(July 23): On July 6, the Joint Ministerial Committee on Private Healthcare Costs (JMC) announced MediAsas as the brand name of the Base Medical and Health Insurance and Takaful (MHIT) product.
In general, MediAsas is good public policy and a meaningful product, so Malaysians and Malaysia should welcome it. To elaborate, this op-ed explores the implications of MediAsas, how Malaysia can implement MediAsas more effectively, and how Malaysia can use MediAsas as the foundation stone for future reforms to our health system.
To recap, the Base MHIT is one of 11 Initiatives of the RESET Framework, announced in June 2025 by the JMC. The recent July 2026 MediAsas announcement contains more implementation details, following the January 2026 Base MHIT White Paper released by Bank Negara Malaysia, one of three co-leaders of the JMC alongside the Ministries of Finance and Health. Six Insurance and Takaful Operators (ITOs) will pilot MediAsas in 2026, to prepare for a nationwide launch in 2027; congratulations and thank you.
The implications of MediAsas
This author welcomes MediAsas as a new feature in Malaysia’s health system, focused on the private healthcare and insurance sector. As a (Base) MHIT product, MediAsas is different from most other currently available MHIT products in four main ways:
- The annual coverage limit of MediAsas Teras is (only) RM 100,000. Other MHIT products that have annual coverage limits that can go up to millions, with much higher premiums than MediAsas premiums that start at RM720/year for an individual aged 31-35. It is infinitely debatable whether RM100,000 is enough for catastrophic healthcare, but considering the median private hospital bill in 2024 is (only) RM5,695, RM 100,000 is enough for 17.5 median hospital admissions per year.
- MediAsas has deductibles (RM500 per disability for those less than 61 years old) and co-shares (20% for out-of-network hospitals). Other MHIT products mostly do not have deductibles or co-shares. Evidence from high-income countries with national insurance programs (e.g. Japan, Singapore and Switzerland) show that deductibles and co-shares typically reduce healthcare utilization and insurance premiums, sustained over decades.
- MediAsas is more affordable because it is a primary product de-linked from investment products. Other MHIT products are mainly investment-linked and are typically more expensive. More than 70% of MHIT plans are sold as riders to investment-linked products and not as “primary products”.
- MediAsas has mandated that individuals can enroll up to age 70 and remain protected up to age 85. Other MHIT products have varying (and usually lower) age limits, which shuts out older Malaysians from the private insurance market when they need it most.
- Although details have not been announced, Bank Negara’s White Paper has clearly stated that other new innovations will arrive soon: a standardized underwriting approach (so all ITOs will treat all policyholders to the same standard); a “no look-back” provision (to prevent claims from being denied on the grounds of prior medical conditions); limits to individual loading based on health status (to make individual risk-rating fairer); and portability (to allow policyholders to change from one ITO to another, similar to changing telcos while keeping phone numbers).
Although the JMC has not explicitly stated this, it is undeniable that healthcare inflation is multi-factorial and has no single magic solution.
Therefore, the system-wide RESET Framework is the most comprehensive and least imperfect set of solutions. By itself, MediAsas is conceptually strong and systematically necessary for sustainable health financing in Malaysia.
But MediAsas will be even stronger if implemented with the other 10 initiatives of the RESET Framework, such as payments based on Diagnosis-Related Groups (DRGs), inter-operable Electronic Medical Records and a common reporting framework similar to the International Patient Summary, and price transparency.
Seen in this light, MediAsas has several implications for Malaysia.
One, although MediAsas alone is a worthwhile initiative, it must be implemented powerfully alongside the other 10 RESET Framework Initiatives to multiply each other’s effects.
Two, as MediAsas itself may be the most visible and/or most politically contentious Initiative, it may be a lightning rod for politicians, civil society or armchair critics, so its implementers and ITOs must communicate effectively.
Three, as MediAsas is necessary but insufficient to reform our health system more broadly, it should be seen as a foundation stone for future reforms.
How can Malaysia implement MediAsas more effectively?
In the pilot phase in 2026, the Bank and ITOs can implement the following:
One, MediAsas should be marketed very effectively. The Bank can consider making it mandatory for all ITOs and their agents to first offer MediAsas to prospective policyholders, before offering other (more expensive) MHIT products. The sign-up process for all MHIT products can be digitalized, with an explicit opt-out check-box for all prospective policyholders to check, e.g., “I confirm that I have been offered MediAsas but I choose a different product”. And MediAsas should be the first (but not only) MHIT product visible on ITO websites.
Two, the Bank and ITOs can use aggregators to market MediAsas. For example, ride-hailing companies have a downloaded-app customer base in the millions, as do telco companies, large shopping malls, large grocery chains and even large retail F&B chains (e.g. bubble tea). Although MediAsas is more affordable than other products, there is the challenge of a still-large upfront premiums/contributions payment on Day One; some innovative fintech solutions like BNPL or earned wage access can help (all regulated by the Bank or the Consumer Credit Commission).
And three, the Bank can announce an “information roadmap” so consumers can plan for when more information will be announced. For example, information on optional wellness and preventive care packages will be announced in September 2026, information on outpatient coverage will be announced in October 2026, the no look-back policy confirmed (or not confirmed) before November 2026, elaboration on portability in December 2026 and elaboration on pre-existing conditions in January 2027. Such an information roadmap, even if heavily caveated, will help consumers plan and decide (and avoid information asymmetry).
In the launch phase in 2027, the other 10 Initiatives from the RESET Framework must be implemented in parallel to MediAsas. There are three pivotal components: billing transparency, DRGs and an independent Governance Board. For billing transparency, data sharing is a first step, but that data sharing must be systematic and routine, and not ad hoc one-off.
Once shared into some form of a central repository, that data must be cleaned and analyzed by neutral parties, without being weaponised by one party against another. Data is trust, and trust must be built and preserved over a long period of time.
For DRGs, the JMC must decide which specific department or unit will be the “national implementer and standards-setter for DRGs”.
At the moment, there appears to be at least three units inside the Health Ministry that are potential DRG focal points (excluding external consultants). DRG implementation, data harmonisation and its adjustments, exceptions and exclusions deserve a separate analysis.
And for the independent Governance Board announced in July 2026, there must be clear Terms of Reference for this Board, including potential regulatory and enforcement teeth (the Governance Board wasn’t announced in the June 2025 RESET Framework or January 2026 Base MHIT White Paper).
The JMC should state if this Governance Board is for MediAsas only, for the entire RESET Framework, or is the first step towards some form of a Private Healthcare Governance Board (which is bigger than RESET).
Or is this Governance Board the MHIT version of the Financial Markets Ombudsman Service? It’s actually a great idea to have a dedicated new “MHIT Ombudsman Service” to arbitrate, mediate or adjudicate (three separate concepts, each with its own pros and cons) between ITOs, hospitals and patients.
For the record, this author supports a new Health Reforms Commission accountable to Parliament with regulatory teeth and a 10-year limited term, with five-year mandatory reviews and a default transition into a steady-state Health Service Commission to cover both public and private healthcare.
The MediAsas Governance Board can be a step towards such a Health Reforms Commission or a separate MHIT Ombudsman Service.
How can Malaysia use MediAsas as the foundation for future reforms to our health system?
While MediAsas is good public policy and is a critical intervention, it is completely voluntary. In contrast, nearly all high-income countries (including MediShield in Singapore but except the United States) have mandatory health insurance.
Closer to Malaysia and in the middle-income countries of the Philippines (PhilHealth since 1995), Thailand (the three health schemes launched in 1980, 1990 and 2002) and Indonesia (BPJS since 2014), there is also mandatory population-wide health insurance.
This mandatory population-wide health insurance is called national health insurance, social health insurance or myriad other names, but are essentially run by non-profit health insurers.
The trajectory of the health systems of high-income countries and Malaysia’s own health system since the 1960s-70s eventually must converge on a diversified funding model.
Specifically, there is no “single perfect funding model”, and a hybrid combo is needed. Every debate about “the best funding model” is a useless debate, because all health systems need a hybrid model.
One, tax-based funding is pro-poor and high-equity, forming the base.
Two, (mandatory) national health insurance is pro-choice and risk-pooling, diversifying the base.
Three, private insurance and employer-sponsored insurance is pro-market and pro-competition, reducing the strain on the base funding.
And four, out-of-pocket payments should never be zero, and supports autonomy, dignity and speed. Only if taken together, all four funding sources can help Malaysia achieve Universal Health Coverage.
With the above in mind, there are three ways that Malaysia can use MediAsas as the foundation stone for future reforms, true to its “basic” name.
Firstly, MediAsas should be the stepping-stone towards a national health insurance or national health fund that gradually becomes mandatory in the formal economy over a five to 10-year period. This fund could be financed through a combination of public taxes, employer contributions, and scaled individual premiums, creating a single, powerful public buyer that can negotiate fair rates with both public and private hospitals.
This author proposes a gradually increasing salary deduction into the EPF, into a separate health savings account that can be used to purchase health insurance, e.g., an additional 0.5% of monthly salaries for two years, then 1% for two years and then 1.5% thereafter.
Secondly, if we don’t get a national health insurance or fund, MediAsas can at least pioneer a risk equalisation mechanism between private ITOs. A risk equalisation mechanism is a financial system that transfers money between ITOs to balance out the unequal costs of insuring healthy versus sick people.
In an open market, ITO X may end up with a pool of young and healthy customers, while ITO Y may end up with a pool of older and sicker customers.
Therefore, ITO X will transfer money into a central pool (perhaps managed by Bank Negara or the Governance Board), to be re-allocated to ITO Y to keep premiums fair for ITO Y.
For example, Australia, the Netherlands and Switzerland have risk equalization mechanisms. In Australia, the Risk Equalization Special Account is managed by the Australian Prudential Regulation Authority (APRA), the equivalent of Bank Negara in regulating banks and insurance companies. (The Australian central bank is the Reserve Bank of Australia, responsible for monetary policy and currency [not APRA]).
And thirdly, congratulations to the JMC, for bringing together three relevant agencies (Health, Finance and the Central Bank) to tackle a systemic and wicked problem. But perhaps one limitation in the JMC’s effectiveness lies in its name (and therefore its limited punca kuasa), Private Healthcare Costs.
Of course, Private Healthcare Costs are important, but the JMC should expand to also include “Increasing and Diversifying Sources of Funds” and “Right-siting Care to Reduce Costs and Improve Outcomes”.
Taken together (Reduce Cost + Increase Funding + Right-siting Care), the JMC would have a more complete punca kuasa to reform health financing in Malaysia.
And then that only leaves two more wicked problems in our health system: human capital (brain drain, contract doctors and fairer terms of service) and service delivery (how much public versus private, primary care versus hospital care, and the political economy of health).
Dr Khor Swee Kheng specialises in health systems and is CEO of Angsana Health