The Impact of Indonesia Rapid Move Towards Universal Health Insurance on Total Health Care Expenditure

Social health insurance in Indonesia dates from the 1990s but recently in 2014, the government announced its ambition to achieve universal coverage within five years. Jaminan Kesehatan Nasional (JKN) integrates all existing social health insurance schemes under one manager and one payer, the central Ministry of Health.

Compared to previous schemes, JKN offers more generous benefits and can be accepted at both public and private facilities. The purpose of this study is to evaluate the impact of JKN on the total cost of health care.

The data is derived from the national socio-economic survey in the years 2011-2016, supplemented with village-level facility data. We find that JKN has a positive impact on total health care expenditure, increasing it by about 10% on average. The impact is much larger at the top of the total health care expenditure distribution, where health care needs tend to be higher.

The part of JKN that is targeted for the poor also has positive impacts at the upper 20% of the total health care expenditure distribution. Future challenges, therefore, will be to control cost and manage supply to be able to sustain the demand expansion.