Indonesia's Health Insurance Market: Growth Amid Challenges

Rising Demand and Persistent Issues

Indonesia's health insurance market is expected to continue growing, driven by increasing healthcare costs, demographic bonuses, and improved services from insurance companies. Despite this positive outlook, industry experts warn of significant challenges that need to be addressed to ensure sustainable growth.

Key Challenges in Health Insurance

1. Fraud and Excessive Treatment: Industry experts like Abitani Taim, Chair of the Higher Education of Risk Management and Insurance (STIMRA), highlight the ongoing issues of fraud and excessive medical treatment driven by commercial motives. These practices not only increase costs but also undermine the integrity of the health insurance system.
2. Medical Inflation: Uncontrolled medical inflation remains a significant concern. As healthcare costs rise, insurance companies face higher claims, which can impact their financial stability if not managed properly.

Expert Recommendations for Improvement

To address these challenges, experts recommend several key measures:

1. Strengthening Anti-Fraud Measures: Insurance companies need to enhance their anti-fraud capabilities to detect and prevent fraudulent claims. This includes better monitoring systems and collaboration with healthcare providers.
2. Empowering Medical Advisory Boards (MAB): Optimizing the role of Medical Advisory Boards can help ensure that healthcare services are provided at appropriate costs. This involves creating a mutual understanding between insurers and healthcare providers.
3. Coordination with Regulators and Industry Associations: Direct coordination with regulators and industry associations is crucial for building a healthy health insurance ecosystem. This includes discussions on policy reforms and industry best practices.

Regulatory Developments

The Financial Services Authority (OJK) has introduced new regulations, notably POJK Number 36 of 2025, aimed at strengthening the health insurance ecosystem. Experts view this regulation as a positive step, particularly the introduction of risk sharing mechanisms, which can help reduce moral hazard in health insurance.

Industry Outlook

Despite the challenges, the outlook for Indonesia's health insurance market remains positive. The OJK reports a 17.23% year-on-year growth in health insurance premiums as of November 2025, indicating robust demand. Industry experts are optimistic that with the right measures in place, the sector can achieve sustainable growth while addressing its current challenges.