Indonesia Supreme Court annulled a regulation that doubled health insurance premiums for hundreds of millions of people, media reports said. A decree was issued by the government to raise premiums managed by state-owned BPJS Kesehatan by at least 65 percent last October.
BPJS Kesehatan is a healthcare insurer based in Indonesia. The Supreme Court said that the national health insurance premium has to be on a par with the country’s economic development, which is in accordance with the 2004 Social Security Law and 2011 Social Security Agency Law.
According to the Supreme Court, increasing health insurance premium during stable inflation and slow economic growth will lead to unfavourable outcomes for the people. The verdict has revoked the premium increase. With that, BPJS Kesehatan premiums are now at their original prices.
Finance Minister Sri Mulyani Indrawati, told the media, “We will see on how to make BPJS Kesehatan more sustainable. It gives healthcare services for the wider public, but financially it’s at a loss.”
Currently, the Indonesian government pays for insurance cover for nearly 96 million people of low income groups, media reports said. The spend on healthcare was anticipated to increase by 12 percent to reach $46 billion by 2019.
Last year, the number of people who enrolled in BPJS increased to about 221.6 million. One of the main factors contributing to BPJS’s healthcare deficit is failed monthly premium payments by independent segment members. In July, the deficit was estimated to be Rp 28 trillion on the back of many deficits incurred since 2014.