Health Insurance Premiums Rise as You Age and With Medical Inflation. Here's What That Does to a 20-Year Policy
6 min read
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6 min read
You buy a health policy at 35. The premium is Rp5,000,000 a year. It feels fair. Then the renewal letter comes, and the number is higher. Next year it is higher again.
This health insurance premium increase is not a mistake. It comes from two forces that push the price up together: you get older, and medical costs rise faster than normal prices. This post shows how each one works, then projects one premium over 20 years so you can see the size of it.
Most individual health policies in Indonesia renew every year. The insurer can reprice the policy at each renewal. Two things drive the new price.
1. Your age. Older people claim more, on average. So insurers sort customers into age bands, for example 31 to 35, 36 to 40, and so on. When you move into the next band, your premium steps up. The exact steps differ by insurer and product. Ask for the full age-band table before you buy.
2. Medical inflation. Medical inflation means the yearly rise in the cost of hospital care, drugs and treatment. If a hospital stay costs more each year, the insurer pays more in claims, and later charges more in premiums.
These two stack. You can face a higher price from medical inflation even in a year when your age band does not change.
It is high, and sources give a range. Figures here were retrieved on 9 October 2026 from news reports.
Different firms measure it differently, so read it as a range of roughly 14% to 18%. Compare that with the general inflation and BI rate on the NetWort macro page.
OJK also reported that insurers are responding in several ways: raising premiums, changing benefits, tightening underwriting, and in some cases stopping sales of certain products (InfoBank News).
Here is a worked example. It is our own arithmetic, not a quote from any insurer.
| Policy year | Premium at 8% a year | Premium at 14.4% a year |
|---|---|---|
| 1 | Rp5,000,000 | Rp5,000,000 |
| 6 | Rp7,346,640 | Rp9,797,158 |
| 11 | Rp10,794,625 | Rp19,196,862 |
| 16 | Rp15,860,846 | Rp37,614,940 |
| 20 | Rp21,578,505 | Rp64,426,490 |
Add up all 20 years of premiums:
Be honest about the limits. Holding 14.4% for 20 years is a stress test, not a forecast. Medical inflation can slow down. But the lesson holds: a small yearly rise grows into a big number.
Age steps come on top. As a pure illustration, suppose your premium also steps up by 25% each time you move into a new five-year age band (this 25% is invented for the example, not an insurer's rate).
At 8% medical inflation plus those steps, the 20-year total grows from Rp228.8 million to about Rp363.9 million. At 14.4%, it grows far more.
Real age-band steps vary by insurer and product. That is why the table in your own policy matters more than any average.
This is the question that matters. The premium is cheapest when you are young and healthy, which is also when you feel least need for cover. It is most expensive when you are older, which is exactly when dropping the policy hurts most.
Insurers can also decline to renew or stop selling a product. Around five to six non-life insurers had stopped selling health products by early 2026, reported by Asia Insurance Review. Claims ratios above 90% were described by OJK as unsustainable. So pricing pressure is real in the market today.
You do not need to be an expert. Ask the insurer or agent these questions, and get the answers in writing:
Also remember what you already have. BPJS Kesehatan is the public base layer, and private cover fills its gaps. Life insurance is a separate question, covered in our term life coverage guide.
Open your NetWort Dashboard and look at your portfolio's annual return. Then compare it with the rates in the table above. If your premium could rise faster than your savings grow, plan a bigger buffer for it now, and revisit the plan each year.