By Kim Tae-jong
Whether National Health Insurance should be split in two to employ separate funds for salaried workers and the self-employed is once again emerging as a hot button issue.
This has arisen as the Constitutional Court is expected to rule on a petition filed in 2009 by Kyung Man-ho, head of the Korea Medical Association (KMA), by the end of the year. Kyung argued that the current integrated medical insurance violates individuals’ rights to property and equality.
The country has unified medical insurance, and the National Health Insurance Corporation (NHIC) currently runs a compulsory, universal health insurance, which covers almost the whole population.
Major sources of financing are monthly insurance premiums from the insured and government subsidies. Salaried workers have premiums deducted from their pay based on their monthly average wage, while the self-employed pay monthly premiums based on their income and property value.
But those opposing the current health insurance system argue that salary workers are required to pay more premium than they should while the self-employed pay much less because their earnings are usually reported relatively lower than their actual income.
Consequently, premiums paid by salary workers have been used to cover the deficit in the fund for the self-employed, they argue.
“Salaried workers unfairly have a heavier financial burden to offset the loss of the insurance fund for the self-employed, which is unconstitutional,” Kyung said. “So we now demand the government to come up with a new paradigm for medical insurance.”
The operation of separated insurance funds is the best way to save the deficit-ridden health insurance fund and to develop the insurance system in a more sustainable way, he said.
Previously, a similar petition was made in 1999 when the government first introduced the plan to unify medical insurance under the NHIC, and the court ruled it constitutional in 2000.
In the ruling, the court said national health insurance does not infringe upon individuals’ property rights as the collected funds were used for the sake of all the insured. But it demanded the government to come up with a fairer premium collection system to reduce the financial burden on salaried workers.
But Kyung petitioned the Constitutional Court again in 2008 and 2009, arguing that salaried workers still had to pay more premium than the self-employed.
At a public hearing on the issue last Thursday, Lee Gyu-sik, head of Korea Institute for Healthcare Accreditation and welfare administration professor at Yonsei University, echoed Kyung’s views.
“It is necessary to run two separate insurance funds because the insurance has different premium charging formats for salaried workers and the self-employed,” Lee said.
In response, Lee Sang-ee, professor at Jeju National University School of Medicine, argued that the integration helped the health authorities expand benefits to all the insured.
“All the insured can enjoy the same benefits regardless of their income and region,” he said. “It is also impossible and meaningless to run separate funds because the insured often change their employment status.”
Many civic groups claim that the demand for separate funds is a first step toward the privatization of medical services and consequently will lead people to pay more and receive less.
“It is their attempt to privatize the medical industry, based on fee-for-service basis,” the union of about 50 civic groups including the People’s Solidarity for Participatory Democracy said in a statement. “Therefore, we should protect our rights by calling for the court to rule the current system is constitutional.”
But the KMA refuted the claim.
“It has nothing to do with the privatization of the medical industry,” an official from the KMA said. “But by having separated insurance funds, we can expect to provide more medical services to patients who deserve better medical treatment with reasonable payments.”