Indonesia launches world's largest health insurance system

Suriman, a day laborer in Jakarta, is beaming from ear to ear. He points to three pages of official- looking paper stapled together with his name and age and a stamp certifying that he’s just enrolled in Indonesia's new universal health care program.

“I used to have to borrow money to see the doctor,” says Suriman, who like many Indonesians uses one name. “I feel relieved.”

Indonesia is planning to phase-in the world’s largest single-payer health care insurance program between now and 2019. Under the new system, the government is committed to providing universal health care to its 247 million citizens, though employers and wealthier citizens are obliged to pay their own premiums. 

The program was mandated by a law passed in 2004. But opposition from industry had stood in the way until now, since the law will require employers to pay premiums. The government also dragged its feet on implementation and was successfully sued in 2010 by a worker's rights group for failing to follow the law. 

Still, it's a measure of Indonesia's ambitions and rising expectations that the government is trying to roll out health services for all. 

Indonesia extended free health insurance to 48 percent of its population on Jan. 1. By the time the system is fully implemented in 2019 it will cover the whole country at an estimated cost of $15 billion a year – about $60 per Indonesian citizen and 15 percent of the central government’s budget.

The insurance program, known as Jaminan Kesehatan Nasional (JKN), differs from the US approach in one important way: choice. JKN doesn’t have any. Organizers here are betting its stripped-down, no frills policies will satisfy popular demand. 

“The single payer approach has its advantages,” says Hasbullah Thabrany, professor of health policy at the University of Indonesia in Jakarta and the architect of Indonesia's universal health insurance scheme. “We need coverage, not choice,” he says.

On-the-ground services 

Health workers here believe that JKN will go a long way to making medical services more available. 

“It’s absolutely going to help improve services,” says Dr. Lies Anggriani, director of a public health clinic in Jakarta. After six years as the clinic administrator she is relieved that government health insurance means turning away fewer people because they can’t afford treatment.

Her clinic is a sort of mother ship for a host of smaller offices that dot North Jakarta, a district of about 4.7 million. Slums huddle under highway overpasses to Jakarta's main airport and to its industrial parks by the port. About 200 patients visit the clinic’s four doctors every day. The doctors say the profile of illness here is changing, as more people complain of chronic illnesses rather than communicable diseases that used to be common. 

Managing costs 

There are concerns about the cost of the program: Indonesia’s government will pay $2 per person per month to provide medically necessary treatment for the poor. Wealthier citizens are obliged to pay 5 percent of their monthly income into the program and can opt to increase their coverage with private insurance. 

But there is disagreement over how many people will qualify for 100 percent government coverage and how many are wealthy enough to pay into the program. An income threshold has not been announced. Just over one third of people are expected to qualify for the full subsidy. 

To keep down costs and extend care, the government is looking to advances in information technology. Remote health clinics lacking a doctor can request online consultations.

Government officials also claim that their purchasing power will drive down the costs of medicines, though critics point to systemic corruption in government contracting. Mr. Thabrany says that hospitals routinely pad out their claims for compensation by as much 25 percent. However, lawmakers say that audits will monitor all spending. 

Bumpy rollout 

The JKN rollout has not gone smoothly. Confusion regarding who needs to register, how doctors get compensated, and what medicines are available is rife. 

Not everyone needs to register: Those with preexisting government-issued insurance for the poor are automatically enrolled. But hundreds pile everyday into Dr. Anggriani's clinic eager to sign on, even if they don't have to, swelling the waiting room to overflowing and straining services. About 2 million residents in North Jakarta need to enroll. 

Thabrany admits the next two years will be “bumpy” as doctors and patients learn the rules. He also concedes that the system is badly underfunded. Premiums start at $2 a month, about one third of what they should. And, as Indonesians grow wealthier and live longer, health care costs will inevitably rise sharply. 

Indonesia also needs more medical professionals. Compared to neighboring Malaysia, it has only a fifth of doctors per capita. But by creating a single-payer system for 247 million people, it has the potential to improve care and deliver inexpensive medicines, he says.