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Rising medical costs lead to surge in health insurance claims
Indonesia saw health care costs rise by 13.6 percent yoy last year, much higher than the 11.5 percent average in Asian countries.
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New insurance products have been launched to help people adapt to new COVID-19 habits. (Shutterstock/thodonal88)
T
he value of Indonesia’s health insurance claims continued to surge last year with experts and businesses raising concerns over the abnormal trajectory. Rising medical costs are seen as one of the major drivers.
The total value of health insurance claims in Indonesia surged by 25 percent year on year (yoy) to Rp 20.83 trillion (US$1.32 billion) in 2023 and had been growing consistently at or near this rate since 2022, especially after the COVID-19 pandemic, according to the Indonesian Life Insurance Association (AAJI).
Health insurance claims only grew by around 17 percent yoy in 2019, while shrinking in some previous years.
At the same time, Indonesian health care costs rose by 13.6 percent yoy last year, much higher than the 11.5 percent average in Asian countries, according to a 2023 Mercer Marsh Benefits Health Trends report. In the previous year, costs rose by 12.3 percent yoy.
“This is obviously not normal,” Wahyudin Rahman, who chairs the Indonesian Insurance Writers Community (Kupasi), which hopes to educate the public, told The Jakarta Post on Friday, adding that he also expects the trend to continue this year.
The value of claims was high because of an increase in health care costs, such as the cost of health care facilities, service fees, medicines and various health tests, Wahyudin said.
As the cost of health insurance claims rose, they outpaced the premiums collected by firms to sustain these services.
