National Health Insurance Faces Funding Debate as Coverage Lags OECD Standards
seoul, South Korea – South Korea’s national health insurance system is facing renewed scrutiny over its funding model and coverage levels, as concerns mount over the financial sustainability of the system amidst a rapidly aging population and low birth rate. A recent review highlights a long-standing debate over the source of national treasury support,with calls to shift from a percentage of import value to a fixed rate.For years, critics have argued the current system, which ties national treasury support to import values, is inadequate and should be replaced with a more stable funding mechanism based on insurance premiums. The National assembly Legislative Inquiry Division recently recommended increasing the support criteria from ”20% of annual premium imports” to a flat “20%.”
The National Planning Commission has yet to announce any changes to the existing provisions,despite numerous legislative proposals aimed at securing permanent funding for the health insurance system. Last August, lawmakers from the Democratic Party proposed amendments to the National Health Insurance Law that would eliminate sunset clauses on national treasury support and remove the 65% cap on contributions from cigarette taxes.
“the government’s operational plan mentioned the expansion of national treasury support, but did not reveal the goal of support,” stated Kim Jae-heon, secretary general of the Korea Free Medical Movement Headquarters. “keeping the 20% legal support rate is not enough in an ultra-aging society.” He further criticized the lack of a clear target for expanding universal health security.
Currently, South Korea’s health insurance coverage rate stands at 60%, significantly lower than the OECD average of 80%. This gap is fueling calls for increased government investment and a more extensive approach to healthcare funding.
While the National Planning Committee intends to alleviate financial burdens by covering 70% of long-term care expenses – prioritizing facilities with higher medical capabilities – and expanding coverage for rare diseases, implants, and seasonal flu vaccinations, experts warn that a fragmented approach is insufficient.
Chung Hyung-jun, chairman of the Policy Committee at Wonjin green Hospital, cautioned, “In the past, governments have proposed a goal of health insurance coverage, but the government has not revealed the goal of coverage.” He emphasized the need for an overarching strategy to address the broader issue of health insurance coverage, rather than focusing solely on isolated areas.
The debate underscores the growing pressure on South Korea’s healthcare system to adapt to demographic shifts and ensure equitable access to quality care for all citizens. The future of national health insurance funding will likely be a key policy issue in the coming months.
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Key Facts & Context:
Aging Population: South Korea has one of the fastest-aging populations in the world, increasing demand for healthcare services.
Low Birth Rate: A declining birth rate further exacerbates the demographic challenge, reducing the number of contributors to the health insurance system.
OECD comparison: South Korea’s 60% health insurance coverage rate is significantly below the OECD average of 80%, indicating potential gaps in access to care.
Funding Model Debate: The current funding model, tied to import values, is considered unstable and inadequate by many experts. Legislative Efforts: Multiple legislative proposals have been introduced to address the funding issues and ensure the long-term sustainability of the national health insurance system.
