COVID-19 Case: Does Indonesian Need Health Endowment Fund?

Abstract

This paper aims to examine whether Indonesia needs a Health Endowment Fund (HEF) as an effort to find efficiency and effectiveness of health cover fund. Since 2014, Indonesia has officially implemented National Health Insurance (NHI or Jaminan Kesehatan Nasional/JKN) according to Indonesian Law No.40/2004. The implementation of NHI is technically managed by Health Social Insurance Administration Organization (HSIAO), popularly known as Badan Penyelenggara Jaminan Sosial (BPJS) Kesehatan. Since 2014, the trend for people living with NCD increases from 2007 to 2014. This trend may lead to consequences of potential financial deficit for HSIAO in the future. Furthermore, likewise many countries, Indonesia have been facing fiscal shock due to recessions from pandemic COVID-19 and increasing deficits from health insurance claims. By applying secondary data, from IFLS 4 & 5, and the National Research and Innovation Agency (BRIN) (formerly as known as LIPI) survey in 2020, this study investigate the effect of non-communicable disease (NCD) on household expenditures to estimate the extent of HEF is needed in Indonesia. Using regression analysis the result showed that NCD was associated with household’s expenditure per capita and access to health care and on the other hand, NCD has a negative effect on subjective perceived of health status. Therefore, HEF may be a long-term solution for the financial burden may face HSIAO to mitigate fiscal shock for the government budget.