Health Insurance

Reform Required to Ensure Financial Stability

The National Health Insurance Corp. (NHIC) plans to raise insurance premiums by 7-7.5 percent next year to meet its growing coverage for medical treatments and ensure its financial soundness. This plan has sparked a public backlash. Subscribers complain that the insurance corporation has continued to hike premiums over the past several years without making any efforts to reduce its operational costs.

Health insurance premiums increased by 2.2 percent in 2005, 3.9 percent in 2006 and 6.5 percent this year. It goes without saying that people have already been under the weight of the growing financial burden for health insurance. They now criticize the authorities for coming up with a much higher rate for next year than previous years.

It is quite regrettable that the NHIC is trying to force subscribers to shoulder such an increasing burden, especially when many of them are suffering from financial hardship amid an economic slowdown and surging costs for housing and education. Policymakers claim that the planned hike is necessary to make up for an estimated deficit of 300 billion won this year.

In addition to the premium increases, the corporation has kept raising patient's payments for medical services that are not covered by insurance. Insurance administrators have to keep in mind that the soaring burdens on the part of subscribers cannot constitute a long-term solution to the financially unstable insurance system.

The public complains that only ratcheting up insurance premiums and patients' doctor fees is only a stopgap measure. Thus, it is imperative for the government and the NHIC to work out fundamental measures to stabilize the financial structure of health insurance. First of all, we call for the restructuring of the bloated corporation. It has 230 branch offices around the country, compared with 90 branches of the National Pension Service. In addition, the authorities will have to crack down on many hospitals and clinics that manipulate medical records of patients to illegally get insurance payments. The corporation should also make efforts to detect free riders who illegally enjoy insurance coverage without paying any premiums.

Especially, healthcare spending is expected to surge in the near future since the country's elderly population will rise significantly. But, the authorities have yet to hammer out any reform package to cope with this. Policymakers ought to present health insurance reform before it's too late, or the country will have a long way to go before it realizes a true welfare state.