Indonesia’s roadmap to universal health coverage: A story of Indonesian-German collaboration

Indonesia’s government plans to expand its new social health insurance scheme to cover the entire population - 260 million people - by 2019. German Development Cooperation has been supporting the process from the planning to the implementation stages.

People queuing to be seen by a doctor at Indonesia’s National Reference Hospital

A health insurance scheme aiming to cover 260 million people

Indonesia’s new health insurance scheme, launched just over a year ago in January 2014, already covers 134 million people - making it the largest in the world. The challenges of managing such a large population under one scheme are enormous, and about to get bigger still as the government’s ambition is to cover the entire population - an estimated 260 million people - by 2019.

Geographically Indonesia’s large population is spread over 17,000 individual islands, in one of the most disaster-prone areas of the world. There are also stark inequalities both between geographic areas and income levels, and the country’s healthcare system – a mixture of public and private provision - is fragmented and segmented. 

Despite such challenges, the central government is committed to achieving Universal Health Coverage by 2019 as projected in the roadmap of the Jaminan Kesehatan Nasional (JKN), or National Health Insurance Programme of 2012-2019.

Bringing different social security systems together

Indonesia has had some experience of running an insurance scheme since 1968, but this was only open to civil servants and government employees. Another scheme (Jamsostek) was introduced in 1992 for employees in the private sector, but the scheme was not compulsory so only covered 5% of employees. Following the passing of the Social Security Act of 2004, the government introduced Jamkesmas - a social security system aimed at protecting the poorest of the poor. Now these three separate schemes with their different benefit packages and insurance agencies have been brought under one umbrella, with plans to expand cover the whole population in the next four years.

The constitutional reform of 2002 stipulated that the country should develop a social security system for everyone. This became law in 2004, making it compulsory for everyone with income above a certain level to contribute to social security. The aim was to bring down barriers to access of health services due to financial reasons, but also ensure further financial protection for the most vulnerable in society. However, for various political and other reasons, there was a ten year delay before the National Security Law came into effect in January 2014.

Since then, all government health insurances have been integrated into one scheme. Employees have to pay about 5% of their salary to the system and non-salaried people in the informal sector can also join by paying contributions. People classified as poor get a fixed contribution subsidy from the government.

Prof. Thabrany

Professor Hasbullah Thabrany, one of the government’s key advisors on the new insurance system - © GIZ Indonesia

Professor Hasbullah Thabrany of the Centre for Health Economic and Policy Studies at the University of Indonesia says the fund is modelled on a system of capitation or prospective payments (similar to the NHS in the UK or the health system in the Netherlands) with primary care centres acting as gate keepers.

Audio-clip-symbolListen to Professor Hasbullah Thabrany of the Centre for Health Economic and Policy Studies at the University of Indonesia and one of the key designers of the new health insurance system

Drawing up a roadmap to Universal Health Coverage

On behalf of BMZ, GIZ has enjoyed a long history of cooperation with the health sector in Indonesia, even before the design of the new insurance system. In the late 1990s GTZ, as it was then, conducted several studies on health system reforms and facilitated seminars aimed at exploring the options for social health insurance.

GIZ’s social protection programme in Indonesia was only established in 2009, but before that in 2006 it was commissioned as a bi-lateral development partner to conduct a study on social protection in Indonesia. At that time, says Cut Sri Rozanna, GIZ’s Deputy Programme Director in Jakarta, Indonesia was struggling to implement poverty reduction policies in the face of a rapidly growing population. GIZ’s involvement in questions on health financing is based on the social protection angle: “The main objective is to contribute to reducing poverty in Indonesia,” says Rozanna.

The first step was to provide technical assistance to the government on drawing up a roadmap for establishing one national social security system for all.

It took two and half years to draw up that roadmap, involving at least 12 key stakeholders as well as civil and labour organisations. The process was hugely complex and highly sensitive.

Audio-clip-symbolListen to Cut Sri Rozanna, GIZ’s Deputy Programme Director in Jakarta, on German involvement of the Social Protection Programme.

Setting up one single insurance body

The second step was to establish one single insurance body, the Badan Penyelenggara Jaminan Sosial, or BPJS, to replace the different insurance schemes that had previously existed. BPJS was set up as a non-profit quasi-government organisation to provide comprensive health services for all the people of Indonesia.

The BPJS would run the new health insurance scheme, whilst a national social security council , the Dewan Jaminan Sosial Nasional (DJSN)  would be established to manage the social security programme and determine the contributions to be made – both by people and by the government for the poor.

One of the biggest challenges is that the newly established BPJS is reponsible for a huge amount of money - around seven trillion Rupiahs or 500 million Euros a year - to run the programme, but being a very young institution there is still a lot of homework to do for the non-profit scheme. 

Assisting with policy design and system development

The government asked GIZ to assist with policy design and provide on-going technical assistance to the DJSN on what kinds of regulations will be needed, how much contributions people should make etc. “Helping the Council plays a very strong role in ensuring people’s rights to health without the financial risk,” says Cut Sri Rozanna. “The main objective is to ensure that by 2019 the whole population of Indonesia will be insured.”

As part of this technical expertise, GIZ facilitated visiting consultants from Germany and elsewhere and also funded Indonesian counterparts to undertake comparative study visits to other countries.

Throughout the decade between the social security law being passed and coming into effect in January 2014, GIZ also provided continuing support for the detailed development and marketing of the system. It also contributed to funding local and international consultants who advised the National Social Security Council, and supported capacity building and training of human resources. A Masters degree on social protection is also being designed to train the skilled personnel needed to run and continue to improve the national social protection system.

Audio-clip-symbolListen to Cut Sri Rozanna, GIZ Deputy Programme Director on the aims of the programme.

A bumpy road in the first year

The enthusiasm for the health insurance scheme is huge, says Cut Sri Rozanna, but there are big challenges too. People have high – perhaps unrealistic - expectations of what the government can currently deliver in return for their contributions, and the institutional framework for meeting those expectations was not really ready.

Dwidjo Soesilo is married and has two children. Since the introduction of the new insurance scheme he pays 60,000 Rupiahs (less than €5) a month for each family member, making a total of 240,000 Rupiahs. He says this is about 1 per cent of his salary and about 2-3 per cent of his monthly household expenditure. Private insurance would cost him around 500,000 Rupiahs and not provide him with as many benefits. “I think this is the best thing from the government because they provide people with better health care with a minimum monthly payment. It provides better services for the people.”

Dwidjo Soesilo’s job as a university researcher involves monitoring social media – Facebook and Twitter – to find out what people think about the implementation of health insurance, and despite general enthusiasm for the scheme, he says there are plenty of problems that have already come to light.

Audio-clip-symbolListen to Dwidjo Soesilo on what people think about the new insurance scheme.

He cites his own experience of accompanying his mother-in-law to hospital. Previously she was insured as a private employee, but now that she has retired and needs frequent medical appointments for a number of medical issues, she finds the new system much more cumbersome and frustratingly time-consuming. Whereas previously she could see a doctor at the hospital, under the new system she has to be referred by the primary health care facility – so that has

Hospital queus

People queuing to be seen by a doctor at Indonesia’s National Reference Hospital - Photographer: Dwidjo Soesilo © GIZ Indonesia

doubled the appointments she needs. In addition she cannot now be treated for more than one problem in an appointment, and when the insurance was first introduced, hospitals would only give her enough medicines for seven days, so she had to come back every week. Another problem is that the hospital used to treat 100 patients a day, but now sees only 50 a day, so she has to go very early in the morning to make sure she can get seen.

Great hopes for the future

Despite all the teething problems Dwidjo Soesilo is optimistic that the insurance scheme will work better in the future. The government is planning to build more public hospitals and BPJS is also entering into more contracts with private hospitals, so that should improve the options people have. The registration process is also being improved to make it easier for people to register and become members of the scheme.

Above all, says Dwidjo Soesilo, the management of the BPJS need to “open their mind that they are not a private company anymore. They are a public entity, so profit is not the goal of the organisation. Getting more and better services for the people is the main goal of the organisation.”

Growing demand for health care

Evidence from many studies in other countries shows that when people are insured, the demand for health care increases. As a result health care providers are often not able to cope with the increase in demand. Both trends have been very apparent in the first year of the new insurance scheme in Indonesia.

Increased demand can have an adverse effect on quality of existing care, so with increased access comes a need to ensure quality. The distribution of health care facilities across such a large and scattered country makes this a particular problem in Indonesia. Most are currently concentrated in large cities, and there needs to be further decentralisation to smaller cities and villages, as well as an improvement in quality. But Professor Thabrany hopes these challenges will be overcome in the next few years, with the help of computers and modern technology which now finally make more efficient management possible for the first time. He also expects that the higher demand for health care will in time lead to an improvement in facilities and quality of health care for the people of Indonesia.

One of the biggest challenges will be changing the behavour of patients. Whereas before people went straight to specialists, if they could afford to, now they have to get a referral from a primary health facility. In order for this work, the government will need to improve people’s trust in and experiences of the primary health care structure.

Two BPJS regulations have received particular criticism – namely that people have to wait seven days after registration before they can be treated, which means that some sick people die because they cannot get immediate treatment, and the stipulation that even unborn babies also have to pay a separate contribution and are not automatically covered by their mothers.   

What does it cost?

The government’s budget for the insurance scheme is fairly small - only 20 trillion Indonesian Rupiah (around €1.6 billion) Professor Thabrany argues that the government needs to put more money into the scheme and suggests that using the 120 trillion Rupias it received last year from cigarette taxes – six times the insurance contribution – would be one way of doing this. “If the government did this it could ensure that people get much better quality health care than they currently receive.”

Audio-clip-symbolListen to Professor Hasbullah Thabrany of the Centre for Health Economic and Policy Studies at the University of Indonesia.

The road ahead

Despite these challenges, says Professor Thabrany, for now there is political consensus that the current system is necessary and desirable. But given the fact that it took ten years to implement the national social security law and set up the insurance scheme, could it become a political football in the future? “It could still be subject to political change, but people are getting more understanding that the current system benefits people lots,” says Professor Thabrany. “Health service providers are also beginning to accept the system. So in general there is acceptance.”


The new health insurance scheme is gaining acceptance despite initial teething problems - © GIZ Indonesia

He conducted an evaluation survey last December and found that 96 per cent of people interviewed in a random survey understood and accepted the system – but only 60 per cent of them had already joined it. Many said they were waiting to see whether long waiting times at the hospitals would be reduced before joining the scheme. “They want the government to improve the health care facilities so they will not face long queues in hospital when they join, “ says Professor Thabrany.

GIZ will continue to offer technical support to the NSSC and work with the government of Indonesia to strengthen and improve the health insurance system. “There are huge challenges,” says GIZ’s Deputy Programme Director Cut Sri Rozanna, “but I am very optimistic that this programme will be better by 2019.”

By Ruth Evans


Other sources

Politics of National Health Insurance of Indonesia: A New Era of Universal Coverage
By Professor Hasbullah Thabrany, Centre for Health Economic and Policy Studies, University of Indonesia.Roadmap cover page

Indonesia - Universal health coverage for inclusive and sustainable development : country summary report (English)

Roadmap toward the National Health Insurance of Indonesia (INA MEDICARE) 2012–2019  (46 pp. 10.0 MB!)

BMZ glossary

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