UPDATE 1-Indonesia to hike health insurance premiums amid coronavirus pandemic

(Adds insurer’s comment, updates policyholder, changes dateline to Thursday)

JAKARTA, May 14 (Reuters) - Indonesia will raise premiums for health insurance provided by a state company but also increased subsidies for the lowest rate, impacting tens of thousands of policyholders, as the country battles the coronavirus, a minister said on Wednesday.

The government will hike by 65% the lowest premium managed by insurer BPJS Kesehatan to 42,000 rupiah ($2.83) a month starting in July, but will subsidise all of the increase, according to a copy of a government regulation backing the measure.

Premiums for other policies will be nearly doubled, with the highest rate to reach 150,000 rupiah a month, with no subsidy provided.

A finance ministry official said an additional 3.1 trillion rupiah ($208.05 million) has been allocated to subsidise the hike.

BPJS Kesehatan, which gives universal health coverage for around 223 million people making it the biggest single-payer health insurance in the world, has been having cash flow trouble for years, regularly booking claims far exceeding the premiums it collects.

Its premiums are regulated by the government, which also pays for coverage for more than 100 million people on low incomes.

“We hope (the new) premiums would allow BPJS to continue with its operations,” said Airlangga Hartarto, Indonesia’s chief economic affairs minister.

BPJS chief executive Fahmi Idris said the new premiums would help the company repay liabilities to hospitals that it had already defaulted on and balance its financial position this year.

The insurer had carried over a total of 15.5 trillion rupiah ($1.04 billion) of missed payments from last year to this year, of which 4.8 trillion rupiah remained unpaid, Idris said in a news conference on Thursday.

The government raised BPJS’ premiums by nearly the same amount last year to avoid having to extend a large bailout to the company, but the Supreme Court annulled the move in March on the grounds that the hike did not follow a fair principle, as there was no improvement in BPJS’ service quality.

News of the increase became a trending topic on Indonesian Twitter, with many users slamming the move.

“The court has cancelled the hike. The government should have just stuck with that,” Ribka Tjiptaning, a member of parliament, told Reuters. “This proves the government is insensitive. People are losing their jobs, yet they ask for higher BPJS premiums.”

Indonesia on Wednesday reported its biggest daily rise in coronavirus infections with 689 cases, taking the total to 15,438, with 1,028 deaths. ($1 = 14,840.0000 rupiah) ($1 = 14,900.0000 rupiah) (Reporting by Maikel Jefriando and Tabita Diela; Writing by Gayatri Suroyo; Editing by Giles Elgood & Simon Cameron-Moore)