By Kim Hyo-jin
Concerns are growing over how to fund President Moon Jae-in's new health care scheme which is estimated to cost up to 30.6 trillion won ($26.9 billion) over the next five years.
Moon announced the plan Wednesday to expand the coverage of state health insurance to almost all diseases excluding cosmetic surgery by 2022.
The so-called "Mooncare" will cover 3,800 medical procedures, materials for treatments, and medicines in the state-run health care program, reducing the average annual medical spending by a patient from 504,000 won to 416,000 won by 2022.
To finance this, the government said it would use about 10 trillion won from the accumulated profits made by operating the health care fund and raise the national health insurance rate by up to 3.2 percent every year.
Many, including opposition parties, questioned the viability of the plan, saying there was no accompanying stable plan for financial resources.
"The government pushes for a 30.6 trillion-won health care program, targeting the next five years. But what about after then?" said Rep. Kim Gwang-lim, chief policymaker of the main opposition Liberty Korea Party (LKP). "The plan to secure financial resources is just too vague."
Rep. Lee Yong-ho, chief policymaker of the minor opposition People's Party agreed, saying, "We evaluate Moon's policy direction positively, but still we are worried it may cause a huge financial burden five years from now."
Minor opposition Bareun Party spokesman Jeon Ji-myeong criticized the funding plan, saying it was not feasible due to a shrinking and aging population and low growth expected in the future.
"It will be difficult to put a cap on increases in the national health insurance rate at 3.2 percent, not to mention it will be unlikely to maintain the surplus of the health care fund," he said.
The annual increase in health insurance fees has hovered around 1 percent since 2013. The rate was frozen this year. But for the envisioned "Mooncare," unless it is raised by 5 to 6 percent it will be hard to avoid a deficit, according to pundits.
"If citizens are given various benefits in medical spending, their demand will soar, costing the government more money than calculated. It is doubtful a 2 percent to 3 percent increase in the insurance fee could prop up the plan," said Lee Kyu-sik, a health economics professor at Yonsei University.
It is also speculated the government would shoulder more financial burden by 2020 when baby boomers who are financially unstable in retirement start turning 65.
The finance ministry projected in March that the national health insurance fund will record a deficit in 2018, the accumulated fund will run out by 2023, and the deficit is estimated to reach 20 trillion won by 2025.
On Thursday, Moon reaffirmed his health care program and dismissed rising financial concerns during a weekly meeting with top aides at Cheong Wa Dae.
"I know many people are questioning if the expanded welfare plan will be possible without a tax bomb or financial deficit. But also, some criticize that the government is slow in expanding welfare," he said.
"I hope you let the people know we thoroughly looked into the funding plan in consultation with the finance ministry and made it possible to keep financial stability by planning to gradually implement changes from the second half of the year to 2022."
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