The policy on the use of National Health Insurance (JKN) capitation funds is a crucial instrument in supporting the provision of health services at primary health care facilities, particularly community health centers (Puskesmas). Although the program has been implemented, it still faces several obstacles that affect budget optimization. This study aims to examine the implementation of regulations on the use of JKN capitation funds at the Karangan Community Health Center in East Kutai, in accordance with the provisions of Minister of Health Regulation Number 21 of 2016, and to explore the factors that strengthen and hinder its implementation. This study adopted a qualitative design based on analytical exposition. Information was obtained through intensive dialogue, direct observation, and searches of archives and official records. The research informants included the Head of the Karangan Community Health Center, the treasurer responsible for managing the JKN capitation funds, and health workers. Data analysis was conducted through the stages of data reduction, data presentation, and conclusion drawing. The analytical framework used is the Marilee S. Grindle Policy Implementation Model, which emphasizes the content of policy and the context of implementation. The results of the study indicate that, from a content-of-policy perspective, the utilization of JKN capitation funds at the Karangan Community Health Center has provided benefits in supporting the operation of health services, improving service quality, and providing services to health workers. However, the degree of expected change has not been fully optimized due to limited resources, especially human resources, and limited budget flexibility. From an implementation perspective, compliance with regulations is relatively reasonable and supported by monitoring and audit mechanisms. However, bureaucratic processes and rigid administrative procedures still affect the community health center's responsiveness in me