The government will implement structural reforms to address rising inflation costs and improve transparency in the healthcare spending system, said Second Finance Minister Datuk Seri Amir Hamzah Azizan.
He said the reforms include introducing an affordable basic health protection product, the Medical and Health Insurance/Takaful (MHIT), by the end of next year.
“This gives us until the end of next year to roll out the basic MHIT product, which will broaden the current market offerings and ensure that a more accessible and comprehensive base product is available,” he said.
Amir Hamzah made the statement while winding up the 2026 Supply Bill (Budget) debate at the policy stage in Parliament today.
A joint committee chaired by the Ministry of Health (MOH) and the Ministry of Finance (MOF) has been established to carry out these reforms. The committee includes key stakeholders such as the insurance industry, Bank Negara Malaysia (BNM), the Malaysian Medical Association (MMA), and general practitioners (GPs) to ensure a holistic and sustainable approach.
“The government wants to carry out meaningful structural reforms so that we can control costs in the future with a better, long-term approach — not just patchwork solutions here and there,” he said.
He noted that the rising cost of medical inflation is a complex issue that requires collaboration among all stakeholders, including private hospitals and consumers.
Among the main reforms agreed upon are the implementation of the Diagnosis Related Group (DRG) system and Electronic Medical Records (EMR), which will improve transparency and curb cost escalation through outcome-based healthcare management.
“In line with the RESET strategy, efforts are being intensified to develop a value-based basic health protection product, expected to be launched by 2027, providing affordable coverage with more stable premiums,” he added.
Additionally, the government has agreed to expand existing insurance coverage to ensure more Malaysians gain access to health protection.
“The basic insurance protection will be announced by the end of next year. We’re also exploring potential financing mechanisms, possibly through the Employees Provident Fund (EPF),” he said.
Amir Hamzah stressed that long-term structural reforms are crucial to addressing the root causes of medical inflation, including issues related to private hospital cost structures, inconsistent clinical practices, and lack of transparency in medical charges.
He concluded that the government’s ultimate goal is to ensure that Malaysians enjoy quality, sustainable, and affordable healthcare protection.
