Healthcare affordability cannot be achieved by managing insurance premiums alone. It requires addressing the underlying drivers of healthcare costs while ensuring Malaysians continue to have meaningful access to private healthcare protection.
For many Malaysians, discussions about private healthcare affordability have become closely associated with rising medical insurance and takaful premiums. Every premium adjustment raises concerns that private healthcare is becoming increasingly difficult to access.
However, focusing only on premiums overlooks a more fundamental question: what is driving healthcare costs, and how can these costs be managed sustainably over the long term?
Over the past year, Malaysia has moved beyond diagnosing the problem. Through the RESET Strategy, the Ministry of Health, Ministry of Finance, Bank Negara Malaysia, healthcare providers, insurers and takaful operators have come together to address the underlying challenges affecting the private healthcare ecosystem. Rather than relying solely on premium adjustments, the RESET Strategy focuses on improving healthcare efficiency, strengthening accountability and ensuring that private healthcare remains both accessible and sustainable over the long term.
This direction is reinforced by the World Bank’s report of Malaysia’s medical and health insurance/takaful (MHIT) sector, which found that rising claims costs are driven largely by higher utilisation of healthcare services, accounting for about three-quarters of overall cost growth. These findings underscore an important point: long-term affordability cannot be achieved by focusing on insurance pricing. It requires reforms that improve how healthcare is delivered, financed and managed.
One of the most visible outcomes of RESET Strategy is MediAsas.
Rather than introducing another medical plan into an already complex market, MediAsas offers a standardised medical insurance and takaful plan that is designed to be simpler for consumers to understand while providing affordable and sustainable protection over time. MediAsas comprises of two plans, MediAsas Teras and MediAsas Fleksi — built on the same standardised base coverage. The plan is intended to provide a more affordable entry point into private medical protection, with indicative premiums starting from around RM60 per month to RM550 depending on age and plan type with eligibility enrolment up to age 70, and coverage continuing until age 85.
More importantly, MediAsas is designed differently which reflects a different approach to healthcare protection. It recognises that long-term affordability and sustainability require a broader solution – one that combines meaningful healthcare protection with features that encourage more responsible healthcare utilisation while supporting reforms that improve efficiency across the healthcare system.
The first is shared responsibility through cost-sharing.
Co-payment is designed to encourage greater awareness of healthcare costs by requiring patients to share a portion of the cost of care. This promotes more considered healthcare decisions and help reduce unnecessary utilisation of healthcare services.
More broadly, it reflects the need for a broader shift in mindset. As healthcare costs continue to rise and Malaysians live longer, healthcare must increasingly be viewed as something that should be planned and prepared for, much like retirement or their children's education. Insurance remains an important safeguard against major medical expenses, but personal responsibility and financial preparedness also have an important role to play.
Importantly, co-payment is not intended to shift costs indiscriminately to consumers. Rather, it seeks to strike a balance between meaningful healthcare protection, affordability and long-term sustainability, while preserving access to essential care.
The second is system-wide cost containment.
Unlike conventional insurance products that focus primarily on financing healthcare, MediAsas is supported by broader RESET Strategy reforms that improve how healthcare is delivered.
These include Diagnosis-Related Group (DRG) payment mechanisms, which encourage more efficient hospital payments based on patient’s medical condition and treatment rather than on every individual service provided. This creates a more transparent and consistent approach to hospital payments, encourages greater efficiency and reduces incentives for unnecessary treatment.
The interoperable Electronic Medical Records (EMR) further strengthen the healthcare system by enabling the secure sharing of relevant patient information across participating healthcare providers. This improves care coordination, reduces unnecessary duplication of tests and support more informed clinical decision-making.
In addition, preferred provider networks also play an important role by guiding patient towards hospitals that meet agreed standard of quality, efficiency and value. Helping them access quality care more cost-effectively.
Together, these measures are not designed to restrict access to care. Rather, they address some of the key drivers of rising healthcare costs, including over-utilisation of treatment, service inefficiencies and cost transparency. By better aligning incentives across patients, healthcare providers and insurers, MediAsas supports a more transparent, efficient and sustainable private healthcare ecosystem over the long term.
Beyond the above pillars, strong governance and accountability are essential.
Healthcare reform is a long-term journey, and the success of MediAsas will depend not only on its design but also on how it is governed and implemented over time. Continuous oversight and close collaboration across stakeholders will be critical to ensure the plan remains effective and sustainable as healthcare needs evolve.
To support this, Bank Negara Malaysia, the Ministry of Finance and the Ministry of Health are working together to establish an independent governance structure to oversee the ongoing implementation and administration of MediAsas. This will help ensure transparency, accountability and regular review of the plan over time.
Ultimately, this reflects an important shift in thinking. The challenge is not simply whether premiums should increase or decrease, but how Malaysia can ensure that private healthcare protection remains accessible, affordable and sustainable as healthcare needs evolve and demand continues to grow.
The success of MediAsas should therefore not be measured by the number of policies sold. Instead, it should be measured by whether more Malaysians are able to maintain access to essential healthcare protection over the long term. While no single initiative can solve the challenge of rising healthcare costs, MediAsas represents an important step toward a more accessible, transparent and sustainable private healthcare system.
This content is provided by Bank Negara Malaysia
The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.
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