Insurance sector faces new regulations and rising recovery costs

Indonesia has introduced new health insurance regulations via Financial Services Authority Regulation No. 36 of 2025. The Indonesian Life Insurance Association (AAJI) has expressed support for these rules, which aim to address rising medical inflation and healthcare costs. Under the new framework, policyholders will be required to pay a 5% co-payment on claims, with outpatient costs capped at approximately $16.90 (Rp300,000) and inpatient costs capped at $169.10 (Rp3m). Additionally, deductibles will be applied annually rather than per event, and insurers are permitted to review premiums once per year.

In a separate study regarding critical illness, Singlife reported that the financial burden of recovery extends far beyond hospital bills. Findings indicate that 80% of critical illness survivors utilize retirement savings to cover costs. While hospitalization insurance covers many medical needs, out-of-pocket expenses for deductibles and co-payments can average $36,000. Total treatment and recovery costs, including rehabilitation, medication, and specialist consultations, can reach an estimated $169,000 over an average recovery period of 27 months.