PETALING JAYA: The government’s proposed basic health insurance scheme, aimed at cushioning Malaysians from rising medical costs, is still in the early stages of development.
It is understood that the scheme will be operated by private insurance companies and primarily target the M40 and T20 income groups that rely on private healthcare.
Finance Minister II Datuk Seri Amir Hamzah Azizan recently said the government is exploring the possibility of introducing a basic medical insurance plan to ease the public’s financial burden in the face of escalating healthcare expenses.
Federation of Malaysian Consumers Associations secretary-general Dr Saravanan Thambirajah described the proposal as a progressive step, provided that it is designed to improve access and affordability for all Malaysians.
“To genuinely serve the people, this scheme must not become just another commercial product that enriches private insurers or healthcare providers at the expense of consumers,” he said.
Saravanan stressed that the insurance plan must be treated as a public good, designed, managed, and enforced by the government with a strong emphasis on equity, transparency and affordability.
He also criticised the current state of private healthcare and insurance in Malaysia, saying both sectors operate with minimal oversight.
“Medical inflation continues to rise sharply because private hospitals are free to set their own fees with little scrutiny.
“Meanwhile, private insurance premiums increase disproportionately with age, often pricing out the elderly and those with pre-existing conditions,” he said.
To address this, Saravanan urged the Health Ministry to establish an independent and powerful regulatory body to oversee the private healthcare sector.
Such an agency, he said, must have the authority to set service price ceilings, standardise treatment costs, ensure fair billing, and mandate hospitals to publish their fees and provide clear cost estimates upfront.
Health economist Prof Dr Maznah Dahlui of Universiti Malaya said if the scheme is designed as a social or national health insurance programme, it could play a crucial role in sustaining the country’s healthcare system amid rising disease burdens and costs.
“But if it turns out to be just another form of private health insurance, we risk going down the path of the United States,” she said.
Dr Maznah called on the government to come up with a national health fund to ensure universal basic coverage, with the option for those who can afford it to top up with private insurance or out-of-pocket payments.
As for the B40 group, she said they can be subsidised by the government, if their medical expenses exceed the scheme’s coverage limit.
Dr Maznah also expressed concern over the decision to allow Employees Provident Fund savings to be used for private health insurance premiums instead of for social health insurance.
She said private insurance should only be paid for out-of-pocket or funded by employers.
Prof Dr Sharifa Ezat Wan Puteh, a health economics and public health specialist from Universiti Kebangsaan Malaysia, said the government’s idea is well intentioned but needs careful structuring.
“The issue is which bracket will be paying premiums, from which fund, and which income bracket will be subsidised through public fund?” she said.
Dr Sharifa stressed that the basic medical insurance should cover essential services, basic procedures, and access to secondary and tertiary care, with some co-payments.
She said if premiums are set too low, it could jeopardise the quality of care, with the low-income group affected the most.
