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Health Insurance Deficit Cannot Be Covered by Workers' Wallets Alone Without Expenditure Adjustment
🇰🇷 South Korea /Health & Science

Health Insurance Deficit Cannot Be Covered by Workers' Wallets Alone Without Expenditure Adjustment

From Dong-A Ilbo · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Sources not specified Context piece
  • South Korea's government is pushing to reform its national health insurance premium system to address a rapidly worsening financial deficit.
  • The proposed changes include increasing premiums for high earners and linking minimum premiums to the minimum wage, aiming to raise annual revenue by approximately 1.3 trillion won.
  • Critics argue that the revenue increase is insufficient to cover soaring expenditures and that the system needs to address excessive medical use and financial leakage, alongside government funding shortfalls.

South Korea's government is pursuing a reform of the national health insurance premium system, driven by a rapidly deteriorating financial situation. The plan aims to increase premiums for the top 0.04% of earners, with monthly payments potentially rising from 4.59 million won to 6.12 million won for those earning over 120 million won per month. Simultaneously, the minimum premium for the bottom 1% of earners, those making around 280,000 won monthly, will be linked to the minimum wage, increasing from 10,800 won to 22,000 won.

The government is pushing to reform the health insurance premium system because the financial situation is rapidly worsening.

— Newsis (Source)Context for the proposed reform.

The financial deficit is attributed to a shrinking working population due to low birth rates and an aging society, which increases demand for medical services. Projected expenditures are expected to surge, further strained by planned increases in fees for essential and regional medical services, as well as government support for nursing care costs.

Despite the proposed premium hikes, the projected additional annual revenue of 1.3 trillion won is seen as insufficient to manage the escalating costs, which exceed 100 trillion won. The article suggests that the current system fosters moral hazard, where individuals may overuse medical services. It calls for measures to limit excessive medical use, exclude coverage for low-efficacy drugs, and address financial leaks from sources like "office-based hospitals" (samujang byeongwon).

The additional revenue from this reform will only be 1.3 trillion won annually, which is insufficient to cover the exploding expenditures exceeding 100 trillion won.

— Editorial (implied)Critique of the proposed reform's financial impact.

Recent discussions highlighted that the government's actual contribution to health insurance funds falls short of the legally mandated 20% of expected revenue, averaging only around 14%. While the president acknowledged the validity of these concerns and stated it is under consideration, critics argue that without expenditure restructuring and fulfillment of legal funding obligations, public resistance to premium increases will persist.

The government must restructure expenditures and fulfill its legal funding obligations to reduce public resistance to premium increases.

— Editorial (implied)Call to action for the government.
DistantNews Editorial

Originally published by Dong-A Ilbo in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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