Indonesia's state health insurer is raising its premiums by at least 65%

Indonesia's state health insurer is raising its premiums by at least 65% to plug a deficit expected to reach IDR32tn ($2.25bnn), reported Reuters.

BPJS Kesehatan (Social Insurance Administration Organisation for Health), which provides universal health coverage for over 200m people regularly books claims that far exceed premiums it collects, and the burden of supporting one of the world’s biggest health systems carries a fiscal risk for Southeast Asia’s largest economy.

The premium hike has its opponents. A parliamentary commission overseeing government finances has rejected the planned increase for the poor, which is going to be implemented through a presidential decree due to be issued soon.

Lawmakers ordered the government to seek other ways to control the insurer’s mounting cash problems in a hearing with the finance and health ministries, as well as BPJS executives.

Health Minister Nila Moeloek said, however, that the government would press ahead with the increase in premiums as it does not need parliamentary approval.

Starting this month, the new premium for the cheapest insurance package is raised to IDR42,000 a month from IDR25,500 previously, representing a 65% hike.

“This is to pay for September to December. If we don’t do this, the hospitals won’t get paid,” she told reporters after the parliamentary hearing.

Premiums for the other two insurance packages BPJS offered will be raised by 100% starting 1 January, deputy finance minister Mardiasmo said, claiming this will make BPJS “more systematic and sustainable”.

Last year, the government had to inject IDR10.1tn to help BPJS manage its cashflow, while ordering an audit to its system. The 2018 financial problems forced BPJS to delay payments to hospitals. Some hospitals had reportedly refused to treat BPJS-covered patients, who are mostly poor.

Last month, Coordinating Minister for Maritime Affairs Luhut Panjaitan said that Chinese giant insurer Ping An had offered to fix the information technology system of BPJS so as to help it control claims and costs.

BPJS director of health Fachmi Idris said instead that no decision had been made yet regarding the offer of cooperation extended by Ping An.

BPJS has been operating with a deficit since operations started in 2014.

Sumber: Asia Insurance Review

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