ed Health insurance reform

Reduce burden on low-income families, underprivileged

There are mounting calls to overhaul the outdated National Health Insurance (NHI) system that was first conceived in 1977. It does not reflect the changes in Korean society and unfairly places additional burdens on those who have low or no income.

The NHI program was expanded to the entire country in 1989. Currently, it is mandatory for all citizens to subscribe to the unified health insurance plan run by the NHI service, which is financed by monthly insurance premiums from individual subscribers and government subsidies. Under the current system, half of the premiums are deducted from monthly paychecks of salaried workers, while the other half is paid by the employer. The self-employed belong to a different category called “local insurance” and are required to pay a monthly premium calculated based on their income, property value, vehicles owned and other factors such as age and gender.

It is not just the underprivileged but also many salaried workers who are becoming more upset with the universal health insurance plan. While the wage level for many salaried workers has remained stagnant, the premium has continued to increase. This has been a source of huge complaints from salaried workers. A 2015 report shows that incomes have risen by only 7 percent since 2012, but the average worker is paying 57 percent more in premiums than they did in 2012. The average worker was paying 102,000 won in 2012, but they were paying 158,890 won in 2015. It is high time policymakers properly addressed the growing public dissatisfaction over the flawed system.

People who belong to the “local insurance” category are particularly disadvantaged, as they are required to pay premiums based on property and vehicles owned and other factors that have little to do with showing that they have the means to pay the premiums. A retired couple with an apartment and a car, for example, are still paying a high premium although they do not have a source of monthly income.

It is particularly important for lawmakers to come up with measures to ensure that the elderly who do not have a regular source of income shoulder fewer burdens. The poverty rate among Korea’s elderly is already the highest among OECD countries. It would not be fair for them to have to pay more on health insurance after they are retired compared to the amount they were paying while they were working. But this and other unfair practices are rampant under the current strange payment system. The NHI service received more than 67 million complaints about insurance payments last year alone.

Although belated, it is a positive sign that the new National Assembly has begun discussions on revamping the NHI. The main opposition Minjoo Party of Korea unveiled a proposal for an amendment to the National Health Insurance Law last week, while the ruling Saenuri Party and the minor opposition People’s Party are also preparing measures to advance the public health insurance program.

Parties should work toward the common aim of primarily reducing burdens on low-income families and those who are retired, while obliging big earners to pay more in premiums. This is the first step to convincing the public that the system is run fairly. They should also come up with measures to weed out undeserving beneficiaries and keep free riders to a minimum.