NHIS lifts burden of medical costs across generations

Elderly women set flowers at the Seoul geriatric care facility run by the National Health Insurance Service in Gangnam, Seoul. Korea Times file

By Bahk Eun-ji

Korea's public health system has certainly played a critical role in helping people nationwide weather the storm during the ongoing coronavirus pandemic but the National Health Insurance Service (NHIS) has been at the forefront of social welfare here for more than 40 years now.

By providing full coverage for medical treatment costs of those who have contracted COVID-19, the NHIS has become a robust social safety net for all those living here and eligible for the paln.

Kim Yong-ik, president of the National Health Insurance Service (NHIS), speaks during an interview with The Korea Times at the NHIS office on Yeouido, Seoul. Korea Times photo by Choi Won-suk

"Under the slogan 'to make a better country without burdening the public with medical bills,' the NHIS has been administering a sustainable health insurance system through coverage expansion to relieve the financial burden on households, and reduce the inequality between the "haves" and the "have-nots" for the last 43 years since it began operation in 1977," said the NHIS President Kim Yong-ik.

Under the Moon Jae-in administration the goal has been to expand the coverage ratio of the national health plan to 70 percent of all medical expenses and to increase the range of covered services. To this end the NHIS has been making moves to expand the benefit coverage for MRI, ultrasound and other high-demand essential services, Kim said.

History of NHIS

The current form of the national health insurance program was implemented in 1977, although the program was first introduced in 1963, but on a limited scale, with the introduction of workers' compensation insurance. The insurance payment was split between employers and employees in 1977, and the system has been running up until today. The program was mandatory in workplaces with more than 500 employees but it gradually expanded and by 1979 it included public servants, military and teachers.

By 1989, the program was expanded to cover all members of the public, achieving universal health coverage, according to the World Health Organization criteria. Then in 2000 during the Kim Dae-jung administration, it eventually unified into the current form ― a single-payer healthcare system ― from having previously been run through 367 separate unions.

Likewise, the national insurance system has been continuously developing, and it has faced another major change under the Moon Jae-in administration with its basic concept of expanding the coverage of the state-run insurance.

Role of health insurance in aging society

As the aged population grows larger, more conversations about the fate of the elderly needs to be had. The United Nations classifies a society as an "aging society" if the number of people aged 65 years and older accounts for more than 7 percent of the population. If the number of people aged 65 years and older accounts for more than 20 percent of the population, it is classified as a "super-aged society." Korea became an aged society in 2018 based on this standard, and the country is predicted to become a super-aged society by 2026.

Population aging is a natural phenomenon, but rapidly moving into the aging category brings with it many problems, not least of all the heavy financial burden on the nation as the pool of young workers participating in productive activities falls, thereby decreasing the nation's industrial output while reducing consumption.

Poverty and illness among the elderly have also emerged as major social issues, and the costs of resolving them have become enormous. According to data from the Health Insurance Review and Assessment Service (HIRA), 551,845 patients were treated for dementia in 2019, up 42.7 percent from 386,607 in 2015.

The NHIS predicted that with this increased rate, the number of patients suffering from dementia is expected to increase to around 1.27 million in 2020 and to 2.71 million 2050.

"Therefore, as Korea is a country with a rapidly aging population, building a social safety net to prepare for an aged population must be placed high on the national policy agenda," Kim said.

In 2008, Korea introduced a long-term care insurance for the elderly who are unable to perform daily activities without assistance. It is a social insurance program for the elderly and is designed to provide assistance to those suffering geriatric diseases including dementia, Parkinson's disease and those who have experienced strokes.

The program provides long-term care benefits such as support for household chores and physical assistance in order to give relief to the families supporting them and to help them maintain a comfortable existence and dignity in their golden years.

"The ultimate goal of welfare policy for the elderly is to improve the quality of life for them and their families," Kim said.

In accordance with the policy, the agency also expanded the number of public dementia hospitals and facilities caring for the elderly, and started projects such as an early dementia diagnosis program, elderly care assistance program including vouchers for assistive services.

In order to receive benefits from long-term care insurance, a senior aged 65 or older or under 65 but with geriatric illness such as dementia needs to apply for the program.

"The long-term care insurance program started to play a central role in the country's social safety net, easing public worries about old age and lowering the burden on families," Kim said.

He said it is a historic achievement that the country that has experienced colonial rule and war but has secured a commendable national health insurance system, and many countries that want to introduce such systems look to Korea as an essential role model.

"We will develop the system into a better one by solving the remaining challenges such as securing sustainable finance and manageable insurance premiums," he said.

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