Bank Negara deputy governor Aznan Abdul Aziz explains why the base medical and health insurance/takaful (MHIT) plan marks the first step in tackling Malaysia’s healthcare challenges under the RESET initiatives.
Q1: Can you share what are the main concerns in discussions with the healthcare and insurance industries in managing rising medical costs?
Rising medical costs are a real concern for many Malaysian families. When insurance premiums increase, the impact is felt immediately at home, and we understand how concerning this can be. At Bank Negara Malaysia, we work closely with MOH, MOF, private hospitals, doctors, insurers, consumer groups, and other key stakeholders to ensure everyone is aligned. There is a shared understanding that medical inflation is a challenge we all face, and it requires us to work together to find solutions that benefit Malaysians.
Our discussions with these groups have highlighted three main concerns. First is affordability; premium increases, especially for older Malaysians, can make it harder for families to keep their coverage. Second is sustainability; we want insurance to remain accessible and reliable, not just today but well into the future. Third is ensuring our healthcare and insurance systems work well together; when changes occur in one area, they affect the other.
All parties agree that we need to keep medical costs in check without sacrificing the quality of care. Our goal is to make sure insurance continues to be something Malaysians can count on, not just for the next year, but for years to come. There’s also growing awareness that we can’t focus solely on one part of the system, such as holding back premium increases, without addressing the root causes elsewhere. If we do, we just shift the burden among providers, insurers, and patients, and that doesn’t solve anything in the long run.
We’re having ongoing conversations about how best to implement RESET and other reforms so we find the right balance. One thing is clear: keeping things as they are isn’t an option. Everyone, including hospitals, insurers, regulators, and doctors, will need to make some changes. We are committed to working together, with a practical mindset, to manage these challenges and keep private healthcare accessible and affordable for all Malaysians.
Ultimately, for the good of all Malaysians, we agree that the private healthcare system must become more accessible and sustainable. The focus is on ensuring the system works better for everyone, now and in the future. We’re dedicated to making this happen so that families can have peace of mind about their medical protection and care.
Q2: How significant will RESET be in shaping Malaysia’s private health insurance landscape over the next five years? What is the current progress?
The RESET initiative is a crucial step for Malaysia because it addresses the deeper, long-term challenges in our private health insurance system rather than focusing solely on short-term issues. Over the years, private medical insurance products have become more complex, with more features and higher coverage limits. While this has given people more choices, it has also made the system harder to understand and, at times, led to unpredictable premium increases. This complexity has sometimes left families worried about whether their medical coverage will remain affordable and what is and isn't covered.
RESET is our commitment to making things better. Our main goal is to bring more clarity, affordability, and confidence to private medical insurance. We want Malaysians to feel assured that their coverage is straightforward and reliable, not just today but in the years ahead. Hence, the introduction of the base MHIT plan. This plan is designed to offer a simpler, standardised option for medical insurance, making it easier for people to understand what they’re getting and to keep their coverage sustainable. But RESET is not limited to the MHIT plan. We’re also working on other important improvements, such as making prices more transparent and encouraging closer cooperation among key players, particularly hospitals, insurers, doctors, and regulators. These steps are all about making sure the system works better for everyone.
We know some are concerned that the new base MHIT plan may not go far enough to address rising medical costs or may appear less generous than some existing plans. It’s important to recognise that the base MHIT plan isn’t intended to solve every problem on its own. Instead, it’s a solid first step, something we’ll keep refining as we learn what works best and as more data becomes available. The idea is to change the way things have always been done, but it needs to work alongside other changes so that we can achieve better, more lasting outcomes for all Malaysians. Many existing plans may appear inexpensive at first, but over time their costs can rise quickly, especially when they offer higher limits and incentives that can drive up claims.
This is not a one-off change, but rather a gradual transition. Over the next few years, we aim to stabilise premium trends, so that private medical coverage remains something everyday Malaysians can count on. For this to happen, we must address the root causes driving up medical costs, not just tweak insurance products. That’s why RESET also includes efforts to increase price transparency and align incentives across the entire healthcare system.
In short, RESET, together with the MHIT plan and other ongoing reforms, is about building a private health insurance system that is fairer, clearer, and more sustainable for everyone. We are committed to working alongside all stakeholders to make this transition as smooth as possible, always putting the needs of Malaysian families at the centre of our efforts.
Q3: Could you share a brief overview of the base MHIT plan? What is the thinking behind it, and what can consumers/patients expect?
Many Malaysians are concerned about whether they’ll be able to afford private medical treatment in the years ahead and whether the insurance they’re paying for today will continue to protect them. That’s exactly why we’ve introduced the base MHIT plan.
The base MHIT plan is designed to give Malaysians a simple, reliable, and lasting option for private medical insurance. We wanted to create a plan that is clear and easy to understand; one that provides essential medical protection and remains affordable over time. This plan stands on its own and isn’t bundled with any investment product, so you know exactly what you’re paying for and what you’re getting.
The coverage under the base plan focuses on the most common and significant medical needs. We’ve set the annual limit at RM100,000, based on real data from local private hospitals. This amount covers roughly 99% of typical treatment episodes, so most Malaysians can be confident they’ll be protected if needed. By keeping coverage focused, we can make premiums more predictable and manageable.
It’s also important to say that this plan is meant to work alongside our public healthcare system. Public hospitals will always be the main safety net for all Malaysians. The base MHIT plan is simply another option for those who want extra peace of mind and the flexibility of private treatment. It includes features like co-payments and standardised benefits to encourage responsible use and avoid unnecessary costs.
We know that some people find current insurance plans complicated or are worried about rising premiums. The base MHIT plan is designed to be straightforward and stable, especially for those who want something they can keep up with year after year. It’s not meant to cover every possible scenario. Trying to do so would significantly increase premiums. Instead, it’s about providing meaningful coverage for what matters most while keeping costs sensible and delivering better patient outcomes.
Lastly, the base MHIT plan is not meant for everyone. It is designed for those who can afford private care but seek a plan that is simple, more predictable, and easier to sustain. Policyholders can still choose to buy extra coverage if they feel they need more. Our goal is to ensure Malaysians have a reliable option that helps them plan for the future, with less worry about unexpected changes in costs or coverage.
In short, the base MHIT plan reflects our commitment to keeping private healthcare accessible and sustainable for all. We want Malaysians to have peace of mind, knowing they have options that are built to last.
Q4: What measures are being introduced under the base MHIT plan to better support individuals with pre-existing medical conditions while maintaining long-term sustainability for all policyholders?
With the base MHIT plan, we aim to enable more inclusive access to medical insurance and takaful protection for individuals with stable, controlled pre‑existing medical conditions, without compromising the long-term sustainability of coverage for all policyholders. Today, such individuals face difficulties obtaining any form of insurance coverage, even when the risks to the broader pool could be contained.
Under the base MHIT plan, we are moving towards a more transparent and proportionate underwriting framework that widens access for people with stable, well‑managed conditions. This includes waiting periods that may apply to specific conditions, and clearer definitions of what is covered to ensure coverage remains within reach and grounded in fairness. These details are being developed in consultation with health professionals and ITOs to ensure we strike the right balance between inclusion and overall premium affordability. Again, it is important to stress that enhanced access to private healthcare aims to complement, not replace, the public healthcare system, which will continue to provide universal health coverage for all, including those with pre-existing conditions.
Another important step we are considering is a “no look-back” provision. This means that after a person has maintained continuous coverage for a set period, insurers may not deny claims solely because of pre-existing conditions. This gives policyholders greater certainty about the future, knowing their protection will not be withdrawn when they need it most.
Q5: There are concerns that steep premium increases may affect older age groups, potentially leading them to discontinue coverage when they need it most. What measures are being considered to mitigate this risk and ensure continued access to insurance?
As people grow older, it’s only natural that health worries become more frequent and, for many, regular income may no longer be as steady, especially after retirement. We know that facing large, sudden increases in insurance premiums can be overwhelming, and sometimes forces older Malaysians to give up their policies when they need it most. This concern has always been front and centre for us at Bank Negara Malaysia.
That’s why the base MHIT plan is designed to offer lasting affordability and protection that stays practical for policyholders as they age. We have put in place several features to help keep premiums more stable over time. First, premiums are structured by age, but we’ve ensured a reasonable balance between younger and older age groups. This helps flatten the curve and prevents sharp premium spikes later in life.
We also believe in looking out for one another. By pooling risks across a broader group, including all participating insurance and takaful operators, we help smooth out claims and keep premiums steady, especially for older Malaysians. Limits on how much an individual’s health status can affect their premiums, along with regular reviews by authorities, ensure that any changes are fair, measured, and based on clear evidence.
Our aim is simple: to support Malaysians maintain their coverage well into their golden years, without the worry of sudden, unaffordable changes. We want to make sure that protection remains accessible and fair, and that everyone can plan for their health with confidence.
Q6: With regards to delays or denials of insurance claims, it is understood from the reports that the Health and Finance ministries, together with Bank Negara, are looking into the matter. What are the outcomes of the engagements with stakeholders?
Delays or denials of insurance claims can be deeply stressful, especially when someone is facing a medical emergency or looking after a loved one. That’s why Bank Negara Malaysia, together with the Health and Finance Ministries, has been working closely with key partners, including the Malaysian Medical Association, the Association of Private Hospitals Malaysia, insurers, takaful operators, third-party administrators, and patient advocates through the Healthcare Partners Protocol & Solutions Committee (HPPSC) (previously known as the Grievance Mechanism Committee).
The HPPSC brings everyone to the same table, enabling honest conversations and the resolution of real problems together. Our aim is straightforward: to make the medical claims process fairer, clearer, and less burdensome for patients. We understand the anxiety and frustration that comes from “back-and-forth” between doctors, hospitals, and insurance providers. That’s why the committee focuses on strengthening cooperation and transparency, so patients aren’t left in limbo during what is already a difficult time.
Since reactivating the committee, several improvements have been implemented. We now have clearer, more consistent claims protocols, enhanced processes to streamline the issuance of Guarantee Letters, and improved communication channels. For instance, doctors can access dedicated hotlines to resolve treatment-related queries with insurers quickly. The Committee has also developed guidance on handling medical advancements that may not be clearly covered under existing policies, reducing confusion and providing greater certainty for patients and their families.
While the HPPSC does not get involved in individual disputes, it plays a crucial role in smoothing out processes and reducing bottlenecks that often lead to delays or misunderstandings. Our goal is to build trust and make the health financing system work better for everyone. We want Malaysians to feel confident that their claims will be handled fairly, and that support will be there when it matters most.
At the end of the day, we believe collaboration is key. By bringing together all stakeholders and keeping the lines of communication open, we’re making progress toward a system where patients spend less time worrying about paperwork and more time focusing on their health and recovery.
Q7: Policyholders often lack awareness of where to seek assistance for medical claim issues, and with ITOs not actively facilitating this process, what steps is BNM taking to bridge this gap? Furthermore, what redress channels are in place to ensure fair and timely resolution for policyholders?
Dealing with medical claims can be stressful, especially when someone is unwell or caring for a loved one. Our priority is to make it easier and clearer for policyholders to get help when they face any issues. We are strengthening communication requirements for insurers and takaful operators to ensure customers receive clear guidance from the moment they purchase a policy, throughout their treatment, and during the claims process, including situations when a claim is queried or disputed. No one should feel lost when seeking support for a medical claim.
If policyholders have concerns about their claims, we always encourage them to first reach out directly to their insurer or takaful operator, as many matters can be resolved quickly with proper clarification. Should the issue remain unresolved, policyholders can escalate the matter to BNMLINK, our dedicated service for public enquiries and complaints. For disputes that require independent review, the Financial Markets Ombudsman Service stands ready to provide impartial and timely resolution at no cost.
In addition, Bank Negara Malaysia, together with doctors, hospitals, insurers, takaful operators and other key partners, is working through the Healthcare Partners Protocol & Solutions Committee. This collaborative effort aims to close knowledge gaps and address long-standing pain points in the medical claims process, so that policyholders can expect a smoother and more transparent experience.
Our role is to ensure that these support channels are easily accessible and effective. Policyholders should feel confident that help is available and that their concerns will be addressed fairly. We remain committed to making the medical claims process clearer, more accessible, and less stressful for all Malaysians.
Q8: Many of the issues that have bubbled up recently tie to or relate to medical cost inflation, but public understanding of the matter is shaky, and there has also been quite a bit of blame-shifting. Cost transparency remains an issue. Can the RESET framework help?
We understand that medical cost inflation is weighing heavily on many Malaysians today. The rising cost of healthcare, whether it is felt through higher insurance premiums or inconsistent billing practices, has left many feeling anxious and, at times, confused about where these increases are coming from. We also recognise that it can be difficult for the public to make sense of the different explanations and to know who is responsible for what.
What is important to know is that these rising costs are not the result of any single party or a simple cause. Instead, they reflect a range of factors that have built up over time: how healthcare services are priced, how insurance products are structured, and the way payments move through the system. Sometimes, these arrangements create incentives that unintentionally push costs higher. This is why tackling medical cost inflation requires a whole-of-system approach, rather than pointing fingers.
This is where the RESET framework comes in. RESET was created specifically to address the root causes of rising costs in private healthcare. Its main purpose is to make the system clearer, fairer, and more sustainable for everyone. One of the key focus areas is enhancing price transparency by making it easier for patients to see and understand what they are being charged for, and why. For example, the Ministry of Health has started publishing drug price lists and the costs of common medical procedures in private hospitals. This gives patients, families, and insurers a clear reference point for typical expenses, reducing surprises when bills arrive.
We are also working with hospitals, doctors, insurers, and takaful operators to improve how bills are presented. The aim is to ensure that when you receive a bill, it is clear what you are paying for and there is less uncertainty about the charges. This helps Malaysians make better decisions about their care and plan ahead, while also encouraging everyone in the system to act responsibly.
While greater transparency alone will not solve all the challenges overnight, it is a crucial first step. It helps keep everyone accountable and supports informed choices for patients. RESET is about laying the groundwork for longer-term reforms while building a healthcare system that is more transparent and sustainable, so that private healthcare can continue to play its important role alongside our public hospitals.
Bank Negara Malaysia remains fully committed to working with all our partners to make healthcare more accessible and affordable for all Malaysians, now and into the future.
