If you have recently started paying attention to medical insurance premium adjustments or received a medical card premium increase notice from your insurer, the following points are definitely worth clarifying first. The Medical and Health Insurance/Takaful (MHIT) reform promoted by Bank Negara Malaysia (BNM) in recent years is profoundly changing Malaysia’s medical insurance ecosystem. This article will analyse the new regulations for you and teach you how to restructure your existing coverage through a five-step “RESET Strategy”.
In simple terms, the MHIT reform is a series of regulatory frameworks introduced by Bank Negara Malaysia (BNM) to address the year-on-year rise in medical inflation in Malaysia. MHIT stands for Medical and Health Insurance/Takaful. The main objective of this reform is to ensure the long-term sustainability of the private medical insurance market, so that the public can still afford medical card premiums in the future.
In recent years, medical costs in private hospitals have continued to rise, causing insurers to frequently increase premiums. To break this vicious cycle, Bank Negara Malaysia, together with the Ministry of Health (MOH) and the Ministry of Finance (MOF), has jointly promoted reforms, requiring insurers to adjust product structures so that medical cost growth returns to a reasonable level.
The co-payment mechanism is the most important part of the new medical insurance regulations. Bank Negara Malaysia requires insurers to offer medical card plans with co-payment options, allowing consumers to bear a small portion of medical expenses in exchange for lower and more stable annual premiums.
In addition to introducing the co-payment mechanism, the new regulations also impose strict rules on medical card pricing and renewal conditions. Bank Negara Malaysia requires insurers to have sufficient data support when raising premiums and to improve pricing transparency.
Faced with the wave of medical card premium increases and market reshuffling, policyholders do not need to panic. Instead, they should proactively adopt the “RESET Strategy” to restructure their policies. The “RESET Strategy” is a systematic review method that helps you objectively assess your current financial situation and effectively utilise the newly launched co-payment medical cards to optimise your protection portfolio.
The “RESET Strategy” consists of five review steps formed by the first letters of five English words. This method aims to help you objectively evaluate your existing financial position and make good use of the new co-payment medical cards to optimise your coverage combination.
To effectively respond to the new regulations and restructure your medical card, you can follow these five specific steps (RESET Five-Step Method) one by one:
What many people are most concerned about is whether their medical cards bought many years ago will be forcibly changed. The answer is no. Existing full reimbursement (Zero Co-payment) policies remain valid, but you need to be mentally prepared that future premium increase rates may be higher.
Insurers cannot force existing customers to convert old policies to co-payment plans, but to encourage policyholders to reduce claims pressure on the risk pool, many companies will offer conversion options.
| Comparison Item | Existing Full Reimbursement Medical Card (Zero Co-payment) | New Co-payment Medical Card |
| Out-of-pocket Expenses | No out-of-pocket; fully reimbursed by insurer | Bear a fixed percentage (e.g. 10%), subject to maximum cap |
| Premium Level | Higher, higher risk of future increases | Lower (can be 19%–68% cheaper), relatively stable increases |
| Conversion Flexibility | Can voluntarily convert to co-payment plan | New standard option promoted by Bank Negara Malaysia |
| Suitable For | People with sufficient budget who don’t want to pay any cash during hospitalisation | People who want to reduce annual premium burden and have certain emergency reserves |
Will existing medical cards be forcibly converted to Co-payment plans?
No. Bank Negara Malaysia’s policy has no retrospective mandatory force. Insurers cannot force existing customers to convert their policies. Your old (full reimbursement) policy remains valid, but insurers will encourage and provide options for you to voluntarily convert to save on premiums.
Do I still need to pay co-payment if hospitalised in an emergency?
Usually not required. According to the exemption clauses in Bank Negara Malaysia’s MHIT new regulations, co-payment is generally waived for emergency treatments, treatment at government medical institutions, and outpatient follow-ups for serious illnesses such as cancer or dialysis. Please refer to your specific policy terms for details.
Who is the RESET Strategy suitable for?
The RESET Strategy is very suitable for Malaysians who feel their current medical card premiums are too burdensome, have recently received significant premium increase notices, or want to re-optimise their personal insurance portfolio (e.g., saving on medical card premiums to strengthen critical illness coverage).
How does the Co-payment Maximum Cap Work?
The maximum cap is a ceiling amount set to protect policyholders. Suppose your co-payment is 10% with a maximum cap of RM3,000. If your medical bill is RM50,000, 10% would be RM5,000, but because of the cap, you only need to pay a maximum of RM3,000, and the remaining RM47,000 will be borne by the insurer.
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