National Health Insurance Reform in Indonesia: Health Care Usage and Expenditure Patterns When Expanding Population Coverage

ABSTRACT In 2014, Indonesia took a large step toward Universal Health Coverage and protection from the economic risk of illness—previous health insurance schemes were joined aiming to cover the entire population. This reform made it the largest single‐payer public health insurance scheme worldwide, which covered approximately 77% of Indonesian households in 2020. I study how this reform changed individual health care usage and health expenditure, focusing on changes beyond the previous fragmented public insurance schemes. I apply two versions of difference‐in‐difference estimation to 10 rounds of the Indonesian socio‐economic survey (SUSENAS, 2011–2020). Like in previous studies with shorter datasets, I find significant increases in inpatient care usage associated with coverage expansion, particularly in public hospitals. In addition, I show that these increases tend to be stronger among households that were already insured before the reform. I do not detect strong changes in outpatient care usage or health expenditure. These findings suggest a reduction in the economic risk of illness associated with the health insurance reform but highlight in the equity dimension the need to make these benefits accessible for the large, newly eligible population.