Malaysia is trying to reform medical insurance, and one of the key proposals is MediAsas, a basic medical and health insurance or takaful product expected to launch in January 2027. The idea sounds reasonable. Create a more affordable medical insurance product for people who currently have no insurance, or for those who can no longer afford increasingly expensive medical cards. But there is a major problem. MediAsas may still exclude the very people who need health insurance the most.
A recent CodeBlue article highlights strong criticism from a Malaysian health financing expert, who argues that MediAsas should effectively go back to the drawing board. His biggest concern is pre-existing medical conditions. According to Bank Negara Malaysia’s pilot FAQ, MediAsas is a fully underwritten product. That means insurers can look at your medical history and decide whether to insure you, charge you more, or exclude particular medical conditions.
And this is where I think we need to ask a very basic question. What problem is MediAsas actually trying to solve?
If we are simply creating another private medical insurance product that mainly works well for healthy people, then we already have plenty of those. The people who have difficulty getting insurance are usually those who are older, have diabetes, hypertension, heart disease, cancer, kidney disease, or some other previous medical problem.
These are not small numbers. The National Health and Morbidity Survey 2023 found that about 29 per cent of Malaysian adults had hypertension and 33 per cent had high cholesterol. Around 2.3 million adults were living with at least three of four major chronic conditions examined in the survey.
So if people with pre-existing disease can still be excluded, loaded with substantially higher premiums, or have important conditions excluded from coverage, MediAsas risks reproducing one of the biggest weaknesses of conventional private medical insurance.
There is another controversial feature. The so-called “no look-back” provision only takes effect after seven continuous years of coverage. In simple terms, during those first seven years, questions about your medical history may potentially remain relevant when a claim is made. Even after seven years, there are exceptions. Claims may still be rejected in circumstances involving fraudulent, deliberate or reckless non-disclosure, and certain predefined medical conditions that existed before the policy started may remain excluded.
That seven-year period deserves much more public explanation. Consumers need to know exactly what “no look-back” means in practice. Does it genuinely give policyholders stronger protection? What happens when someone develops cancer three years after purchasing the policy? How far back can an insurer investigate? What constitutes reasonable non-disclosure as opposed to deliberate concealment?
These are not technical details. They determine whether someone gets a RM50,000 or RM100,000 hospital bill paid.
There was previously some suggestion that people with “stable and controlled” pre-existing conditions might be accepted under MediAsas. But according to the CodeBlue report, that wording does not appear in Bank Negara’s pilot FAQ. Instead, insurers and takaful operators appear to retain considerable discretion in determining whether someone with a declared pre-existing condition is insurable. The FAQ also reportedly does not specify a maximum amount by which premiums can be loaded.
This brings us to the bigger debate about what MediAsas is supposed to be.
Private insurance traditionally works by assessing risk. A healthy 25-year-old is a much cheaper person to insure than a 65-year-old with diabetes, hypertension and previous coronary disease. From an insurance company’s perspective, risk-based underwriting makes financial sense.
But health financing at a national level has a different objective.
If the purpose is to provide broad access to health care, you cannot simply separate society into profitable low-risk patients and expensive high-risk patients and send the latter back to the public hospitals.
That simply transfers the sickest and most expensive patients to the Ministry of Health while private insurers retain the healthier population.
The alternative is some form of risk pooling or community rating, where healthy people and sick people participate in the same system and risk is shared across a much larger population. That is much closer to the principle behind most universal health financing systems.
Of course, there is no free lunch here. If you remove exclusions for pre-existing disease, somebody has to pay for that additional risk. Premiums may rise. Government subsidies may be needed. Participation may have to be much broader, possibly even compulsory, because a voluntary system creates another problem. Healthy people may choose not to join until they become sick.
That is why health financing reform is difficult.
You cannot simultaneously demand very cheap premiums, voluntary participation, comprehensive benefits, coverage of pre-existing conditions and financial sustainability without making difficult choices about who ultimately pays.
MediAsas could still have a useful role. It might become an affordable entry-level or top-up medical insurance product. But we should be careful about presenting it as a solution to Malaysia’s wider health financing problem.
The real test of any national health financing reform is not how well it covers healthy people.
It is what happens when someone is 60 years old, has diabetes and hypertension, perhaps had cancer five years ago, and now wants health insurance.
Can that person get meaningful coverage at a price they can actually afford?
If the answer is no, then we have not solved the hardest part of health financing. We have simply created another medical insurance product.
And that, I think, is the fundamental question policymakers need to answer before MediAsas is rolled out nationally.
Ref: https://codeblue.galencentre.org/2026/08/expert-scrap-mediasas-for-excluding-pre-existing-conditions-seven-year-no-look-back/