Surge in Health Insurance Claims Due to Rising Medical Costs
TL/DR –
Indonesia’s health insurance claims rose by 25% year-on-year to Rp 20.83 trillion ($1.32 billion) in 2023, mostly due to the COVID-19 pandemic. This rise was consistent with the increase in healthcare costs in the country, such as facilities, service fees, medicines, and varied health tests. The increase in insurance claims has outpaced the premiums collected by firms to sustain these services, causing worries among experts and businesses over the trend’s abnormal trajectory.
Indonesia’s Health Insurance Claims Skyrocket, Sparking Concern
Indonesia’s health insurance claims registered a significant spike last year, with a 25% YoY increase to Rp 20.83 trillion (US$1.32 billion). The continuous rise in medical costs, particularly post-COVID-19, is identified as a key contributor to this upward trend. This information was revealed by the Indonesian Life Insurance Association (AAJI).
In contrast, health insurance claims grew only about 17 percent YoY in 2019, and even demonstrated shrinkage in certain prior years.
Indonesia’s healthcare costs concurrently escalated, registering a 13.6% YoY rise last year. This surge is considerably above the 11.5% average recorded in Asian countries. These numbers originate from the 2023 Mercer Marsh Benefits Health Trends report. It highlighted that Indonesia’s healthcare costs increased by 12.3% YoY in the preceding year.
“This is obviously not normal,” warned Wahyudin Rahman, the chairperson of the Indonesian Insurance Writers Community (Kupasi). He anticipates this uptrend to persist this year.
Wahyudin explained that rising healthcare costs, comprising expenses for healthcare facilities, service fees, medicines, and various health tests, primarily drove the high claim values.
Insurance Premiums Struggle to Keep Up
As health insurance claims costs skyrocketed, they exceeded the premiums gathered by insurance firms to sustain these services. This situation exacerbates concerns over the sustainability of Indonesia’s health insurance sector amid escalating healthcare costs.
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