JAKARTA, May 13 (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.
BPJS Kesehatan, which gives universal health coverage for over 200 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 96 million people on low incomes.
The insurer estimated a $2.3 billion cash shortfall last year.
“We hope (the new) premiums would allow BPJS to continue with its operations,” said Airlangga Hartarto, Indonesia’s chief economic affairs minister.
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.
BPJS, which is tasked by the state to pay for all coronavirus treatments across the country, did not respond to requests for comment.
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.”
The finance ministry did not respond to queries on the impact of the new measure on Indonesia’s fiscal position.
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 = 14,850.0000 rupiah) (Reporting by Maikel Jefriando; Writing by Gayatri Suroyo; Editing by Giles Elgood)