September 18, 2018 / 9:43 AM / 8 months ago

Indonesian health insurer seeks $1 bln government capital injection

JAKARTA, Sept 18 (Reuters) - Indonesia’s state health insurance provider has requested a 16.5 trillion rupiah ($1.11 billion) government bailout, after a ballooning budget deficit left hospitals and pharmaceutical firms complaining of unpaid bills.

The world’s fourth most populous country introduced universal health coverage in 2014, with the establishment of BPJS Kesehatan, but the agency has consistently operated in the red as claims paid out far exceeded premiums it collected.

BPJS President Director Fachmi Idris told a parliamentary hearing late on Monday the agency, which provides cover for nearly 200 million people, had sought a capital injection of 16.5 trillion rupiah to cover its estimated cash flow deficit, including 4.4 trillion rupiah carried over from last year.

Deputy finance minister Mardiasmo said a government audit showed the agency needed only about 11 trillion rupiah, and said about 5 trillion of that would be released next week.

Mardiasmo said the agency needed to cut costs urgently.

“So that everything is in line with the broad expectation of universal coverage, we will make health services more efficient and effective,” said Mardiasmo, who uses one name.

Starting next month, local governments also will be required to help plug the deficit by giving the agency a share of revenues from tobacco taxes, he said.

More than 28 million Indonesians out of a total of more than 250 million live below the poverty line, according to the World Bank.

BPJS charges 25,500 rupiah to 80,000 rupiah for premiums, and these rates have not changed since 2016 despite the swelling budget deficits the agency has reported each year.

A hospital association said about half of its 2,800 members had complained of being cash-strapped and under-resourced.

Some have cited problems obtaining drugs because BPJS had not paid them on time, according to Koesmedi Priharto, head of the association’s Jakarta branch.

The total amount that hospitals had billed BPJS had reached 3.5 trillion rupiah and payments were two to three months late, he said.

Some private hospitals have turned away sick patients even though they were enrolled in the coverage programme, prompting a warning from the national ombudsman, according to media reports.

BPJS spokesman Iqbal Anas Maruf said hospitals rejecting patients could be given “warnings or sanctions”. ($1 = 14,925.0000 rupiah) (Reporting by Maikel Jefriando and Agustinus Beo Da Costa Writing by Gayatri Suroyo Editing by Robert Birsel)

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