This article first appeared in The Edge Malaysia Weekly on October 12, 2026 - October 18, 2026

Prime Minister Datuk Seri Anwar Ibrahim confirmed in his budget speech that MediAsas, a basic medical insurance and takaful plan, will be launched nationwide in January 2027.

Hospital payments will be based on diagnosis and treatment type, which should make bills more predictable and easier to control. Anwar said private hospital bills will use uniform, transparent charge categories from 2027 so that patients can see what they pay for.

The plan also targets the right problem. A World Bank April study on insurer-paid claims found that volume explained two-thirds of the rise in spending between 2022 and 2024. Cost-sharing and diagnosis-based payments are meant to curb this behaviour.

A fact that warrants scrutiny is that Employees Provident Fund (EPF) members below the age of 55 can pay MediAsas premiums from Akaun Sejahtera or Account 2.

Taken on its own, this is easy to defend. The account is, after all, intended for needs such as healthcare, and members have been able to purchase the EPF’s i-Lindung insurance using Account 2 savings since 2022. At the health minister’s indicative rate of RM65 a month, premiums would amount to RM780 a year, hardly enough to dent anyone’s retirement fund.

The issue is the habit it encourages. Since May 2024, EPF members under 55 have been able to withdraw savings from Akaun Fleksibel (Account 3) at their own discretion. By the end of May 2026, RM19.87 billion had been withdrawn, the Ministry of Finance told Parliament. Based on the EPF’s five-year average dividend rate of 5.88%, RM5,000 withdrawn today would grow to about RM15,700 over 20 years, assuming the rate is maintained.

The retirement pot is not in a position to lose any more. Only 38.3% of active formal sector Malaysian EPF members aged 18 to 60 had met their age-based basic savings target as at May 31, 2026, the deputy finance minister told Parliament.

There is a fair counter-argument. The EPF’s own survey found that most Akaun Fleksibel withdrawals went towards essentials and emergencies. For many households, it is a financial lifeline. But if people need an emergency fund, the answer lies in increasing wages, cheaper healthcare and proper safety nets, not in a retirement fund already short of its own target.

MediAsas should be the last new door for now. The government should state plainly that it will open no more withdrawal windows until more members reach basic savings, and it should review whether Akaun Fleksibel withdrawals should be on a needs basis.

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.