ANALYSIS OF THE IMPACT OF HEALTH INSURANCE SUBSIDY

TOWARDS POOR HOUSEHOLD ALLOCATION IN INDONESIA

Herman Ardiansyah
Magister Ekonomika Pembangunan, Fakultas Ekonomika dan Bisnis, Universitas Gadjah Mada
hermanardiansyah@mail.ugm.ac.id
Akhmad Akbar Susamto
Fakultas Ekonomika dan Bisnis, Universitas Gadjah Mada
akhmad.susamto@.ugm.ac.id

Abstract
The purpose of this literature review is to analyzed the impact of health insurance subsidy towards the
poor household in Indonesia by using IFLS wave 4 and wave 5 data, also the DiD with PSM analysis
impact method. The results of the analysis showed that health insurance subsidy does not have a
statistically significant effect on the five allocations of poor household spending in Indonesia which
include health, food, non-food, education and cigarette spending. These result remained consistent after
several experiments have been carried out by combining a number of regression models, poverty criteria,
and analysis at different levels of household poverty.
Keywords : Poverty, Health Insurance Subsidy, IFLS, DiD with PSM

INTRODUCTION
Health is one of the factors that could indicate the welfare level of a person (Wang et al, 2010). It
is because of a good health is needed to aim the individual can live productive by socially and
economically. In the other hand, poverty which is seen as a multidimensional problem is interpreted as a
condition of an individual's inability to properly access all the basic needs (Korankye 2014). In this
multidimensional poverty concept, these basic needs are reflected in a several dimensions, one of is
health dimension (Ningrum, et al 2019).
There are at least two reasons why health and poverty issues are so important. First of all, poor
health does not only affect on the poverty conditions, but on the contrary poverty is also considered as a
risk of a poor health (Kisa, et al 2009). This is because the poor group tends to have a minimal health
access, even financially facing higher catastrophic health care costs than wealthier people (Hamid et al,
2014; Khan et al, 2017). Catastrophic here is a condition of financial disaster caused by greater health
expenditure relative to household income (Situmeang and Hidayat, 2018).
Second, the high cost and limited ability (income) to access the health services can be a burden to
the economic conditions of the whole poor family.