Work package 5

Indonesia – The impact of extending social health insurance coverage to the poor (Askeskin)


Indonesia provides an interesting study area within the framework of this proposal. Poverty, vulnerability to shocks and public services delivery are major policy concerns. Although steady improvements are being observed and the negative effects of the economic crisis seems to have been overcome, health care utilization and public spending still falls behind that of its South-East Asian neighbors, while inequality in health care utilization is relatively high. This inequality is of particular concern in light of Indonesia’s adoption of fiscal and (partly) political decentralization in 2001, leaving public service delivery largely dominated by district administrations. As a result, large variations in district public revenue imply larger variation in public spending.

The combination of low utilization rates and high inequality may be one explanation for observed spending patterns. Recent research shows low incidence of catastrophic health spending in Indonesia compared to other Asian countries, partly reflecting a low propensity to spend on health care. However, there is large variation across the population, with the non-poor spending a larger share of their budget on health care. These spending patterns may simply reflect income effects. Alternatively, they could be due to price subsidies for public health care targeted specifically to the poor that have been in operation since the economic crisis of 1998.

Prior to 2005, social health insurance coverage was restricted to civil servants (Askes) and private sector workers in firms with more than 10 employees (Jamsostek).

The intervention

In 2005 the government introduced Askeskin, a public health insurance programme targeted to the poor. This entitles an insured household to free basic health care at public health clinics (through the Puskesmas network) and inpatient services at public third class hospital wards. In addition, Askeskin operates supporting activities, such as providing special health services to remote areas and isolated islands. Targeting of health insurance is decentralized to district governments, who in turn rely on a network of health centers, midwives, and village officials and organizations to identify the neediest. Organization of third class hospitals and management of the Askeskin insurance fund is provided by PT Askes, a state owned heath insurance company.

Askeskin follows a number of public schemes that met with some success in improving access to health care through targeted price subsidies, such as the social safety net health card. However, some concern regarding the effectiveness of Askeskin remains. For example, anecdotal evidence finds that the pilot programmes suffered from administrative and targeting problems, lack of information on the scope of the insurance packages, (perceived) inferior quality of subsidised care and stigmatisation. Travel and other indirect costs remain obstacles to seeking health care, while insured care does not always turn out to be free in practice.


The broad aim of the study is to gauge the potential for public health insurance to adequately address the existing barriers to health care in Indonesia and to afford effective protection against the risks of health payments. Specifically, the objective is to identify the extent to which the extension of social health insurance cover to the poor in 2005 has had an impact on health care utilization, OOP health payments and household living standards.