Indonesian Supreme Court strikes down health cover hike

Move to help struggling state-owned insurer declared illegal

Indonesian Supreme Court strikes down health cover hike

Insurance News

By Gabriel Olano

The Indonesian Supreme Court has ruled against Jakarta’s move to increase health insurance premiums for hundreds of millions of people, which sought to aid a struggling public health insurer.

The court struck down the government’s decree, issued in October 2019, to increase premiums charged by BPJS Kesehatan by at least 65%, according to a report by Reuters that cited Indonesian-language news portal

State-owned BPJS Kesehatan, which provides universal health cover, has been in financial trouble for several years, citing more payouts than premiums collected. It announced a US$2.3 billion cash deficit last year, which is expected to balloon by 140% by 2024. The deficit has caused delays in payment to various medical service providers.

Jakarta’s solution was to increase the premiums charged, but the Supreme Court declared it illegal, as it violated the 2009 Health Law. According to the report, a group of patients suffering from kidney failure petitioned the court to review the decree that increased premiums.

Finance Minister Sri Mulyani Indrawati said that BPJS Kesehatan’s finances will be impacted by the ruling.

“We will see how to make BPJS Kesehatan more sustainable,” Indrawati was quoted as saying in the report. “It gives healthcare services for the wider public, but financially it’s at a loss.”

Following the ruling, it is not yet clear if BPJS Kesehatan will be ordered to refund the extra premiums it charged, the report said. Around 96 million low-income individuals have their premiums subsidised by the government.

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