Diagnosing JKN: Addressing the Unhealthy Financial Pulse of Indonesia’s Healthcare System
After three years of surplus (2020-2022), a structural deficit has returned for Indonesia's National Health Insurance program (Jaminan Kesehatan Nasional, JKN) that is managed by the Social Security Agency for Health (BPJS Kesehatan). Moreover, this deficit seems to be widening amid inflation and rising demand for medical treatment.
The financial management of the JKN program (Indonesia’s universal healthcare program) is facing renewed challenges. Data presented to the Indonesian House of Representatives (DPR) reveals that the cost of healthcare claims is - again - significantly outstripping the revenue generated from participant premiums.
This reminds us of the 2014-2019 period. After the launch of the JKN program on 1 January 2014 (under the second Susilo Bambang Yudhoyono administration), this program faced an alarming mismatch between high healthcare claims and lower premiums, leading to a cumulative deficit that grew to more than IDR 32 trillion (approx. USD $1.88 billion) in 2019.
This development in fact raised doubts over the sustainability of the entire program. However, a collapse of the program would be a major setback for the world's fourth-most populous country as this universal healthcare program is important for further economic and social development of Indonesia. If people cannot afford healthcare when they are sick, then their futures and productivity for the economy are compromised. In fact, without the JKN program, they can become a (financial and temporal) burden for their family members and friends, which then jeopardizes the spending power and productivity of those family members and friends.
As of February 2026, the claim ratio for BPJS Kesehatan hit 111.8 percent. This means for every IDR 100 collected in premiums, the agency spends nearly IDR 112 on medical services. Prihati Pujowaskito, President Director of BPJS Kesehatan, warned that if this trend continues, the accumulated deficits will threaten the long-term sustainability of the fund.
Root Causes of the Mismatch
There are several structural and demographic factors behind the mismatch. Firstly, many participants of the program do not pay a monthly contribution because they are (near) poor. And so, it is the government that covers their monthly contribution. Reportedly, there are around 113 million Indonesians whose monthly premiums are fully paid by the state. This is a significant number considering the whole program has around 282.7 million participants. So, almost 40 percent of JKN participants are actually not paying themselves, but are covered by the state. Moreover, the state pays the lowest fee for this group (class 3); a fee that is not enough to cover the actual costs when someone requires medical treatment.
Table 1; JKN Categories:
| Category | Monthly Premium (in Rupiah) |
| Class 1 | 150,000 |
| Class 2 | 100,000 |
| Class 3 | 42,000 |
Source: BPJS Kesehatan
But that is not all, there are also 58.32 million inactive participants, with 13.8 million specifically cited for non-payment of premiums. The problem here is that in a healthy insurance system, a vast pool of healthy people who pay premiums is needed to subsidize the (smaller) percentage of people who are currently sick. When millions of people stop paying, it is usually the healthy ones who drop out because they feel they do not need it, which then leaves BPJS Kesehatan with a sick pool (a high concentration of members with chronic or catastrophic illnesses who must keep paying to receive life-saving treatment). Hence, the program's revenue drops significantly, but the total claim burden does not drop proportionally because the most expensive patients never leave. Moreover, among these 58.32 million inactive participants there are many who actually receive government support (mostly informal workers and informal entrepreneurs) in the form of a IDR 7,000 reduction (class 3), hence for them the monthly premium is as low as IDR 35,000.
Secondly, overall, the premiums are simply well too low. In other words, even if everyone paid their premiums perfectly, the mismatch problem can return. Medical inflation is high in Indonesia, while the premiums remain unchanged for years. However, if the government decides to raise premiums (targeting the middle-to-upper class as they are self-paid participants), the fear is that more people from that group might stop paying and become inactive participants, further worsening problems.
Thirdly, Indonesia has an aging population, implying that the pool of people requiring medical treatments is becoming increasingly large. But at the same time, there is also a worrying increase in diabetes and hypertension among the younger generations of Indonesia, thus leading to earlier and longer-term dependencies on the JKN program.
Fourth, reportedly, reduced central government transfers to the region governments have hampered regional governments' ability to cover their residents' premiums. Legally, a portion of the Regional Cigarette Tax is earmarked to cover JKN deficits. But if the deficit is widening despite this tax revenue, it suggests that the 'sin tax' is no longer a sufficient bandage for the program's wounds.
Proposed Interventions and Political Debate
The Indonesian government is considering a number of measures. For example, it may spend IDR 20 trillion (approx. USD $1.2 billion) to write off unpaid premiums with the reason being that this may encourage those participants to return to the system. If they have accumulated 'debt' (years of unpaid monthly premiums), then they would have to face a big bill if they would return (all those unpaid monthly premiums have to be paid). While that would still be attractive in case they suddenly have a major illness, such as cancer (because paying the accumulated years of unpaid premiums is much cheaper than paying the actual hospital treatment), this doesn't make it attractive to return when they are healthy.
Another measure would be to increase the monthly premium. Indonesian Health Minister Budi Gunadi Sadikin has hinted at this (primarily affecting the upper-middle class). However, this may discourage a lot of healthy participants to pay their monthly premiums. Many of the richer segments of society also have private health insurance, and so they are not dependent on the JKN program.
Table 2; Financial Overview JKN Program (in IDR trillion):
| 2024 | 2025 | 2026 (Jan-Feb) |
|
| Premium Revenue | 165.34 | 176.71 | 29.26 |
| Costs of Treatment (JKN) | 174.90 | 190.30 | 32.73 |
| Balance | 9.56 | 13.39 | 3.47 |
| Claim Ratio | 105.78% | 107.69% | 111.86% |
.
| 2020 | 2021 | 2022 | 2023 | |
| Premium Revenue | 139.80 | 143.32 | 144.04 | 151.70 |
| Costs of Treatment (JKN) | 95.51 | 90.33 | 133.47 | 158.85 |
| Balance | 44.34 | 52.98 | 30.57 | 7.15 |
| Claim Ratio | 68.29% | 63.03% | 92.66% | 104.72% |
Source: BPJS Kesehatan
In 2026, Indonesia is transitioning to KRIS (Kelas Rawat Inap Standar). KRIS is the new unified, standardized inpatient service for BPJS Kesehatan participants, replacing the previous class 1, 2, and 3 system. While this change was intended to simplify costs, it has faced pushback from private hospitals and participants who worry about a decline in quality for those used to Class 1.