The Indonesian Health Insurance Systems: Equity Perspectives

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The Indonesian Health Insurance Systems Equity
Perspectives
Hasbullah Thabrany Center for Health Economic
Studies, University of Indonesia
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Equity what is it?

• It is important policy objective in health care
• There are many concepts of equity
• In insurance/health care financing, you get
  health care
• Egalitarian (you get what you need, regarless of
  your socio-economic status)
• Libertarian (you get what you pay for) relates it
  with your payment
• Indonesian constitution places social justice and
  humanity as the basic principles for development
  (Pancasila). It is closer to egalitarian concept

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The Health Policy Objectives
Access-equity
Low satisfaction
Very expensive system
Social Value
Costs-Efficiency
Quality-Acceptability
Low social-solidarity
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Let us examine Indonesian health insurance systems
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Current Health Insurance Systems
Min of Labor
Min of FInance
Min of Health
Min of Defense
Private Insurers
ASKES
JAMSOSTEK
Military Health Services
HMOs/ JPKM
Social Security. Social HMO
Free health services
Types
Askes Social HI/HMO Commercial HMOs/JPKM.
Traditional Health Insurance
Coverage. Mil people
2. 9 M
5 M,
16 M
2 M
?Technical oversight
?Financial oversight
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Current Indonesian Health Insurance Systems

• Element of egalitarian concept is there, but the
  systems mix with libertarian concept
• The laws does not (yet) provide full social
  solidarity (at least for essential health
  services).
• The systems are sectorally oriented.
• 84 of the population pay out of pocket, the most
  regressive

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Effects of the Systems
In The National Vision
Private II
Private I
Jamsostek
JPKM 1
Askes, compulsory
JPKM2
Of course, there is inequity among the
schemes. Is wrong? We are assessing equity issues
within a scheme
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Jamsostek (SS for private employees)

• Expensive medical care is not covered (cancer,
  hemodialisis, congenital diseases)
• Impoverish members when it occurs
• Higher burden for lower income members
• Ceiling of ernings of Rp 1 m (about US 112),
  create relative higher burden for low income
  companies
• Retired employees are not covered

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How the ceiling creates inequity
Let compare two married employees with different
earnings per month
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What the higher income employers do?

• Opt out by purchasing health insurance from the
  private sectors
• Provide its own financing system (reimbursing
  employees for medical expenses)
• Provide its own health care facilities. There is
  pressure to concentrate to core bussines
• This create inequity between schemes that provide
  disincentive for social solidarity

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Average Per capita Premiumfor the best-estimate
equivalent benefits

• Adverse selection for public insurance
• The richers tend to buy private health insurance

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Jamsostek Coverage

• Opt out option leads to low enrollment

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Health Insurance in Formalsector workers in
Chile, 1994. Adverese selection (WHR 2000)
FONASAPublic ISAPRES Private
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How about Askes (SHI for civil servants)

• Salary of civil servants consists of
• Basic salary
• Supplemental earnings
• Contribution is 2 of base salary without ceiling
• Higher rank, normally have higher earnings (basic
  and supplemental)
• Lower rank normally have much less supplemental
  earnings
• The Burden of contribution, again, higher for the
  lower salary

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Check this
Two civil servants with different rank, basic
salary, and earning (take home income)
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The Askes Scheme (compulsory)

• Large out of pocket Resulting from
• low (inadequate) contribution of 2 basic salary
• Low reimbursement level to hospitals, higher out
  of pocket from balance billings
• Perceive poor quality of services? obtaining
  services from out of network, higher out of
  pocket payment
• Higher burden for the lower income civil servants

Out of pocket. Vary for various services
Covered expenses
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Hospital admission rates per 1,000 people by
insurance and income status
Variation in geographical access correlates with
this inequity. Greater inequity
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Out of pocket burden inpatient costs/household
monthly expenditure by income groups
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Lessons

• Both Askes and Jamsostek, SHI, that suppose to
  provide more equitable health insurance systems
  have inherent inequity
• Inequity between SHI and Commercial health
  insurance even higher
• More appropriate equity assessment must take into
  account out of pocket payment. Data are very
  limited
• If real income and out of pocket payment are
  included in the equation, Indonesian health
  insurance systems even more regressive

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Alternatives HCF using health insurance mix
Source WHOR1999
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The needs for reform

• The above inequity and inadequate financing raise
  a pressure for reform
• A new policy in response to decentralization and
  demand for autonomous hospitals, create even
  greater threats to inequity
• The public insurance systems must response
  quickly before the whole public (SHI) systems are
  collapsed. If this happen, Indonesia will face
  more difficult situation to contain health care
  costs

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General reform currently under assessment
Hypothetical picture
Income-Population pyramid
High income
People with supplemental HI (Private)
All people are enrolled in SHI (Public)
People with various levels of subsidized premium
in SHI
Low income
Number of people
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Thank you very much
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Comparison of HCF via SI
Source