To Centralise and Decentralise the Indonesian Social Insurance: Dispensing the Burden of Poverty, Informality and Work Casualisation

The Indonesian national social security was put into effect as part of the country’s post-crisis welfare policy reform. The government chose to centralise many extant local social policy programs in early 2000’s, with an ambition to achieve a universal coverage. Yet, after a decade from its launch in 2014/15, more regulations were issued to delegate portion of financial responsibilities of the system to the sub-national governments, especially regarding subsidies and payments for low-income citizens and short-contract workers. These new ‘policy layers’ were added into the core policy to accelerate coverage while aiming to share the financial burdens between these different levels of government. Using Indonesia’s national social health insurance program as the case, this article explains these shifts as part of the national government effort to deal with demographic and labor market challenges, but have a risk of being counterproductive to the policy main goal. This article offers a qualitative analysis of the evolving changes of national social security policies in Indonesia and seeks to contribute to theoretical discussions on social policy layering in emerging economies across different governmental levels i.e. national and sub-national. This article examines key policy changes pertaining to Indonesian social health insurance from 2014 to 2024 using data from official records, previous studies, and media archives. The article concludes that instead of welfare retrenchment which might yield more political cost, the national government took another turn, by incrementally sharing the financial burdens to sub-national governments through policy layering, despite the possible unintended impact to its main goal i.e. the universal coverage.