JAKARTA (Reuters) - Indonesia’s Supreme Court has annulled the government’s move to increase health insurance premiums for hundreds of millions of people, news website Detik.com reported on Monday, citing a court ruling.
The government issued a decree to raise premiums managed by insurer BPJS Kesehatan by at least 65% in October, after the state-owned agency estimated a $2.3 billion cash shortfall last year and warned that the gap could widen by 140% by 2024.
BPJS Kesehatan, which provides universal health coverage for over 200 million people, has been facing cash problems not long after its inception in 2014, regularly booking claims far exceeding premiums it collects. Its premiums are regulated by the government.
The Supreme Court has decided that the increases in premiums contradicted the 2009 Health Law and ordered they be canceled, according to the ruling cited by Detik.com.
The court’s decision was in response to a judicial review filed late last year by a group of patients suffering kidney failure, the news portal wrote.
The court’s spokesman did not immediately respond to a Reuters’ request for comment.
Finance Minister Sri Mulyani Indrawati said the ruling would have implications on BPJS Kesehatan’s finances.
“We will see on how to make BPJS Kesehatan more sustainable,” Indrawati told reporters. “It gives healthcare services for the wider public, but financially it’s at a loss.”
It was not clear if BPJS Kesehatan would have to return funds to policyholders or the state following the ruling. The government pays for the coverage of some 96 million people on low income.
BPJS Kesehatan’s cash deficits had previously led to late payments to hospitals and clinics, who then delayed payments to pharmaceutical firms.
Indrawati said last month she would pay upfront 12 trillion rupiah ($834.20 million) of state-subsidized premiums through April to BPJS Kesehatan, so the insurer could pay up its bills to hospitals, as part of the government’s measure to contain the spread of coronavirus.
Reporting by Gayatri Suroyo, Maikel Jefriando and Tabita Diela; Editing by Jacqueline Wong