Kathmandu. Medical costs in Indonesia are among the most expensive in Asia. According to the Global Asia Insurance Partnership (GAIP), medical costs in Indonesia are expected to increase by 13.6 percent in 2025. This is the highest in Asia.
The GAIP report, titled ‘Sustainable Private Health Insurance in Asia’ by Craig Thorburn, states that high medical costs are now the biggest threat to the healthcare finance system in Asia. In February 2026, Budi Herwan, president of the Indonesian General Insurance Association (AAUI), said that about 6 non-life insurance companies in Indonesia had stopped selling health insurance products due to the gap between insurance premiums and claims. This situation indicates that the health insurance industry is facing serious challenges arising from high claim burdens and product sustainability risks.
However, the Indonesia Financial Services Authority (OJK) said that health insurance claims for both life and non-life insurance are still rising. “This indicates that the claim ratio is within manageable limits. To maintain performance quality, companies must strengthen underwriting and claims management, and control healthcare costs,” Ogie Prestomino, chief executive of the authority’s Insurance, Guarantee and Pension Fund Supervisory Agency, said in a written statement.
The authority’s report states that the Indonesian authorities have proposed a mandatory 10-form copayment rule starting from 2025, taking into account concerns about the high medical trend, the volatility of a persistent claim ratio of more than 90 percent, and the impact of ethical risks and overuse. “Some concerns were raised, particularly by consumer organizations, the financial burden on vulnerable groups, the violation of the expected agreement of existing customers with full coverage, and the relatively low penetration rate of insurance in Indonesia,” the report said.
The authority negotiated with legislators. That resulted in a revised approach. It replaced the 10 percent mandatory risk-sharing model with a 5 percent alternative model. “Insurance companies will be required to offer products without risk-sharing to address concerns about benefit cuts,” the report said, adding that a medical advisory board was established to monitor the quality of service and address concerns that excessive treatment reduction efforts could lead to “end treatment.” ’
Existing insurance companies have set a transition period of December 2026 to adapt their health insurance products to the new requirements. -Agency
