Bank Negara Malaysia (BNM) is introducing a new standardised health insurance product called the Base Medical and Health Insurance/Takaful (MHIT) plan, expected to be widely available from early 2027. It is a voluntary plan designed to give Malaysians a reliable baseline of financial protection against essential healthcare costs — at a price that is more sustainable long-term than the comprehensive plans many people currently hold.
What Is the Base MHIT Plan?
The Base MHIT plan is a standardised medical insurance product that all licensed insurers in Malaysia will be required to offer. “Standardised” means the core structure — what it covers, how the deductible works, and how limits are set — is defined by BNM, not left to each insurer to design differently. This makes it easier to compare, easier to understand, and harder to mis-sell.
The plan exists within Malaysia’s RESET strategy, a Joint Ministerial Committee on Private Healthcare Costs initiative to address the unsustainable rise in medical claims costs. You can read the official details at bnm.gov.my/-/mhitreset.
Key features:
- Two tiers: Standard Plan and Standard-Plus Plan, differing mainly in deductible size and target market
- Annual limit: RM 100,000 for most policyholders; RM 150,000 for those aged 60 and above
- Value-based co-payments: Co-pay amounts are tiered based on how efficiently a hospital manages its resources — you pay less when you choose a hospital that demonstrates efficient care
- Voluntary: No one is forced onto this plan; it sits alongside existing comprehensive products in the market
- Universal availability: Every licensed insurer must offer it, so you are not limited to one or two providers
Standard Plan vs Standard-Plus Plan: What’s the Difference?
The two tiers are designed for different needs and financial situations.
The Standard Plan carries a deductible of RM 500 to RM 1,000 per admission. This is the amount you pay out of pocket before the insurer covers the rest of the bill. For most Malaysians, this is a manageable one-off cost per hospitalisation — roughly equivalent to one or two months of the premium savings you would gain by choosing this plan over a zero-deductible product.
The Standard-Plus Plan carries a much higher deductible of RM 10,000 to RM 15,000 per admission. This tier is aimed at people who have the savings to absorb smaller and mid-sized medical bills on their own but want protection against truly large events — a major surgery, a serious illness requiring extended treatment, or a prolonged ICU stay. The trade-off is a significantly lower monthly premium.
Both tiers share the same annual limit structure: RM 100,000 standard, RM 150,000 for policyholders over 60.
If you are already familiar with how deductibles work in Malaysian medical insurance, the logic here is the same — you can read more on our deductible plans page. The Base MHIT plan simply standardises the concept and builds it into a product that every insurer must carry.
How Do the Co-Payments Work?
The co-payment structure in the Base MHIT plan is one of its more innovative features. Unlike a fixed co-pay that applies regardless of which hospital you visit, the Base MHIT plan uses a tiered co-payment system tied to hospital efficiency.
Hospitals that can demonstrate efficient resource use — shorter lengths of stay, appropriate treatment protocols, controlled costs — attract lower co-payments for patients. Hospitals that are less efficient attract higher co-payments. This creates a direct incentive for both hospitals and patients to make better choices.
The practical effect: if you choose a hospital that manages its costs well, your share of the bill is lower. If you choose a hospital with a track record of inflated or unnecessary costs, you bear more of that cost. It is a structural attempt to redirect private healthcare spending toward quality and efficiency rather than simply brand or convenience.
Why Is This Plan Being Introduced Now?
The short answer: the current system is not financially sustainable. Medical claims in Malaysia are rising at over 16% per year, driven by a combination of medical inflation, overservicing, and comprehensive coverage that removes almost all financial signals for cost-conscious behaviour.
The result has been a wave of premium repricing that has made existing plans unaffordable for many Malaysians. BNM’s data indicates that approximately 340,000 Malaysians have surrendered their medical insurance since 2024. The Base MHIT plan is designed to keep those people in private coverage with a product that is affordable, honest about its trade-offs, and structurally more sustainable.
It is not a downgrade disguised as reform. It is a deliberately designed product that gives Malaysians a real choice: pay more monthly for zero out-of-pocket costs at admission, or pay less monthly and absorb a defined, predictable amount per hospitalisation.
What Should You Do Before 2027?
You do not need to wait until 2027 to think about your options. The Base MHIT plan will create genuine alternatives in the market, but your existing plan still needs attention now — particularly if you have received a repricing notice or are finding your current premium difficult to sustain.
Steps worth taking today:
- Review your current plan — understand what your annual limit, deductible (if any), and co-payment obligations are right now. See our policy review service if you need help doing this.
- Check whether a deductible plan already suits you — some insurers already offer deductible-based plans that work similarly to the Base MHIT Standard Plan. You may not need to wait until 2027.
- Talk to an advisor before switching — your health declaration history matters. Switching plans is not always straightforward if you have pre-existing conditions. Get advice before you move.
Frequently Asked Questions
When will the Base MHIT plan be available in Malaysia?
BNM expects the Base MHIT plan to be widely available from early 2027. All licensed insurers and takaful operators will be required to offer it by that point. Some insurers may begin offering it earlier as they prepare their product lines.
Is the Base MHIT plan mandatory? Will my current plan be cancelled?
No. The Base MHIT plan is entirely voluntary. Your existing medical insurance plan will not be automatically cancelled or replaced. You choose whether to switch, supplement, or stay with your current product.
What does “value-based co-payment” mean in practice?
It means your co-payment at the point of claim depends on which hospital you go to and how efficiently that hospital is assessed to operate. Choosing a hospital with a strong efficiency rating results in a lower co-pay. The exact co-payment tables will be published closer to the plan’s launch date.
Will the Base MHIT plan cover all hospitals in Malaysia?
BNM has not published the final hospital panel for the Base MHIT plan as of mid-2026. The expectation is that it will cover a broad panel of private hospitals, with the co-payment tier varying by hospital efficiency rating. Public hospitals are covered separately under the existing public healthcare system.
Is the RM 100,000 annual limit enough?
For many standard hospitalisations — a surgery, a medical admission for an acute illness, a short ICU stay — RM 100,000 is adequate. Where it may fall short is for prolonged cancer treatment, complex cardiac procedures, or extended critical care. If your situation warrants higher coverage, the Base MHIT plan may not be your primary product, but it could serve as a cost-effective foundation alongside a top-up plan.
Have a question that wasn’t covered here? Our advisors at FINNO. offer free, no-obligation consultations — no hard sell, just honest answers about what’s right for your situation.