Does the National Health Insurance Program Affect Life Insurance Demand in Indonesia?
DOI:
https://doi.org/10.15408/etk.v25i1.50403Keywords:
compulsory insurance, consumer purchasing behavior, coordination of benefit, crowd-out effect, universal health coverageAbstract
Research Originality: This research pioneers a macro-institutional approach to life insurance demand by empirically proving a definitive crowding-out effect induced by Indonesia's universal healthcare mandate.
Research objectives: To investigate the dynamic impact of the state-mandated JKN program and national income on private LID in Indonesia.
Research methods: This study utilizes a Vector Error Correction Model (VECM) and structural break analysis on annual data from 2002 to 2022 to rigorously capture regime shifts, short-run frictions, and long-run equilibria.
Empirical result: The findings reveal a definitive crowding-out effect: the JKN mandate and rising compulsory insurance penetration significantly depress private LID, whereas income maintains a significant positive elasticity in the long run. Furthermore, structural break tests confirm a fundamental, permanent shift in consumer purchasing behavior post-2014, coinciding with the introduction of the JKN program.
Implications: Policymakers must orchestrate a regulatory environment that protects universal healthcare while actively sustaining the development of the private life insurance market. Insurers must innovate beyond state-overlapping benefits by developing investment-linked products and optimizing Coordination of Benefits (CoB) frameworks.
JEL Classification: D12, G22, G28, I13, I18
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