathered through these engagements will help shape the final policy.

Responding to Questions on EPF Usage

The update was in response to a question from Lumut MP and retired Navy Commander Nordin Ahmad Ismail. He had asked whether the government would consider allowing Employees Provident Fund (EPF) members to use their Account 2 savings to finance medical insurance or takaful, as well as how the new insurance proposal might help reduce medical expenses.

RESET Strategy Supports Healthcare Affordability

MHIT development is part of the government’s broader RESET strategy, which was introduced to address the rising cost of healthcare and improve access to private medical insurance. The strategy involves collaboration between Bank Negara Malaysia, the Ministry of Health, and the Ministry of Finance.

One of the key pillars of RESET is the enhancement of MHIT by offering a basic insurance or takaful product with more stable and sustainable long-term premiums.

Use of EPF Account 2 May Be Enabled via i-Lindung

MOF clarified that purchasing the MHIT product will be voluntary. Among the payment options being considered is the use of EPF Account 2 funds, although this is not the only available method. The ministry noted that EPF is prepared to review and potentially expand its i-Lindung facility to support Account 2 withdrawals for the MHIT product once its final design is confirmed.

Further details will be announced after the policy is finalised. For now, the development phase remains active, with a focus on affordability, accessibility, and long-term financial sustainability.

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