There is growing evidence that political economy factors are important for adopting health financing reforms, but there is little consensus about which political and institutional factors determine the results of reform proposals. This study examined efforts at health financing reform in Malaysia over 35 years, aiming to explain why health financing reforms were continuously proposed by the government but consistently blocked by opponents. Findings from this study argue that public backlash to reform proposals was the most important factor inhibiting changes to Malaysia’s health financing system, while interest group opposition was a closely related factor. This opposition was particularly powerful on political decisions.