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Review of current health insurance system


Insurance against loss by illness or bodily injury. Health insurance provides coverage for medicine, visits to the doctor or emergency room, hospital stays and other medical expenses. Policies differ in what they cover, the size of the deductible and/or co-payment, limits of coverage and the options for treatment available to the policyholder. Health insurance can be directly purchased by an individual, or it may be provided through an employer. Medicare and Medicaid are programs which provide health insurance to elderly, disabled, or un-insured individuals. There are a number of companies which provide private health insurance, including Blue Cross, United Healthcare, or Aetna.

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									         Review of Current Health Insurance Systems in Indonesia:
                           Equity Perspectives

                          Author: Hasbullah Thabrany
                            University of Indonesia

Currently Indonesia has five categories of health insurance system that cover
about 16% of the 203 million people. In term of coverage, Indonesia is far behind
among other developing countries in South East Asia. The five categories are:
social health insurance schemes for civil servants (Askes), conditional mandatory
health insurance for private employees (Jamsostek), traditional commercial
health insurance schemes, managed care schemes (JPKM), and employer
provided health care. The Askes and Jamsostek cover about 17 million people, or
about 8% of the population. The Askes premium is 2% of monthly basic salary
while premiums for Jamsostek is 3% of monthly salary for singles and 6% for
married employees up to monthly income of one million rupiah (about US$ 100).
Due to limitation of data, Kakwani index was not calculated. Limited Lorentz
curve is provided by simulating out of pocket expenses of Askes members using
Susenas data. Various sources of incomes earned by civil servants and salary
cap for premium calculation in Jamsostek scheme have made the two social
health insurance schemes regressive. The traditional health insurance schemes
cover about five million people and all licensed managed care schemes (JPKM)
cover less than one million people. Since the nature of traditional health
insurance and managed care products (JPKM) is a commercial health insurance
using risk-based premium, the categories are the most regressive health care
financing systems. Health benefits provided by employers vary widely that is very
difficult to assess the equity aspects. Only Askes and Jamsostek schemes
potentially provide horizontal equity in health care financing. Because of rapid
expansion of commercial health insurance coverage, horizontal inequity is
becoming wider in health care financing in Indonesia.

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