IO, Jakarta – The Government’s decision to increase Health Social Insurance Administration Organization (Badan Penyelenggara Jaminan Sosial – “BPJS”) Fees per 1 January 2020 as a means to mitigate its sharp deficit has been widely criticized. It is common knowledge that BPJS Health has continuously been in deficit since 2014. In fact, the 2019 deficit is estimated to hit IDR 32.84 trillion.
The Government’s raising of Health BPJS fees by more than 100% is frankly wrong. Imagine, Class 1 monthly fees increase from IDR 80,000.00 to IDR 160,000.00, while Class 2 goes up from IDR 51,500.00 to IDR 110,000.00 and Class 3 from 25,500.00 to IDR 42,000.00 a month. Committee IX and XI of the House (DPR-RI) have already held meetings with the Ministry of Finance; the outcome was a rejection of the proposal for fee increase for Class 3. In other words, DPR approves the Health BPJS fee increases for Classes 2 and 1.
Former Coordinating Minister of Maritime Affairs Rizal Ramli has criticized the Government for its clumsiness in seeking a resolution for the swelling Health BPJS deficit, which has been looming from the first year of its establishment. Ramli suggests that if the Government can cut interest payments on Government Bonds by raising interest rates by 2% (totaling IDR 300 trillion a year), it should not be difficult for them to cover Health BPJS deficits, at only IDR 32 trillion.
Designed for Failure
Rizal Ramli suggests Health BPJS has been “designed” for financial failure since the time of its establishment. It is no wonder that it is always haunted by budget deficits. “We can say that it is deliberately ‘designed’ for financial failure. Remember, ‘designed’ with quotation marks. This is what we need to correct,” he said.
Rizal notes financial failure from a number of indications. First, the Government was reluctant to set up Health BPJS from the beginning, obvious from statements made in 2009 to 2014, that Indonesia does not need a National Social Security System (Sistem Jaminan Sosial Nasional – “SJSN”), even though regulations relating to it were signed in 2004 – because it was deemed that the nation cannot yet afford it. “This, despite Russia and the Scandinavian countries having established their own SJSN in the 1860’s, at a time when they were considerably poorer than Indonesia was in 2010,” he said.
Second, Rizal hints that the Government deliberately triggered the failure of BPJS, as it only budgeted IDR 5 trillion in base capital. He considers this amount to be far too small to cover the needs of social security in Indonesia. Furthermore, the premiums stipulated by the Government are tiny in comparison to existing needs. Initially, the Government imposed 1% of workers’ income and 4% of employing companies. “This, while our closest neighbor, Singapore, sets worker contribution at 6% to 8% and employer contribution at 13%, the same as in Malaysia,” he said.
Rizal further mentioned Coordinating Minister of Maritime Affairs Luhut Binsar Panjaitan’s proposal to beg Ping An Insurance, a Chinese state company, to help resolve the issues faced by Health BPJS. He warns that any participation of the China-based company would potentially endanger our national sovereignty, as they can freely access the data of our citizens who participate in the Health BPJS scheme. “In the current digital era, whoever controls data is the winner,” he said. “Luhut should be called the Honorary Ambassador of China. What suggestion does he ever make that is not related to China somehow?”
Rizal then challenged the Government to allow the Indonesian Labor Union Confederation (Konfederasi Serikat Pekerja Indonesia – “KSPI”) Chairman Said Iqbal to provide other solutions to suppress persistent deficits in BPJS Health. He believes that Iqbal has the capability, as he was one of the original initiators of the BPJS Law; Said Iqbal can generate a more comprehensive strategy than merely doubling BPJS fees within a month.
“If the Government is unable to resolve the BPJS issue comprehensively, instead of merely doubling fees and begging China for help, we suggest that Mr. Jokowi ask Said Iqbal, KSPI General Chairman, for help in establishing a workers and experts’ committee instead. We believe that they can arrive at a solution within a month,” he said in the book launching and review of BPJS Dalam Pusaran Kekuasaan (“BPJS in the Maelstrom of Power”) held at the Parliamentary Complex in Jakarta on Friday (06/09/2019).
A Huge Burden
KSPI General Chairman Said Iqbal agreed with Rizal that the fees were much too small. When first approved, BPJS fees were only IDR 19,000.00 for Class 3 participants, now adjusted to IDR 23,000.00. “Yes, it might as well be designed for failure. The Government set the individual monthly fees at IDR 19,000.00, while World Bank calculations set the minimum fee that can cover expenditures at IDR 36,000.00 per person a month. Naturally it would fail and suffer a deficit,” he said.
However, if the Government raises BPJS fees, the ones who will feel the bite most are workers with minimum monthly wages of IDR 2,000,000.00, for example those in Sragen, Boyolali, and Yogyakarta. The other group that would suffer is small-time entrepreneurs who are classified as “Non-Wage-Earning Participants. “The Government should not play around. Raising BPJS fees is not that easy – don’t act as if the people’s income is equal throughout the country. Those earning a IDR 2,000,000.00 minimum wage and less find it to be an acute burden,” he said.
House Deputy Speaker Fadli Zon stated that the Government’s plan to increase health security fees negates the social function that BPJS Health as an agency must uphold. The increase of Health BPJS fees should not be imposed on the people, as it goes against the very idea of social security. “Referring to the initial calculations made during BPJS’ establishment, the premiums paid by the people would never fully cover funding. This is where we went wrong – we position BPJS as a pure insurance company. The State should have put the Social Security system as an instrument that helps the productivity of its citizens,” he said.
Fadli further stated that the Constitution has already mandated the Government that laws should ensure that everyone has a right to physical and spiritual welfare, to shelter and to obtain health services. “Whoever is in power in Indonesia must implement the mandate of the Constitution. Starting from this premise, we cannot consider all issues relating to BPJS Health directly by logic of the health actuarial regime. This is because BPJS is not pure insurance, but a social security system. Since BPJS is the State’s social security instrument, the State must consider citizens’ actual ability to pay fees,” he complained.
Putting the burden on the people to pay premiums imposes damage many fields, starting from the wage system, workers’ welfare, etc. The proposal to increase BPJS Health fees as a means to cover deficits is ironic. On one hand, the Government wants to increase fees due to deficits, but on the other hand BPJS Health has already reduced medical coverage and benefits for participants. “This represents poor Social Security management. We need to evaluate the institution, the organization, the HR, and we need to see how far the BPJS system is transparent and accountable,” he said.
Fadli further stated that the budget set for health in this country is too low. This is the root of the problem in implementing health Social Security in Indonesia. Ideally, the proportion of a health budget to the GDP is about 10%, even though the Health Law mandates about 5%. Therefore, BPJS Health should not be brought in as an actuarial issue, as we need to view the issue comprehensively. “Our health budget is IDR 110 trillion, while our State Budget is IDR 2,200 trillion,” he said. Fadli further stated that health budget to the GDP is only 2.8%. In other words, everyone in Indonesia only gets USD 112.00 funding or equal to IDR 1.5 million per person per month.
Paying One’s Own Way
Health BPJS President Director Prof. Dr. dr. Fachmi Idris claims that the low fees of BPJS, especially that of Class 3, have caused the BPJS deficit. He firmly stated that the fees, which amounts to no more than IDR 1,000.00 a day for Class 3 participants, are simply insufficient. “We absolutely have no intention to burden or trouble the people by increasing BPJS fees. Even if we manage to resolve the National Government Internal Auditor (Badan Pengawasan Keuangan dan Pembangunan – “BPKP”) findings on inefficiency in BPJS, the resultant savings would not be enough to cover the deficit,” he said.
A BPKP audit shows that 10,654,530 National Social Security participants are still of unclear status, as it is unclear whether they are truly “able” or “poor”.
Fahmi proposed three solutions to cover the deficit: First, adjust fees; second, reduce expenditures by regulating BPJS benefits; and third, adding subsidy funds that have been used so far. “BPJS Class 3 fees at IDR 25,500.00 are subsidized, reducing them from the actual coverage amount of IDR 53,000.00. It is the same with Class 2 fees, reduced from the actual IDR 63,000.00 to IDR 51,000.00. We only do not give any discount to Class 1 at Rp 80,000.00. Therefore, we ask that those who are able to pay the fees themselves, i.e. to pay without subsidies, do so. Let the State cover only those who are really poor,” he said. (Dan)