Indonesia's Supreme Court has annulled a presidential regulation issued last year that had doubled the tiered premiums on the national health insurance, a court spokesman said.
The government issued a decree to raise premiums managed by insurer BPJS Kesehatan by at least 65% in October, after the state-owned agency estimated a $2.3bn cash shortfall last year and warned that the gap could widen by 140% by 2024. The deficit has caused delays in payment to various medical service providers.
State-owned BPJS Kesehatan, which provides universal health cover, has been in financial trouble for several years, citing more payouts than premiums collected.
We will see on how to make BPJS Kesehatan more sustainable"
The Supreme Court argued that according to the 2004 Social Security Law and 2011 Social Security Agency Law, the national health insurance premium has to be at a level that matches Indonesia's economic development and also takes into account the needs of the people.
Doubling the premium during a time of stable inflation and slow economic growth would be going against the needs of the people, the judges argued.
Finance minister Sri Mulyani Indrawati said the ruling would have implications on BPJS Kesehatan's finances.
"We will see on how to make BPJS Kesehatan more sustainable," Indrawati told reporters. "It gives healthcare services for the wider public, but financially it's at a loss."
A group of patients suffering from kidney failure petitioned the court to review the decree that increased premiums, according to a report by Reuters that cited Indonesian-language news portal Detik.com.
It's not clear if BPJS Kesehatan will have to return funds to policyholders or the state following the ruling. The government pays for the coverage of some 96 million people on low income.