PETALING JAYA: Hope is growing around the government’s proposed Base Medical and Health Insurance/Takaful (MHIT) plan, particularly following assurances that Malaysians with pre-existing conditions will be included.
However, a consumer advocacy group and policy experts caution that the real test lies in whether the promise holds up in the fine print.
Federation of Malaysian Consumers Associations chief executive officer Saravanan Thambirajah said the commitment is “meaningful in principle” and signals a welcome shift in policy thinking for a group long excluded from private medical coverage or priced out by unaffordable premiums.
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“This has contributed to a growing number of Malaysians opting out of coverage altogether,” he said in an interview yesterday.
While it is still too early to assess how the pledge will translate into actual protection, Saravanan warned that inclusion could end up existing “in name but not in substance”.
“Without strong safeguards, coverage for pre-existing conditions could come with higher premiums, restrictive exclusions, lengthy waiting periods or benefit limits that are too low to meet real medical needs.
“Consumers may technically be insured but still face significant out-of-pocket expenses when they seek treatment,” he said.
He stressed the importance of clearly and legally defining terms such as “pre-existing condition” and “inclusion” within policy documents, rather than relying on broad public assurances.
“Ambiguity in definitions often leads to disputes at the point of claim,” he said, warning that a lack of clarity could undermine public trust in the scheme before it gains traction.
He said Bank Negara and the Health Ministry must set minimum standards for the Base MHIT product, including clear rules on premiums, exclusions, waiting periods and coverage limits that reflect current healthcare costs.
Saravanan also called for wider consultation ahead of the rollout and ongoing oversight to prevent the scheme from eventually fizzling out, including regular public reporting on premiums, claims and complaints.
“For people living with chronic illnesses, this is not merely a policy experiment but a matter of access to healthcare, financial security and dignity,” he said.
Health systems specialist Dr Khor Swee Kheng, chief executive officer of Angsana Health, said it is “ideal” for the Base MHIT product to cover Malaysians with pre-existing conditions, but doing so will require difficult policy choices.
“To achieve this may require some form of demand-side policy to mandate or strongly encourage enough Malaysians to purchase the Base MHIT to create a sufficiently large risk pool, a robust risk equalisation mechanism among private insurers to prevent cherry-picking of healthier individuals, or a mandate compelling insurers to cover pre-existing conditions.
“None of these options are easy to implement quickly,” he said.
Economist Prof Dr Yeah Kim Leng of Sunway University said sustainability remains the core challenge.
“Insurance is fundamentally about risk pooling,” he said, noting that the pooled fund must be able to sustain claims while remaining financially viable.
He cautioned that adverse selection, where higher-risk individuals are more likely to purchase insurance, could shrink the risk pool and push premiums higher, particularly if claim ratios rise.
Still, he said an affordable product could help ease congestion at public hospitals and clinics if more people are able to seek treatment in the private sector.
Economist and policy specialist Dr Geoffrey Williams, however, expressed concern about the scheme’s long-term viability if it becomes disproportionately attractive to those with costly medical conditions.
“If people with pre-existing conditions are allowed, this will be a very popular medical plan for sick people,” he said, warning that claims could rise faster than premiums can cover, potentially forcing government intervention.
He also cautioned against “moral hazard”, where expanded coverage could lead to higher utilisation and costs, leaving patients paying out of pocket once coverage limits are reached before returning to the public healthcare system.
Both Williams and Prof Yeah said the most difficult question is what “fair” basic coverage looks like when chronic illnesses are expensive to manage.
Prof Yeah added that high claims could rapidly deplete pooled funds if the scheme fails to strike the right balance between healthy and higher-risk contributors, while the public healthcare system must remain adequately resourced for those who continue to fall through the cracks.
