South Korea to reform health insurance premiums, targeting high earners and minimum rates

South Korea is embarking on a significant overhaul of its national health insurance premium system, aiming to rectify long-standing inequities. The core of the proposed reform centers on increasing the burden on the highest earners while also addressing the minimum premium, which has remained virtually unchanged for 26 years. This initiative seeks to create a more balanced and sustainable funding model for the nation's healthcare.

A key aspect of the plan involves raising the premium cap for high-income individuals. Currently, the maximum monthly health insurance premium is capped at 4.59 million won, regardless of how high one's income climbs. This has led to criticism, as individuals earning 100 million won and those earning 1 billion won per month pay the same premium. The government proposes to increase this cap to 6.12 million won per month for both corporate employees and regional subscribers. This adjustment is expected to impact the top 0.04% of corporate subscribers and the top 0.02% of regional subscriber households.

Simultaneously, the government plans to adjust the minimum premium. Since the National Health Insurance Act took effect in 2000, the minimum monthly premium has been fixed at a level equivalent to a monthly wage of 280,000 won. The reform aims to link this minimum premium to the annually announced minimum wage, ensuring it adjusts dynamically. This would lead to an increase in the minimum monthly premium to approximately 22,260 won for both corporate and regional subscribers. To mitigate the impact on lower-income households, a phased implementation is being considered, applying only 50% of the increase from January 2027 to December 2028, and the full amount from January 2029.

Furthermore, the reforms target the way premiums are calculated for daily workers earning over 20 million won annually, acknowledging the rise in high-earning temporary contracts. These changes are projected to boost annual health insurance revenue by approximately 580 billion won. However, concerns remain about the potential impact on low-income individuals, particularly in the face of economic downturns leading to premium non-payments. Experts emphasize the need for complementary support measures to cushion the blow for these vulnerable groups, ensuring that the pursuit of fairness does not inadvertently increase hardship for those least able to bear it.

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Support measures must be prepared for low-income regional subscribers whose burden will increase due to the increase in the minimum premium.