Govt urged to innovate to finance BPJS

As concern grows over the financial sustainability of the National Health Insurance (JKN) program, experts have urged the government to look for innovative ways to pay for the program.

The head of the Health Ministry’s research and development division, Tjandra Yoga Aditama, said on Wednesday that the main challenge of the ambitious program, targeted to provide universal health care to all Indonesians by 2019, was financial.

“[The expenditure for the JKN program was] only 14 percent of total healthcare expenditure in 2014, when the Healthcare and Social Security Agency [BPJS Kesehatan] spent US$4 billion a year, not very much compared with US healthcare financing,” he told an audience at the Asia Public Policy Forum held by the Harvard Kennedy School in Jakarta.

But this year, spending on the JKN program could increase to $7 billion following a torrent of new subscribers.

“The challenge now is how to increase the financing,” Tjandra said.

That challenge looks daunting. A recent study by the University of Indonesia (UI) public health department predicted BPJS Kesehatan would have an accumulated deficit of Rp 173 trillion ($12.5 billion) by 2019 if the government continued with the current payment scheme for the JKN program.

BPJS Kesehatan has been stricken by financial difficulties since late last year, suffering from a deficit of claims it has paid against premiums it has received. In 2014, the deficit stood at Rp 1.54 trillion, with
Rp 42.6 trillion paid out in claims and Rp 41.06 trillion received in premiums, the agency reported.

As the government is at risk of having to inject funds into the ailing health agency, Mukul G. Asher, professional fellow at the Lee Kuan Yew School of Public Policy, said the Indonesian government had to find innovative ways to increase its fiscal space.

“The first area of fiscal space is from higher [economic] growth. Indonesia’s growth is around 5 percent at the moment, and with reform it could go up to 6 percent. That one percentage GPD will give a lot of fiscal space,” he told The Jakarta Post on Wednesday, adding that the government could also create more fiscal space by collecting more taxes.

“Indonesia needs to expand the tax base, meaning more numbers of individuals and companies should be paying more taxes than they are now. Indonesia also needs to reduce the avoidance and evasion of customs duties and so on. Broadening the tax base, rather than working on the rates, would be useful,”
Asher said.

Ramon Pedro Paterno from the Universal Health Care Study Group at the University of the Philippines’ Institute of Health Policy and Development Studies concurred, saying that taxes were fundamental for a sustainable healthcare system.

“You can’t rely on social health insurance alone to generate sufficient revenues in the near future. I think until 2019, you still have to add a lot of tax money. It’s now a question of political will, convincing the minister of finance that even if you have social health insurance, you still have to depend on taxes,” he told the Post on Wednesday.

One of the ways to utilize tax money more efficiently was to earmark tobacco taxes for the health budget, as the Philippines government had been doing, Paterno said. - Source:

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