Bad timing as economic condition not at its best: Industry group

Labor-intensive industries such as textiles and footwear have expressed concern over the government’s plan to increase premiums payable to the Health Care and Social Security Agency (BPJS Kesehatan), which manages the national health insurance (JKN) program, amid its severe financial deficit.

Under the proposal, the income ceiling to be used as the basis for calculating the premium for privately employed workers will be increased from Rp 8 million (US$563.63) to Rp 12 million. Meanwhile, the cost-sharing scheme will remain the same, which is 4 percent of a worker's premium paid for by the employer and the remaining 1 percent borne by the worker.

The government has also proposed to double premiums paid by “independent workers”, whose premiums are paid outside of the cost-sharing structure between employees and employers. Aside from freelancers, workers in the informal sector also fall into this category.

“The current premiums are too low compared to the amount of money BPJS Kesehatan has to disburse,” its president director, Fahmi Idris, told members of the House of Representatives commissions IX and XI on Monday.

In 2019, the social insurance will pay an average of Rp 50,700 in claims monthly per person, but the average monthly premium is only Rp 36,000 per person, he explained.

“We project the claims that we need to pay could reach Rp 220 trillion in 2024. If there are no changes in premiums, our deficit will continue to rise to Rp 77.9 trillion [in the next five years],” Fahmi stressed.

The House eventually rejected on Monday the government’s proposal to increase premiums for independent workers and nonworkers in third-class medical services until the authority completed sorting its data. It also urged the government to seek other policies to plug BPJS Kesehatan’s deficit.

Despite the urge to stop money bleeding from the program, businesses have voiced objection to the proposal, saying the plan will put more pressure on their already struggling industries.

One vocal opponent is Indonesian Textile Association (API) chairman Ade Sudrajat, who said the proposal came at a bad time because the economy was not in its best condition as the real sectors, including the textile industry, were experiencing low sales due to the public's weak buying power.

“[The raise] will affect our operating costs, causing us to endure a heavier burden in terms of labor costs,” he said over the phone.

Due to its labor-intensive nature, the garment industry has to bear labor costs of up to 15 percent of total expenses, Ade said.

Meanwhile, even though its production relies heavily on machinery, Indonesian Association of Synthetic Fiber Producers (APSyFI) chairman Redma Gita Wiraswasta said that the increase in BPJS Kesehatan premiums would eventually reach the industry.

“The raise will not impact us directly, [but indirectly as the costs are passed on to the upstream],” he said in Jakarta on Monday, adding that the bigger burden the textile industry had to endure could slow demand for raw materials from his industry.

Indonesian Chamber of Commerce and Industry (Kadin) deputy chairwoman Shinta W. Kamdani said the raise would affect companies’ operating costs, but she also added that the raise should not be too heavy on them as the proposed raise would not affect the ratio paid by employers.

“We are aware that BPJS [Kesehatan] is in need of more revenue, but it shouldn’t harm us, so we need to discuss this further,” she went on to say.

Similarly, Indonesian Footwear Association (Aprisindo) executive director Firman Bakri told the Post that the raise in the ceiling of the new BPJS Kesehatan premium scheme would hardly affect the industry as the cost would remain the same for most of its workers.

Separately, Indonesian Employers Association (Apindo) chairman Hariyadi Sukamdani said it would be fine if the government’s proposal was realized, emphasizing that the most important thing for him was that the cost-sharing scheme between workers and employers would not change.

Under the mandate of Presidential Regulation (Perpres) No. 82/2018, the BPJS Kesehatan’s premium is to be reviewed every two years. Meanwhile, the current premium has been unchanged since 2016, as per Perpres No. 28/2016.

Instead of raising premiums, Ade of the API suggested the government create a better social insurance system in terms of hospital claims processes, the maximum portion of claims that it covered and premium collection so that it could optimize its revenue.

“If it just increases the premiums, it looks like the government is absent or idle. It should take over the burden first and give subsidies until the system changes,” he said. (awa)

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