Indonesia’s national health insurer facing deficit could mean higher premiums for patients

JAKARTA -- Indonesia’s national health insurance scheme (JKN), which covers 219 million active policy holders, is projected to record a 20 trillion rupiah (S$1.69 billion) deficit in 2024, raising the prospect that patients could face higher premiums.

Given the shortfall from insurance premiums collected and claims paid out, JKN may find itself unable to pay out medical claims as early as 2026, the national insurer’s chief has warned.

“Failure to pay (claims) will potentially occur in 2026. That’s why the premiums may be adjusted,” Mr Ali Ghufron Mukti, president director of the Healthcare and Social Security Agency (BPJS Kesehatan), which manages JKN, told local media recently.

If the national insurer cannot honour these medical claims, that will be detrimental to the sustainability of quality healthcare for Indonesians, said Ms Diah Satyani Saminarsih, founder and chief executive of health rights advocacy group, Centre for Indonesia’s Strategic Development Initiatives (CISDI).

“Hospitals that are not paid will not be able to continue their services and may need to be bailed out by the government,” she told The Straits Times, raising the prospect of a decline in healthcare services.

A short-term measure would be to raise premiums, experts say. These currently range from 35,000 rupiah to 150,000 rupiah a month, with the government partly subsidising those paying the lowest rate. Under the scheme, patients can receive treatment for severe and prolonged illnesses such as stroke and cancer, which cost millions of rupiah a month.

“I know the gap between what I pay and what I receive is too big,” said housewife Hotmaida Junita Sibuea, 58, who pays a monthly premium of 150,000 rupiah.

She suffers from hypertension, diabetes and kidney failure, and has undergone surgery. She has eight dialysis sessions every month, and regular consultations with doctors at half a dozen hospitals in Medan, North Sumatra.

By Ms Hotmaida’s estimates, her monthly bills for doctors’ fees, medication and treatments exceed 5 million rupiah, and are covered under JKN. Her family’s sole source of income is her husband’s monthly pension of 3 million rupiah a month.

“I can accept a premium hike, but it should be reasonable. Hopefully, it will not be double the current rate,” she said.    

JKN paid out 158.8 trillion rupiah in claims for 2023, covering over 600 million medical cases. About one-fifth of these claims were for severe or prolonged illnesses such as cancer or stroke, which have surged in the past few years, according to the agency. The claims amount for this segment grew from 20.3 trillion rupiah in 2019 to 34.8 trillion rupiah in 2023.

Daily hospital visits covered by JKN also rose, from 252,000 in 2014 to 1.7 million in 2023, as more people joined the scheme.

Indonesia introduced its national health insurance scheme in 2014.

BPJS Kesehatan spokesman Rizzky Anugerah told ST a premium hike is among the options being considered. Other possible solutions to resolve the deficit issue include a cash injection from the government and adjusting the benefits received under the scheme.

“From 2020 until 2024, the premiums have not been raised,” he noted.

The last adjustment occurred in 2020 when the agency raised its monthly premiums from between 25,500 rupiah and 59,500 rupiah, to between 35,000 rupiah and 150,000 rupiah.

Snack vendor Herni Novaliasari, 44, says she can fork out an additional 50,000 rupiah in monthly premiums on top of her existing 150,000 rupiah, but not more than that. Her daughter, Ms Afifah, 25, who suffers from kidney failure, has been going for regular dialysis treatments in West Java for two years now.

“The kidney dialysis gives her a new lease of life,” she said. “The insurance really helps. We cannot afford the treatment if we have to pay on our own.”

Raising premiums is but a short-term solution, experts say, and other measures should be considered to ensure the scheme’s viability in the longer term.

Among them is President Prabowo Subianto’s plan to provide free medical check-ups starting from 2025, for over 50 million of the 283 million population

This initiative, which will focus on promoting preventive care and healthy living, should also help detect some diseases early and lessen the burden from severe illnesses.  

Ms Diah of CISDI said that health screening, especially to detect non-communicable diseases such as diabetes, hypertension, cancer and heart disease, would help lower JKN’s pay-out costs in the long term.

“Right now, only 30 per cent of those suffering from non-communicable diseases are aware of their condition. Regardless of their condition, the health screening is necessary,” she said.

The Health Ministry’s director of non-communicable diseases, Dr Siti Nadia Tarmizi, said early detection of diseases can reduce their severity and cut down on medical expenditure for the treatments.

“The heaviest burden (of the JKN) derives from non-communicable diseases because they are usually lifelong and their treatment (requires) great costs. Such cases recorded by the BPJS Kesehatan keeps surging, and the money spent on them continues to climb,” she said.