.png)
THE Government is embarking on one of its most ambitious public health overhauls in decades, with Prime Minister Dato’ Seri Anwar Ibrahim announcing a RM46.5 billion allocation to the Ministry of Health under Budget 2026. This marks an increase from RM45.3 billion this year, as the government moves to implement the core pillars of the National Health White Paper and the 13th Malaysia Plan.
In his speech to Parliament, Anwar said, “The health service demands a policy and holistic approach to untangle the complexities that have long plagued the sector.”
The government has identified six critical issues as focal points for healthcare reform in 2026.
First, the quality of public healthcare infrastructure will be significantly enhanced. All government hospitals and clinics will undergo maintenance and upgrades, with RM1.2 billion allocated for this purpose. An additional RM100 million will be spent upgrading district hospital wards. Outdated medical equipment will be replaced and new technology introduced in emerging specialisations, at a cost of RM755 million.
To support the digital transformation of healthcare, RM650 million from the Malaysian Communications and Multimedia Commission will be used to improve internet connectivity at public hospitals, health clinics, maternal and child health clinics, community clinics, and rural clinics.
Second, the government will address overcrowding in public hospitals. RM140 million has been earmarked to outsource patients to military, university, and private hospitals. Another RM30 million will empower public health clinics to offer specialist services in the community, reducing pressure on hospitals.
The government will also embark on a major expansion of healthcare facilities, including the construction of a Northern Region Cancer Centre in Kedah, new hospital blocks in Pontian (Johor), Banting and Sungai Buloh (Selangor), and an Advanced Surgical Block at USM Specialist Hospital in Kelantan. A Sabah Heart Centre will be developed at Queen Elizabeth II Hospital, while 13 new health clinics will be built nationwide, including in Machang, Teluk Kemang, Mukah, and Nabawan. Accelerated implementation is planned for the Kuching Cancer Centre and Sultanah Aminah Hospital 2 in Johor.
Third, efforts to mitigate rising medical costs will be strengthened. RM60 million in joint government-industry funding will support the introduction of affordable basic insurance products and the implementation of a Diagnosis Related Group (DRG) payment model.
To promote broader insurance coverage, the government proposes extending personal income tax relief of up to RM3,000 to cover insurance or takaful premiums for children. Full stamp duty exemptions on micro-insurance or takaful policies for individuals and MSMEs will be extended until 2028. The same applies to Perlindungan Tenang products.
In a new policy shift, private hospitals will be allowed to establish hospital welfare funds managed under a company limited by guarantee (CLBG) model. Donations to these funds will receive tax relief, and the funds themselves will be tax-exempt.
Employees Provident Fund contributors will be permitted to use savings from their Sejahtera Account to subscribe to basic medical and health insurance or takaful (MHIT) plans.
The government also reaffirmed its commitment to the MySalam scheme, which has paid out over RM1.2 billion in hospitalisation and critical illness claims to more than 1.7 million recipients. Anwar confirmed that MySalam will be extended into 2026 to support low-income groups.
Fourth, the welfare of healthcare professionals—particularly contract doctors—will be addressed.
Since 2023, the government has approved 1,500 additional permanent posts to absorb contract medical officers. Including annual intake, 12,900 doctors have been given permanent positions. Next year, another 4,500 contract doctors will be offered permanent roles.
This year, 833 contract nurses have been made permanent. In 2026, 935 graduates from the Ministry of Health’s training institutes will be appointed to permanent nursing roles.
After nearly two decades, consultation fees for general practitioners will be revised for the first time since 2006, from the current range of RM10–RM35 to RM10–RM80, allowing for service quality differentiation while maintaining affordable minimum rates.
Additionally, the On-Call Duty Allowance (ETAP) for medical officers, specialists, and dental officers—which has not been revised since 2011—will be increased by approximately 40 percent starting 1 October 2025. This will involve an additional annual allocation of RM120 million. For example, specialists working on public holidays will see their ETAP increase from RM250 to RM350.
Fifth, to ensure medicine security, the government will launch public-private partnerships focused on the production of essential medicines. This initiative aims to strengthen the resilience of national pharmaceutical supplies while enhancing the competitiveness of Malaysia’s local drug manufacturing industry.
Sixth, the Malaysia Healthy Agenda will be strengthened to improve long-term public health outcomes.
Excise duties on tobacco products will be increased effective 1 November 2025. Cigarettes will be taxed an additional 2 sen per stick, cigars and cheroots will increase by RM40 per kilogram, and heated tobacco products by RM20 per kilogram of tobacco content.
Simultaneously, the government will extend tax and duty exemptions on nicotine replacement therapy products—including nicotine mist and lozenges—until 31 December 2027.
To reduce alcohol accessibility and promote healthier lifestyles, excise duties on alcoholic beverages will rise by 10 percent starting 1 November 2025.
Additional revenue from tobacco and alcohol taxes will be channelled to the Ministry of Health to support its Lung Health Initiative, as well as diabetes and cardiovascular treatment programmes.
To further encourage prevention, tax relief for vaccination expenses will be expanded to cover all vaccines registered and approved by the Ministry of Health.
Anwar reaffirmed that these reforms were part of a larger effort to create an integrated, fair, and sustainable healthcare system where “quality care is accessible and affordable for all Malaysians.” - October 10, 2025
