Indonesian President Joko Widodo has announced that the government will review a proposed 65% hike in premiums by the state health insurer, amid protests against the government’s legislative agenda.
Widodo made the announcement after meeting with trade union leaders opposing the measure, according to a report by Reuters.
The state-owned insurer, BPJS Kesehatan, which covers over 200 million people and supports one of the world’s biggest health systems, reportedly pays out more premiums than it collects and poses a fiscal risk for Southeast Asia’s largest economy, the report said.
The proposal to raise the premiums was announced by Finance Minister Sri Mulyani Indrawati last month, aiming to ease insurer’s cash deficit, which is expected to reach IDR32 trillion (US$2.26 billion) this year.
“We will reconsider because we have to calculate things,” Widodo was quoted as saying by Reuters.
Union members held a rally outside of the finance ministry’s premises, denouncing the proposed hike, as well as other grievances.
According to officials, if the increase is not approved, the government may be forced to inject more capital in BPJS Kesehatan. The government, the officials said, is trying to avoid a repeat of a previous bailout, because of its unsustainability in the long term.
