Medical inflation fuels healthcare cost surge, insurance policyholders face mounting pressures

Jakarta, Kompas.com – Medical inflation has been a key driver behind rising healthcare costs in recent years. In Indonesia, medical cost increases have exceeded the national economic growth rate of approximately 5%, indicating that healthcare service tariffs are rising significantly faster than the average citizen’s economic capability. This has also raised concerns among the public about the sustainability of their health coverage, particularly regarding insurance costs remaining affordable amid rising disease risks and treatment expenses.

Rising healthcare costs are evident in Indonesia’s increased healthcare expenditure. World Bank data shows per capita healthcare spending rose from approximately $118 in 2019 to $132 in 2023. This trend is reflected in Allianz Indonesia’s 2020-2025 data on average costs per case for various illnesses. Average costs for heart disease have surged 219%, followed by a 169% increase for stroke. Other illnesses with notable cost rises include cancer (17%), dengue fever (18%), and typhoid (11%).

Stroke, heart disease, and cancer are concerning as they are no longer limited to elderly populations but increasingly affecting working-age individuals, while also causing significant spikes in treatment costs, he said in a statement on Thursday, 28 May 2026.

From the insurance industry’s perspective, medical cost rises, primarily driven by medical inflation, have led to adjustments in health coverage costs. This is one measure to ensure benefits remain viable for policyholders amid ongoing medical inflation.

‘M medical cost rises affect not only hospitals or the healthcare industry, but also how people prepare their financial protections,’ said a spokesperson. ’ Amidst rising medical inflation, Allianz is committed to helping people feel secure and protected. We also urge policyholders to regularly review their coverage to ensure optimal health protection,’ he added.