Problems of Indonesian Health Insurance System

I would like to share some problems about the health insurance in Indonesia. Firstly, it is about Jamkesmas. The Indonesian Health Ministry claims to have spent eight years drafting a universal healthcare bill, but has been facing a series of hurdles: lack of funding and other technical issues.

The 2008 health insurance scheme for the poor, Jamkesmas, is notorious for its complex procedures and documentation requirements. The notoriety in defining “poor” in Indonesia is because it is based on a local authority’s letter stating one’s poverty (surat pernyataan miskin).

Compared with the USA, where one must show one’s annual tax report statement that quantifies the exact taxable earnings. Such a subjective statement of being “poor” in Indonesia must be revised, which brings with it implications for tax-reporting procedures.

Secondly, for PT Jamsostek, it remained unable to effectively provide social protection to workers, mainly because of the absence of political commitment from the government to improve the social welfare of 107 million workers and their families, as evident in the discriminatory social protection policy.

The government enacted Law No. 3 on social security programs in 1992, and appointed Jamsostek to cover only companies employing 10 workers or more, or those paying the monthly salary of Rp 1 million or more, ignoring the jobless and around 77 million people employed in the informal sector.

Since the inception of the 1992 social security law, Jamsostek has registered only 24 million of 35 million workers in the formal sector, and so far only 9.2 million of the paid workers employed in the more than 11,000 companies that have remained active in the social security programs.

The absence of the state’s annual payment and the low percentage of contribution from employers and workers have deprived workers of maximum benefits from the programs. Employers pay only 6 to 9 percent of the workers’ monthly salaries to healthcare, death, occupational accident and old age risk plans wile workers contribute only 2 percent to the old-age risk scheme. As compared to Singapore, employers and workers contribute 20 percent to the Central Providence Funds, while Malaysia, their employers contribute 13 percent and workers pay 10 percent in the Employee Providence Fund (EPF).

Despite the solidarity and portability principles, participants have yet to receive maximum benefits when they get sick or enter retirement age. Workers suffering from major diseases could not get optimum healthcare in hospital referrals.

In a nutshell, there are still problems need to be solved in the aspect of health insurance in Indonesia. For example, perhaps Jamsostek need to be reorganized and turned into a non-profit institution which focuses on occupational accident, death and old-age risk schemes, while the healthcare and pension schemes should be handled by other professional institutions to give better service to participants. This will improve the quality of care and increase the accessibility of people to health.

References:

1. Health Financing in Indonesia: A Reform Road Map. Jakarta: World Bank

2. Social Health Insurance for the Poor: Targeting and Impact of Indonesia'a Askeskin Program, SMERU Research Institute.

3. Health Fincance, Prof. dr. Ali Ghufron Mukti.