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ALERT / APRIL 28, 2026
Indonesia reforms health insurance products for enhanced risk management and cost efficiency [UPDATED]
5 MIN READ
Indonesia has introduced major changes to its regulatory framework for private health insurance products. The changes include optional copayment features, waiting periods, benefit coordination, and enhanced criteria for health insurance providers. These reforms came into effect on 22 March 2026.
Update: This article has been updated to reflect that Indonesia’s health insurance reform came into effect on 22 March 2026 under a regulation issued by the Financial Services Authority of Indonesia (OJK), replacing the earlier Circular Letter framework and the original mandatory 10% contribution requirement. The final regulation clarifies that copayments are not mandatory, and insurers must offer at least one product without such a feature.
Background
In Indonesia, Badan Penyelenggara Jaminan Sosial Kesehatan (“BPJS Kesehatan”) is the social security-funded national health insurance scheme which provides low-cost healthcare coverage to all Indonesian citizens and foreign nationals residing in Indonesia for at least six months. Private health insurance products provide broader coverage and are often employer-sponsored or purchased individually to supplement BPJS Kesehatan coverage.
On 19 May 2025, the Financial Services Authority of Indonesia (OJK) issued Circular Letter No. 7/SEOJK.05/2025 outlining new requirements for private health insurance products (the “Circular Letter”). Those changes have since been replaced by POJK No. 36 of 2025 (the “Regulation”), which came into effect on 22 March 2026. Unlike the earlier Circular Letter, which set out mandatory copayment, the Regulation provides a more flexible and non-mandatory approach.
Key details
The most relevant details for employers to note include the following:
Optional copayments
All new and renewed indemnity-based health insurance policies (where medical care costs are reimbursed up to caps set in the policy) may include an optional copayment feature, rather than a mandatory requirement.
Under POJK No. 36 of 2025, insurers are required to offer at least one health insurance product without any copayment. This feature remains optional and is regulated only where applied.
Where a copayment is applied, the policyholder’s contribution is capped at a maximum of 5% of the total claim cost for both inpatient and outpatient services, subject to monetary limits of IDR 300,000 per outpatient claim and IDR 3,000,000 per inpatient claim. Alternatively, insurers and policyholders may agree on an annual deductible, provided this is clearly defined in the policy terms.
This represents a significant shift from the earlier Circular Letter (SEOJK No. 7/2025), which proposed a mandatory minimum copayment of 10% and was widely interpreted as a compulsory requirement across all policies. The Regulation removes this approach and instead focuses on regulating the structure and limits of copayment, where such a feature is voluntarily implemented.
These changes aim to balance affordability with consumer protection while maintaining flexibility in product design. This revised approach also applies to managed care schemes, which provide comprehensive healthcare services, including promotive, preventive, curative, rehabilitative, and palliative care. While such plans typically cover most in-network costs, insurers may incorporate optional copayment or deductible structures in line with the updated regulatory framework.
Waiting period
Individual health insurance products will be required to have a waiting period (the amount of time the policyholder must wait before specific benefits may be used) of up to 30 calendar days. A waiting period of up to one year may be applied for products that provide benefits for critical, chronic, or specific illnesses, provided this is clearly stated in the insurance policy.
Group health insurance products may apply a different waiting period than those required for individual policies, based on the agreement made between the policyholder and the insurer.
Coordination of benefits
Insurers must include a feature in health insurance products that allow coordination of benefits between insurers and other insurance providers, including BPJS Kesehatan. Coordination of benefits ensures that when a policyholder has multiple health coverages, payments are properly allocated to that insurers share costs without overlaps, enabling smooth integration between commercial health insurance and national health coverage.
Underwriting and health checks
For individual health insurance policies, insurers must consider implementing medical check-ups based on risk profiles for prospective policyholders, in line with their underwriting policy at the time of policy issuance. For group health insurance policies, insurers must obtain a claims performance report from the Association of Insurance Companies and Sharia Insurance Companies (setting out information including premiums paid, claims paid, loss ratios, etc.) prior to policy placement.
Strengthening medical oversight and digital infrastructure
Insurers offering health insurance products will be required to have the following in place:
Qualified medical staff capable of clinical analysis and utilization reviews of healthcare services.
Certified health insurance staff.
A dedicated Medical Advisory Board to advise on medical policies and service efficiency.
Robust digital systems to facilitate data exchange with healthcare providers to support effective cost control, provide data-driven oversight and prevent potential fraud.
Employer action: PREPARE TO ACT
Employers should review existing health insurance plans to understand how the new requirements could affect policy design and costs.
Given the clarification under POJK No. 36/2025, employers may continue to offer full-coverage plans without copayment, while also considering this feature as an optional tool for cost management. As earlier proposals under Circular Letter No. 7/2025 have been revised and replaced, employers should monitor communications from their Lockton consultant and local insurers regarding implementation and potential impacts on existing policies.
However, existing policies renewed prior to 22 March 2026 (the effective date of POJK No. 36/2025) are generally not expected to be immediately impacted, although changes may be introduced progressively at renewal.
While not mandatory, copayment may become more common over time due to ongoing medical inflation and claims pressures, with insurers expected to offer more structured and sustainable plan designs.
Written in collaboration with:
Irwan Iswara
Director
PT Mitra Iswara dan Rorimpandey Insurance Brokers Director
irwan.iswara@mirbrokers.com (opens a new window)
Faradina Wardani
Employee Benefits, International Division
PT Mitra Iswara dan Rorimpandey Insurance Brokers
faradina.wardani@mirbrokers.com
Further Information
