Indonesia’s move to eliminate arrears in the national health insurance scheme — amounting to around Rp 20 trillion — is a bold policy measure aimed at easing the debt burden of BPJS Kesehatan. However, government officials caution that the write-off plan is only sustainable if underlying inefficiencies in the system are addressed. This article examines the proposed BPJS arrears elimination, the sources of inefficiency identified by finance ministers, and what reforms are required for lasting impact.

The Context: Why Eliminate BPJS Arrears Now

The Indonesian finance ministry announced that in the 2026 budget, a provision of approximately Rp 20 trillion is set aside to eliminate outstanding contributions owed under BPJS Kesehatan. The move responds to mounting operational deficits and aims to give breathing room to the national health insurance scheme so it can continue providing services without financial collapse. Officials emphasise that without the write-off, the growing arrears threaten to affect service delivery and the viability of the system.

However, the decision to eliminate arrears does not come in a vacuum. The finance minister has publicly flagged several inefficiencies within BPJS, including overly expensive hospital equipment mandates and sub-optimal IT systems. These cost burdens and operational weaknesses must be remedied if the debt relief is to be meaningful and not simply delay future problems.

What Inefficiencies Are Holding Back The System?

Several structural issues have been highlighted by government officials as contributing to the accumulated arrears and looming system risk:

Expensive Equipment Mandates: Some policy rules require hospitals to purchase costly equipment — such as specifying ventilator quotas post-pandemic — even when utilisation is low. These fixed cost burdens increase claims submitted to BPJS and create disproportionate expense without corresponding service improvement. The finance minister cited such mandates as examples of rules that need immediate revision.

IT and Claims Management Weaknesses: BPJS currently oversees a large IT workforce (some 200 personnel) but has been criticised for lacking full integration and advanced analytics capable of detecting abnormal claims or fraud. Officials argue that better-integrated systems, including artificial intelligence capabilities, would help identify waste, reduce false claims, and streamline service delivery. Without such improvements, eliminating arrears may simply mask systemic leakages.

Governance and Cost Control: The accumulation of arrears suggests that cost control mechanisms and governance processes have not kept pace with the growth in participants and complexity of service offerings. Uneven management at regional branches, inconsistent contract terms with healthcare providers, and unclear accountability measures all contribute to rising debt and inefficiency.

Why Addressing Inefficiencies Matters For The Write-Off

Eliminating Rp 20 trillion in arrears is a substantial fiscal commitment, and the government has made clear that this relief is conditional on BPJS undergoing reform. Simply forgiving debt without process improvements risks repeating the same cycle. When inefficiencies remain, the next wave of arrears could grow even faster.

From a service delivery perspective, failure to improve systems means participants and providers may continue to experience delays, mis-billing, and resource misuse. That undermines public confidence and the financial sustainability of the health insurance scheme.

Moreover, from a fiscal viewpoint, the write-off must be regarded as a one-time reset rather than an ongoing subsidy. If the system remains inefficient, government budgetary pressures may return, forcing higher premiums or reduced benefits. In short, the write-off is only valuable if it buys time for substantive reform rather than simply deferring the problem.

What Needs To Happen For Reform To Succeed

To ensure that BPJS’s arrears elimination plan leads to a more sustainable system, several reform priorities must be pursued:

Revise Outdated Mandates & Align Incentives: Rules that force hospitals or healthcare providers to purchase expensive equipment or meet quotas irrelevant to current utilisation should be reviewed. Incentives should reward efficiency and outcomes, rather than compliance with outdated mandates.

Modernise IT Systems & Claims Analytics: Integrate the fragmented IT architecture across regional and national BPJS offices, deploy analytics and artificial intelligence to flag aberrant claims and detect fraud early. A real-time monitoring dashboard could improve transparency and enable faster corrective actions.

Strengthen Governance, Contracting & Accountability: Standardise contract terms with providers, enforce performance standards, deploy audit frameworks, and tie reimbursements to outcomes. Regional offices should adopt best practices from high-performing branches, and provider-networks should be monitored for compliance.

Engage Stakeholders in Change Management: Providers, hospitals, regional governments and BPJS staff should be involved in the reform process so they understand the cost pressures and the need for efficiency. Training, communication and clear metrics will help to shift organisational culture toward service-plus-value rather than volume-plus-cost.

Monitor Outcome Metrics & Continuous Improvement: Beyond cost and debt metrics, track indicators such as claims processing time, service delay, participant satisfaction, fraud detection rate, and equipment utilisation. Use these to guide continuous improvement and hold units accountable for performance.

Why The Write-Off Could Be A Turning Point

This moment offers a window of opportunity. The combination of a large debt relief and clear public commitment from the finance minister means BPJS has a rare chance to reset. If the system acts now, the era of large unattended arrears might be over and replaced by a healthier, more sustainable national health coverage model.

For participants, this could mean more reliable service, fewer disruptions and a system that is better governed. For the government, it reduces the risk of future fiscal shock and improves the credibility of public health financing. For the health sector, the reforms may encourage provider innovation and smarter cost structures.

Yet, the reform will not occur by itself. Avoiding a return to arrears growth will require discipline, transparency and measurable progress. The write-off is not an end in itself, but a launchpad for deeper change.

Conclusion

The plan to eliminate BPJS arrears to the tune of Rp 20 trillion marks a pivotal moment for Indonesia’s health system. But the success of this initiative depends on whether underlying inefficiencies are addressed. Equipment mandates, weak IT infrastructure, governance lapses and cost escalation all threaten to undermine the financial reset unless targeted reforms are implemented. If BPJS can leverage this moment to modernise, streamline and improve, then the write-off may inject renewed resilience into the national health insurance scheme. Otherwise, the debt relief may turn into another pause before the next fiscal crisis.