September 30, 2019 / 10:51 AM / a month ago

Indonesia president orders review of health insurance premium hike amid protests

JAKARTA, Sept 30 (Reuters) - Indonesia’s President Joko Widodo said on Monday the government would review a plan to raise the cheapest premiums of the state health insurer by 65% starting this month, after meeting with trade union leaders opposing the measure.

BPJS Kesehatan, which provides universal health coverage for over 200 million 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.

Finance Minister Sri Mulyani Indrawati had announced the measure earlier this month to help cover some of the insurer’s cash deficit, which is expected to reach 32 trillion rupiah ($2.26 billion) this year.

“We will reconsider because we have to calculate things,” Widodo said, speaking to reporters alongside two trade union leaders at the presidential palace in Bogor, West Java, according to a statement by the Cabinet Secretariat.

Union members, who had staged demonstrations against the planned premium, on Monday held a rally outside of the finance ministry headquarters.

A delay or a cancellation of the increase could force the government to inject more capital into the insurer, which officials have tried to avoid, saying such move would not be sustainable.

“We’re awaiting the president’s further instruction,” Askolani, director of budgeting at the finance ministry, told Reuters when asked about the impact of Widodo’s order.

The ministry had to inject 10.1 trillion rupiah last year to help BPJS manage its cashflow.

Officials’ reluctance to provide immediate financial help to the battered insurer in 2018 had forced it to delay payments to hospitals, which then withheld payments to pharmaceutical distributors.

$1 = 14,190.0000 rupiah Reporting by Gayatri Suroyo and Maikel Jefriando; Editing by Kim Coghill

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