The Role of Health Insurance, Borrowing and Aids to Pay for Health Care on Reducing Catastrophic Health Expenditure in Indonesia

Abstract

Background: Sizable out of pocket payment for health care make a hardship financing for many families and this will lead to a catastrophic expenditure. To pay health services that exceed the financial capacity of households would aggravate the economic stability of the household, which in economic terms is called catastrophic expenditure. When Households fall under the poverty line, their catastrophic spending threshold is zero. For households whose expenditures are above the poverty line, catastrophic threshold value will be difference between total household expenditure minus total minimum basic needs of the household divided by the total expenditure of the household. Based on this definition of catastrophic health expenditure, the research examines determinants of catastrophic OOP health expenditure in Indonesia.Method: This study is based on quantitative data analytic research that uses two data sources IFLS years 200 and 2007 and SUSENAS 2009 and 2010. Results: Probability of catastrophic health expenditure in such households especially being significantly influenced by economic condition. While health condition did not have significant influence to increase catastrophic health expenditure. A part of potentially catastrophic households in Indonesia (which are poor and have health problems) were not being catastrophic because they reduced health expenditure and did not use appropriate health treatment. Health cost subsidies like health insurance, borrowing money, and health care cost aids did not have influence to reduce the occurence of catastrophic health expenditure in Indonesia. Conclusion: Economic condition is the biggest factor in the occurrence of catastrophic health expenditure. Potentially catastrophic households were not being catastrophic because they reduce health expenditure and did not use health care treatment. Health cost subsidies like health insurance, borrowing money, and health cost aids have not reduced the occurence of catastrophic health expenditure in Indonesia.