PREMIUM MODELING WITH QUADRATIC UTILITY PRINCIPLE FOR HEALTH INSURANCE COST SHARING SCHEME IN INDONESIA BASED ON HOSPITAL TYPE

• Main Author: Ghina, Nadiyatul
• Format: Theses
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/76452
• Institution: Institut Teknologi Bandung

In Indonesia, the health insurance system is divided into two groups, national health insurance and commercial insurance. National health insurance is insurance that must be owned by the entire population. This is so that people can have guaranteed health protection. In an effort to provide health services for the entire population, Indonesia’s national health insurance has implemented the Jaminan Kesehatan Nasional (JKN) program. This program aims to improve the accessibility and quality of health services, and reduce the financial burden borne by participants in obtaining health services. With the JKN program, it is expected that all Indonesian citizens will be able to obtain proper health services in accordance with medical needs without having to worry about high costs. However, the national health insurance program is experiencing financial difficulties. This is due to the large losses incurred by the national health insurance, especially due to the high amount of participants who use health services for catastrophic diseases that require long and costly treatment. This is one of the reasons for the deficit. Therefore, a cost-sharing scheme was introduced as a step in reducing the deficit experienced by the national health insurance. In this study, a cost-sharing scheme is designed for participants who have both national health insurance and commercial insurance. This scheme applies the principle of proportional reinsurance, in which part of the risk borne by national health insurance is shared with commercial insurance. The designed cost sharing scheme considers the balance and interests of all parties without reducing their rights. The principle of equal utility is an important foundation in the implementation of this scheme, linked to the quadratic utility principle. The use of the quadratic utility principle is adopted because it can generally represent the preferences of individuals and companies, and reflects decision-making behavior in various economic contexts. Furthermore, the optimal proportion of cost sharing is determined by maximizing the utility of national health insurance and commercial insurance. The resulting proportion of the cost sharing scheme becomes a reference for national health insurance in sharing losses with commercial insurance, in the hope of reducing the claim burden that must be borne by national health insurance. In addition, the cost sharing scheme also resulted in a premium model that can be offered by commercial insurance to participants. In modeling premiums for losses covered by commercial insurance, the approach of generalized linear models (GLM) is used. Thus, the implementation of this cost sharing scheme not only provides financial benefits for national health insurance, but also forms the premium calculation basis for commercial insurance.