Why Do Informal Sector Workers Not Pay the Premium Regularly? Evidence from the National Health Insurance System in Indonesia

  • Teguh DartantoEmail author
  • Alin Halimatussadiah
  • Jahen Fachrul Rezki
  • Renny Nurhasana
  • Chairina Hanum Siregar
  • Hamdan Bintara
  • Usman
  • Wahyu Pramono
  • Nia Kurnia Sholihah
  • Edith Zheng Wen Yuan
  • Rooswanti Soeharno
Original Research Article



The challenges of universal health coverage (UHC) in developing countries with a significant proportion of the labor force that works in the informal sector include administrative difficulties in recruiting, registering and collecting regular contributions in a cost-effective way. As most developing countries have a limited fiscal space to support the program in the long run, the fiscal sustainability of UHC, such as that in Indonesia, relies heavily on the contributions of its members. The failure of a large proportion of voluntary enrollees/self-enrolled members/informal sector workers (Peserta Mandiri/Pekerja Bukan Penerima Upah [PBPU] members) to pay their premiums may lead to the National Health Insurance System (NHIS) in Indonesia being unable to effectively deliver its services.


This study aims at exploring the important factors that affect the compliance behavior of informal sector workers (PBPU members) in regularly paying their insurance premium. This analysis may be a basis for designing effective measures to encourage payment sustainability in informal sector workers in the NHIS.


This study utilizes the survey data collected from three regional offices of the Indonesian Social Security Agency for Health (SSAH), which cover approximately 1210 PBPU members, to understand the relationship between members’ characteristics and their compliance behavior regarding the premium payment. We applied an econometric analysis of a logit regression to statistically estimate which factors most affect their compliance behavior in paying the insurance premium.


This study reveals that almost 28% of PBPU members do not pay their insurance premiums in a sustainable way. Our logistic regression statistically confirms that the number of household members, financial hardship, membership in other social protection arrangements, and the utilization of health services are negatively correlated with the compliance rate of informal sector workers in paying their insurance premium. For instance, people who experience financial hardship tend to have a 7.7 percentage point lower probability of routinely paying the premium. In contrast, households that work in agricultural sectors and have income stability, the cost of inpatient care incurred before joining the NHIS, a comprehensive knowledge of the SSAH’s services, and the availability of health professionals are all positively correlated with regular premium payment.


Although there is no single policy that can ensure that informal sector workers (PBPU members) regularly pay their premiums, this study recommends some policy interventions, including (1) flexibility in applying for a government subsidy for premiums (Penerima Bantuan Iuran [PBI]), especially for people who have financial hardship; (2) an intensive promotion of insurance literacy; (3) expanding the quantity and quality of healthcare services; and (4) tailor-made policies for ensuring the sustainability of premium payments for each regional division.



The authors gratefully thank the LPEM FEB UI for allowing us to explore the 2015 survey data that were collected with the support of the Asian Development Bank – Indonesia Resident Mission and BPJS Kesehatan (SSAH) for providing a list of randomly selected PBPU members in each DIVRE during the survey. The authors are indebted to Dr. Rabin Hattari (a former economist at ADB-Indonesia Resident Mission) for constructive comments in designing the study and two anonymous referees for their insightful and valuable comments to improve the quality of the manuscript.

Author Contributions

TD conceived the idea for the study. TD, AH, JFR, RN, CHS, HB, U, WP, NKS, EZWY, and RS designed and conducted a field study, and analyzed the field study report. TD prepared the initial draft of this manuscript. JFR re-estimated econometric models, and AH reshaped the flow of analysis in the revised manuscript. CHS, HB, NKS, RN, and RS contributed new data, information, and literature during the revision process. TD finalized the revised manuscript. All authors reviewed the draft manuscript and provided input to the preparation and approval of the final version of the manuscript.

Compliance with Ethical Standards


This study was partially funded by the 2019 Hibah Q1Q2-Universitas Indonesia (NKB-0190/UN2.R3.1/HKP.05.00/2019) via Teguh Dartanto (Research Cluster on Poverty, Social Protection and Human Development at Department of Economics, Faculty of Economics and Business Universitas Indonesia). Data collection for this study was supported by the Asian Development Bank–Indonesia Resident Mission.

Conflict of interest

Teguh Dartanto, Alin Halimatussadiah, Jahen Fachrul Rezki, Renny Nurhasana, Chairina Hanum Siregar, Hamdan Bintara, Usman, Wahyu Pramono, Nia Kurnia Sholihah, Edith Zheng Wen Yuan, and Rooswanti Soeharno have no conflicts of interest to declare that are directly relevant to the content of this article. Jahen F. Rezki received grants from a Humane Studies Fellowship and the Indonesia Endowment Fund for Education, but these were unrelated to the current article.

Ethical standards

Ethics approval for this study was obtained from the Ethics Committee, Faculty of Public Health, Universitas Indonesia, Indonesia (ref: 224/H2.F10/PPM.00.02/2015). In addition, a research permission letter was received from the Directorate General of Political and National Unity (Ministry of Home Affairs) at Central Government, and the Agency of Political and National Unity at Provincial and City/Municipal Government, to conduct a field study in the three provinces in Indonesia.

Supplementary material

40258_2019_518_MOESM1_ESM.docx (60 kb)
Supplementary material 1 (DOCX 59 kb)


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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  • Teguh Dartanto
    • 1
    • 2
    Email author
  • Alin Halimatussadiah
    • 1
    • 2
  • Jahen Fachrul Rezki
    • 2
    • 3
  • Renny Nurhasana
    • 4
  • Chairina Hanum Siregar
    • 2
  • Hamdan Bintara
    • 2
  • Usman
    • 2
  • Wahyu Pramono
    • 2
  • Nia Kurnia Sholihah
    • 2
  • Edith Zheng Wen Yuan
    • 1
  • Rooswanti Soeharno
    • 5
  1. 1.Department of Economics, Faculty of Economics and BusinessUniversitas IndonesiaWest JavaIndonesia
  2. 2.Institute for Economic and Social Research, Faculty of Economics and BusinessUniversitas IndonesiaJakartaIndonesia
  3. 3.Department of EconomicsUniversity of YorkYorkUK
  4. 4.Urban Studies Program, School of Strategic and Global StudiesUniversitas IndonesiaJakartaIndonesia
  5. 5.Former Staff of ADB Indonesia Resident Mission, and Health Specialist at UNICEF IndonesiaJakartaIndonesia

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