KUALA LUMPUR, Nov 4 — The government will implement structural reforms to address the issue of rising medical inflation and enhance transparency in the healthcare expenditure system, said Finance Minister II Datuk Seri Amir Hamzah Azizan.
This includes introducing an affordable basic medical and health insurance/takaful (MHIT) product by the end of next year.
"This gives us room until the end of next year to introduce the basic MHIT product, which will broaden the existing market offerings and ensure a better product base," he said when winding up the debate on the Supply Bill 2026 (Budget 2026) at the policy stage in the Dewan Rakyat today.
Amir added that a committee co-chaired by the Health Ministry (MOH) and the Finance Ministry (MOF) has been established to implement the reforms.
It involves all stakeholders, including the insurance industry, Bank Negara Malaysia (BNM), the Malaysian Medical Association (MMA), and general practitioners, to ensure a holistic approach is taken.
"The government wants to implement meaningful structural reforms so that we can control costs in the future through a more comprehensive approach involving all parties, ensuring that solutions are sustainable, and not merely patchwork measures," he said.
Amir noted that the issue of rising medical inflation is complex and requires the cooperation of all stakeholders, including private hospitals and consumers.
Among the key reforms agreed upon is the implementation of a more results-based Diagnosis-Related Groups (DRG) system and Electronic Medical Records (EMR) to improve transparency and contain rising costs.
In line with the Revamp, Enhance, Strengthen, Expand, and Transform (RESET) strategy, efforts are being intensified to develop value-based basic health protection products, expected to be offered by 2027.
"This is to provide affordable protection with more stable premiums," he said.
The government has also agreed to expand existing insurance coverage to ensure more people have access to healthcare protection.
“The base insurance cover will be released at the end of next year, and we will announce it then. We will also look at where the financing for the base cover will come from — perhaps we can consider using the Employees Provident Fund (EPF),” Amir said.
The minister said that long-term reforms are crucial to address the root causes of medical inflation, including private hospital cost structures, inconsistent clinical practices, and limited transparency in medical charges.
The government's primary goal is to ensure that people enjoy quality, sustainable, and affordable healthcare.
