Jakarta – Local governments may need to double their contributions to the country's universal health insurance this year, to prevent the collapse of the state-run health care system, a minister said.

BPJS Kesehatan, the insurer, has seen its deficit widening almost trifold, to Rp 9.7 trillion ($728.23 million) last year, since its introduction in 2014.

"Basically, we need all parties to shoulder the cost of BPJS Kesehatan, so it would not become too heavy," Coordinating Political and Security Affairs Minister Puan Maharani said on Wednesday (21/06).

Puan said the country's 34 provinces and 531 districts should increase their contributions to BPJS Kesehatan to 10 percent of their regional budgets, from 5 percent today.

The insurer was designed to run with premiums collected from all Indonesians. On top of that, the governments pay subsidies to cover the premiums for the poor.

While all working Indonesians are obliged to join BPJS Kesehatan, only some of them actually pay. A study from the University of Indonesia shows that what BPJS Kesehatan actually pays for one person in health expenses has been, on average, more than triple the premiums they collected from each individual.

Academics suggest that the government should impose the highest tariff on cigarettes, as they cause cancer and respiratory diseases – which are now among the biggest expenses borne by BPJS Kesehatan. The proceeds from the excise should be enough to cover the health insurance deficit.

Without specifics, Puan said the government also considers "cost sharing for diseases that carry a potential moral hazard," to plug the deficit.

Other options include increasing the premiums and the government's subsidy for illnesses that need prolonged hospitalization, Puan said, adding that the government may combine all of the options to make a workable policy.

BPJS collected Rp 17.49 trillion from premiums in the January-March period, up 17 percent from the same period last year. Of the insurer's funds, 93.4 percent were in time deposits, with the remainder in bonds, as required by law.

Last year, the insurer collected Rp 67.5 trillion from premiums, up 25 percent from a year earlier. BPJS Kesehatan targets to cover 175 million Indonesian by the end of 2017, up from 164 million last year.

Source: http://jakartaglobe.id/business/local-governments-need-double-contributions-bpjs-kesehatan/