Switching to a co-payment medical card can save you RM 100–RM 200 per month in premiums, and on Allianz’s plan you keep a 20% No Claim Benefit on top of that while you stay claim-free. For generally healthy Malaysians who hospitalise rarely, the maths works clearly in your favour. The question is whether you can absorb your share of a bill if you do need to go to hospital.
What Co-Payment Actually Means
Co-payment means you agree to share a fixed percentage of each hospital bill with your insurer. The insurer pays the rest. Typical co-payment tiers in Malaysia are 5% or 15% — and crucially, your share is capped each policy year. On Allianz’s plan, the 5% tier is capped at RM 1,000 per year and the 15% tier at RM 2,500 per year; above the cap, the insurer pays 100%.
So on a RM 30,000 hospitalisation bill:
- At 5% co-pay: 5% would be RM 1,500, but your annual cap limits your share to RM 1,000 — the insurer pays the remaining RM 29,000
- At 15% co-pay: 15% would be RM 4,500, but your annual cap limits your share to RM 2,500 — the insurer pays RM 27,500
In exchange for accepting this cost-sharing, your monthly premium is lower. The insurer bears less risk on every claim, so the price of coverage comes down.
This is different from a deductible, where you pay a fixed first amount per claim before the insurer steps in. With co-payment, you share a percentage of every bill regardless of size.
Why BNM Is Pushing Co-Payment
Malaysia’s medical inflation has been running at around 16% per year. This is not simply premiums rising — it reflects the genuine increase in the cost of hospital stays, surgical procedures, specialist consultations, and medication.
One factor driving this inflation is overutilisation. When medical bills are fully covered by insurance, there is less incentive for patients or hospitals to consider cost efficiency at the point of care. A patient who pays nothing for a hospital stay has no reason to choose a cost-effective treatment over an expensive one. A hospital billing a fully-insured patient has no pressure to keep costs reasonable.
Co-payment introduces a financial signal. When you share a percentage of every bill, you have a reason to ask whether a five-day hospitalisation stay is necessary, or whether a specialist referral is truly urgent. This is not about denying care — it is about engaging with cost decisions the way you would in any other part of your financial life.
BNM’s base MHIT (Medical and Health Insurance/Takaful) plan, being rolled out from 2026–2027, incorporates tiered co-payments based on hospital fee levels and pricing transparency. Tier 1 hospitals — those charging moderate fees with transparent pricing — carry no percentage co-share for policyholders. Tier 2 hospitals — premium or higher-cost facilities — attract a 20% co-share capped at RM 3,000 per disability. This creates a financial incentive for policyholders to choose more cost-transparent hospitals — which, over time, helps contain the medical costs that drive premium increases.
What Allianz’s Co-Payment Plan Looks Like in Practice
For Allianz policyholders, the HealthAssured co-insurance plan offers a well-structured example of how co-payment can work in your favour.
Beyond the lower monthly premium, HealthAssured includes a No Claim Benefit: an instant 20% discount on your Cost of Insurance that continues every year you stay claim-free. If you make a claim, the discount pauses for two years, then resumes once you have been claim-free for two consecutive years.
Consider what this looks like over two years for a policyholder who is generally healthy:
- A standard plan at RM 350/month: RM 4,200/year
- A co-payment plan at RM 250/month, with the 20% No Claim Benefit already applied to the Cost of Insurance: roughly RM 3,000/year — and that discount continues every year you stay claim-free
Over two claim-free years, the cumulative saving is roughly RM 2,400 compared to staying on the standard plan. That saving stays in your pocket — or in the emergency fund that covers you when you do eventually need to make a co-payment.
The Concern People Have: What If My Bill Is Large?
This is the right question to ask. A co-payment percentage on a very large bill can add up.
At 5% co-pay on a RM 50,000 bill — which would be a significant hospitalisation, such as a cardiac procedure or cancer treatment — 5% would be RM 2,500, but your share is capped at RM 1,000 for the policy year. You pay RM 1,000; the insurer covers RM 49,000. This annual cap is exactly what protects you on large claims.
At 15% co-pay on a RM 50,000 bill, 15% would be RM 7,500 — but your share is capped at RM 2,500 per policy year. On a RM 100,000 bill, it is still capped at RM 2,500. The cap means your worst-case out-of-pocket on the 15% tier is RM 2,500 in a year, no matter how large the bill.
The 5% co-pay tier is where the balance tips clearly in favour of most policyholders. The premium savings are meaningful, the 20% No Claim Benefit is real, and your maximum out-of-pocket contribution is capped at RM 1,000 a year even on a large claim.
Who Co-Payment Suits — and Who It Does Not
Co-payment is well-suited for:
- Generally healthy individuals who hospitalise infrequently
- People with an emergency fund that can absorb up to RM 2,500 (the annual cap on the 15% tier) on an occasional hospitalisation
- Policyholders whose current premium feels disproportionate to their actual claims history
- Anyone looking to control long-term insurance costs as premiums rise with age
Co-payment is less suitable for:
- People with chronic conditions who hospitalise frequently — co-payment contributions add up quickly across multiple annual admissions
- Those without an emergency fund to cover the co-pay portion if a claim arises
- Anyone whose family situation means they cannot absorb unexpected medical out-of-pocket costs
If you have a chronic condition that has required hospitalisation more than once in the past two years, a standard plan or a deductible-based plan may serve you better. A policy review can model the actual projected cost difference based on your claims history.
Frequently Asked Questions
Does co-payment apply to every single item on my hospital bill, or just certain items?
The co-payment percentage typically applies to the total eligible bill — the portion the insurer would normally cover. Some plans apply it to all covered items; others may have specific structures. Check your policy schedule carefully, and ask your advisor to walk you through a sample claim calculation before you switch.
How does the No Claim Benefit work year to year?
On Allianz’s HealthAssured, the No Claim Benefit is a flat 20% discount on the Cost of Insurance — applied instantly at sign-up (the Welcome Benefit) and maintained every year you stay claim-free. It does not stack higher over time. If you make a claim, the 20% discount pauses for two years; stay claim-free for two consecutive years and it is reinstated in the third year.
Can I switch back to a standard plan later if co-payment does not suit me?
In most cases, yes — but switching back to a standard (non-co-pay) plan may involve new underwriting or premium adjustments. It is not always a straightforward reversal. Before switching to co-payment, understand what switching back would involve so you are not locked into a structure that no longer fits your situation.
Does the co-payment apply if I use a panel hospital versus a non-panel hospital?
Some co-payment plans apply different co-pay rates depending on whether you use a panel hospital. Using a panel hospital may attract a lower co-payment (or none at all), while choosing a non-panel hospital triggers the standard co-payment rate. This is by design — it guides policyholders toward more cost-efficient facilities. Check the panel list for your plan before assuming your preferred hospital qualifies.
Will BNM’s base MHIT plan replace my existing medical card?
No. BNM’s base MHIT plan will be offered as an alternative option — you will not be automatically migrated. It is designed for policyholders who want a lower-premium option with built-in co-payment tiers. You can choose to stay on your existing plan, switch to the base MHIT, or continue with any other plan your insurer offers.
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.