Indonesia to raise state health insurer's premiums to plug cash deficit

JAKARTA, Sept 2 (Reuters) - Indonesia’s state health insurer will raise its premiums by at least 65% starting this month to plug a deficit expected to reach 32 trillion rupiah ($2.25 billion), officials said, despite protests from parliament members and trade unions.

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.

A parliamentary commission overseeing government finances rejected the planned increase for the poor, which is going to be implemented through a presidential decree due to be issued soon, the commission chair said on Monday.

Lawmakers ordered the government to seek other ways to control the insurer’s mounting cash problems in a hearing with the finance and health ministries, as well as BPJS executives.

Health Minister Nila Moeloek said, however, that the government would press ahead with the increase in premiums as it does not need a parliamentary approval.

Starting this month, the new premium for the cheapest insurance package will be raised to 42,000 rupiah a month from 25,500 rupiah, Moeloek said, representing a 65% hike.

“This is to pay for September to December. If we don’t do this, the hospitals won’t get paid,” she told reporters after the parliamentary hearing.

Premiums for the other two insurance packages BPJS offered will be raised by 100% starting Jan. 1, deputy finance minister Mardiasmo said, claiming this will make BPJS “more systematic and sustainable”.

The measure would allow the government to give BPJS 13 trillion rupiah of additional cash this year, Suminto, a finance ministry official said, while next year’s hike is estimated to provide the insurer with another 14 trillion rupiah.

The government wanted the rest of the deficit to be covered by the firm’s efficiency measures, Suminto said.

Separately, chairman of the Confederation of Indonesian Trade Union Said Iqbal said workers also rejected the hike and threatened to hold a large demonstration against the measure in October, news website reported.

Last year, the government had to inject 10.1 trillion rupiah to help BPJS manage its cashflow, while ordering an audit to its system.

The 2018 financial problems forced BPJS to delay payments to hospitals, who then also held payments to pharmaceutical distributors. Some hospitals had reportedly refused to treat BPJS-covered patients, who were mostly poor. ($1 = 14,210.0000 rupiah) (Reporting by Maikel Jefriando and Gayatri Suroyo; Editing by Simon Cameron-Moore)