Medical Inflation Rises, But Health Insurance Claims Decreas, Why?

Insurance (Doc. Ist)

Printble.biz.id - The Health Insurance Claim Ratio in Indonesia Drops Significantly in 2024

The health insurance claim ratio in Indonesia has seen a significant decline in 2024. Previously at 97.5% in 2023, it has now dropped to 71.2%.

This decline is attributed to insurance companies implementing stricter risk management strategies, one of which includes repricing (premium price adjustments) in 2024.

In addition to repricing, the Chief Executive of Insurance, Guarantee, and Pension Fund Supervision at the Financial Services Authority (OJK), Ogi Prastomiyono, explained that this decrease in claims is also influenced by improved governance and adjustments to health insurance product features.

Currently, many health insurance products use an "as charged" system, where claims are paid according to hospital bills rather than being limited to a fixed ceiling.

"To improve governance and enhance the underwriting process for health insurance products, OJK plans to issue the Health Insurance RSEOJK regulation, which includes provisions for the establishment of a Medical Advisory Board (MAB)," Ogi stated in a written response.

Despite the decline in insurance claims, medical inflation in Indonesia has risen sharply.

In 2024, medical inflation reached 10.1%, significantly higher than general inflation, which was only 3%. In fact, Indonesia’s medical inflation is higher than the global average of 6.5%.

To improve governance and refine the risk assessment (underwriting) process for health insurance products, OJK plans to introduce a new regulation, the Health Insurance RSEOJK.

A key aspect of this regulation is the formation of the Medical Advisory Board (MAB).

The MAB is a medical advisory team within insurance companies responsible for evaluating claims, assessing the health risks of prospective policyholders, and detecting potential fraud in claims.

With the MAB, insurance companies can ensure that submitted claims accurately reflect the policyholder’s medical condition.

Additionally, the MAB will collaborate with hospitals and healthcare providers to ensure quality services for policyholders.

Supported by specialist doctors and medical professionals, the MAB is expected to help insurance companies maintain a balance between profitability and customer protection.

According to Ogi, if the MAB system is properly implemented, it could enhance the efficiency of health insurance claim management.

Moreover, the MAB does not necessarily have to be individually owned by each insurance company. Instead, it can be shared, making it more effective and efficient.