MediAsas: What Malaysians need to know about the new basic medical insurance plan

KUALA LUMPUR, Nov 13 — Malaysians struggling with rising medical insurance premiums may have a more affordable option when MediAsas, a basic medical insurance and takaful plan, is rolled out nationwide in late January 2027.

Developed to widen access to basic medical protection, the plan will be supported by financial incentives announced under Budget 2027 to encourage more people to obtain coverage.

The measures are particularly relevant to workers whose employers do not provide medical insurance and policyholders finding it increasingly difficult to maintain their existing coverage because of rising premiums.

Here is what consumers should know about MediAsas and the additional measures introduced under Budget 2027.

Can existing medical insurance policyholders switch to MediAsas?

Yes, existing medical insurance and takaful policyholders can switch to MediAsas with their current insurer or takaful operator without undergoing fresh medical underwriting or serving new waiting periods.

This could be particularly useful for policyholders facing higher premiums following medical insurance repricing who want to retain medical protection but can no longer afford their existing coverage.

Bank Negara Malaysia (BNM) has encouraged existing policyholders to maintain their current policies until MediAsas becomes available, allowing them to consider switching if they wish.

Interim measures introduced by BNM currently limit annual premium adjustments arising from medical claims inflation to no more than 10 per cent for most policyholders, with these measures remaining in place until the end of 2026.

However, the 10 per cent limit applies specifically to adjustments arising from medical claims inflation and does not cover all possible reasons for premium increases.

The option to switch without fresh underwriting is intended to make it easier for existing customers to move to a more affordable basic plan without another assessment of their medical condition, although they must remain with the same insurance or takaful operator.

What makes MediAsas different from conventional medical insurance?

Unlike conventional medical insurance products, MediAsas is designed around a standardised package of medical protection, with participating insurers and takaful operators offering the same basic benefits and policy terms to make coverage easier to compare.

The plan is offered as a standalone product and is not linked to investment products.

Its annual coverage limit is RM100,000, rising to RM150,000 for individuals aged 61 and above.

A Standard-Plus option is also proposed, with a higher annual limit of RM300,000, although this comes with a higher deductible and lower premiums.

The coverage is designed to include common medical treatments and services such as hospital room and board, surgical procedures, hospital supplies, medication, day surgery, selected outpatient treatments and pre- and post-hospitalisation services.

Proposed outpatient coverage includes treatment for dengue, influenza A and B, bronchitis, pneumonia and bronchopneumonia, subject to final confirmation by BNM.

Individuals can purchase the plan up to the age of 70, with protection extending until they reach 85.

How does MediAsas intend to keep premiums affordable?

Besides standardising coverage, MediAsas incorporates cost-control measures intended to help keep premiums more stable over time.

One is a tiered co-payment arrangement, under which patients bear part of their medical costs through deductibles and, in certain circumstances, additional co-payments.

Under BNM’s proposed arrangement, the Standard plan has a deductible of RM500 per disability, rising to RM1,000 for individuals aged 61 and above.

Patients receiving treatment at designated in-network hospitals will not have to pay an additional percentage-based co-payment.

However, those seeking treatment at out-of-network hospitals will have to bear a 20 per cent co-payment, capped at RM3,000 per disability, on top of the deductible.

For the Standard-Plus option, BNM’s white paper identifies a higher deductible of between RM10,000 and RM15,000 as being considered.

A higher deductible means policyholders pay more of the initial medical costs themselves, allowing the plan to offer lower premiums while providing protection against larger hospital bills.

MediAsas will also progressively adopt the Diagnosis-Related Group (DRG) payment system.

Under this approach, hospitals receive a fixed payment for each patient episode based on standard diagnosis and treatment codes, rather than billing separately for every individual service.

The intention is to encourage hospitals to manage treatment costs while ensuring patients receive appropriate care.

BNM has published indicative monthly premium ranges for different age groups and coverage options, but these are preliminary estimates, with final premiums expected to be announced closer to the plan’s launch in 2027.

Figures are indicative target premiums for selected age groups, not confirmed prices.

Actual premiums will depend on factors including age, gender and health status, and will be subject to periodic reviews based on claims experience, medical inflation and any changes to the benefits covered.

What financial assistance does Budget 2027 offer?

Although MediAsas was developed before Budget 2027, the latest Budget introduced financial measures intended to make coverage more accessible and affordable.

These include:

• EPF savings: Members below 55 will be allowed to use their Akaun Sejahtera savings to pay MediAsas premiums.
• SME premium subsidy: The government will subsidise RM200 of the first-year premium for each eligible employee at small and medium enterprises (SMEs) with fewer than 75 workers, capped at 50 employees per company.
• RM40 million allocation: The government has allocated RM40 million to encourage medical coverage among employees of SMEs with fewer than 75 workers, particularly those with limited or no existing medical insurance or takaful protection.
• Tax relief: According to the Finance Ministry, premiums or contributions paid for MediAsas coverage purchased for individuals and their immediate family members will qualify for income tax relief.

The SME subsidy is expected to benefit up to 200,000 workers, particularly employees whose companies do not currently provide medical insurance as part of their employment benefits.

Who is eligible for MediAsas?

MediAsas is a voluntary medical insurance and takaful plan intended for Malaysians seeking access to private healthcare protection but who may find conventional medical insurance too expensive.

It is aimed at people who are currently uninsured as well as those looking for a more affordable alternative because of rising premiums or changes in their financial circumstances.

The plan is not a social insurance scheme and does not replace the public healthcare system, which will continue providing universal access to healthcare for Malaysians.

Those who require more extensive protection can continue to purchase other medical insurance products offering higher coverage limits and additional benefits.

When can Malaysians sign up?

MediAsas is scheduled for nationwide rollout in late January 2027.

A pilot programme involving six insurance and takaful operators and selected hospitals in the Klang Valley ran from the end of July until October 2026 to test operational arrangements, customer experience and implementation readiness.

The participating insurers and takaful operators will be announced closer to the nationwide rollout.

For consumers, the plan’s affordability will depend not only on its premiums but also on its coverage limits, deductible requirements, co-payment arrangements and the hospitals available within its network.