ABSTRACT
This chapter explains the impacts of private sector involvement in health insurance in Indonesia are in the fields of economics, politics and culture. One of the impacts of the 1997 financial crisis was the trend to privatization causing a shift in both responsibility for, and management of, hospitals from the government to the private sector. Health is an essential part of human development. The country's prolonged financial crisis and political uncertainties, plus escalating health costs, have contributed to the people's growing awareness of health insurance. The urban and rural population under the poverty line has increased sharply from 15 percent before the crisis to approximately 40 percent afterwards, causing the World Bank and the government to set up jointly a Social Safety Net covering health and education. The per capita gross national product in 1987 was US$490, in 1996 more than US$1,000, but after the 1997 crisis it was back down to around US$500.
