The Impact of Health Insurance Programs on Out-of-Pocket Expenditures in Indonesia: An Increase or a Decrease?

Budi Aji, Manuela De Allegri, Aurelia Souares and Rainer Sauerborn
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Budi Aji: Institute of Public Health, Faculty of Medicine, University of Heidelberg, Im Neuenheimer Feld 324, Heidelberg 69120, Germany
Manuela De Allegri: Institute of Public Health, Faculty of Medicine, University of Heidelberg, Im Neuenheimer Feld 324, Heidelberg 69120, Germany
Aurelia Souares: Institute of Public Health, Faculty of Medicine, University of Heidelberg, Im Neuenheimer Feld 324, Heidelberg 69120, Germany
Rainer Sauerborn: Institute of Public Health, Faculty of Medicine, University of Heidelberg, Im Neuenheimer Feld 324, Heidelberg 69120, Germany

IJERPH, 2013, vol. 10, issue 7, 1-19

Abstract: We used panel data from the Indonesian Family Life Survey to investigate the impact of health insurance programs on reducing out-of-pocket expenditures. We employed three linear panel data models, two of which accounted for endogeneity: pooled ordinary least squares (OLS), pooled two-stage least squares (2SLS) for instrumental variable (IV), and fixed effects (FE). The study revealed that two health insurance programs had a significantly negative impact on out-of-pocket expenditures by using IV estimates. In the IV model, Askeskin decreased out-of-pocket expenditures by 34% and Askes by 55% compared with non- Askeskin and non- Askes , respectively, while Jamsostek was found to bear a nonsignificant effect on out-of-pocket expenditures. In the FE model, only Askeskin had a significant negative effect with an 11% reduction on out-of-pocket expenditures. This study showed that two large existing health insurance programs in Indonesia, Askeskin and Askes , effectively reduced household out-of-pocket expenditures. The ability of programs to offer financial protection by reducing out-of-pocket expenditures is likely to be a direct function of their benefits package and co-payment policies.

Keywords: health insurance; out-of-pocket expenditures; panel data analysis (search for similar items in EconPapers)
JEL-codes: I I1 I3 Q Q5 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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