Health insurance reform to remove free-riders
By Lee Kyung-min
Starting next month, people with high income or high-value assets will no longer be able to “free-ride” on the state-run health insurance program. A revised law set to take effect July 1 will disqualify them as dependents of their sons, daughters or siblings registered as salaried workers under an employer-sponsored program, which accounts for about 80 percent of the state-run National Health Insurance Service (NHIS). The remaining 20 percent non-employer-sponsored program is comprised of the self-employed and the underprivileged. The 350,000 people recognized thus far as dependents are among 840,000 households including the top 1 percent of income earners that will shoulder increased monthly premium. Over 5.89 million low-income households will see their monthly premiums drop by 22,000 won ($19.7). The measure is part of three-year welfare program reform spearheaded by President Moon Jae-in, who pledged to better protect those who have been neglected thus far, increase access to quality welfare services and root out welfare fraud. Salaried workers are automatically subscribed to an employer-sponsored plan, and failure to pay the state-set premium results in a freeze of personal assets, almost always preceded by a reduction of monthly wages in the corresponding amount of unpaid premiums. Foreigners employed with Korean firms subscribe to the same program as salaried Koreans.
Under the measure unveiled by the Ministry of Health and Welfare, households with an income below 1 million won will pay only 13,100 won, the lowest amount in monthly premium. The government will gradually phase out property- or vehicle-based premium charging for subscribers, many of whom own trucks, delivery vans and mid to low-engine capacity vehicles as a means of making a living or transport, not as a financial status statement. About 2.9 million households will see their premiums charged to vehicles drop 55 percent as they are set to be exempt for owners of vehicles below 1,600 cubic-centimeters engine capacity and over nine-years old. Premiums will be reduced 30 percent for owners of vehicles below 3,000 cubic-centimeters engine capacity.
Premiums, however, will increase 12 percent for those whose annual income surpasses 386 million won and owners of property valued at over 1.2 billion won. About 140,000 salaried workers who earn over 34 million won in non-salary income including interest, dividends, rent or other business yields will see their monthly premium increase by 126,000 won. The premium ceiling for salaried workers will be increased to 3.1 million won from the current 2.4 million won. About 2,000 households pay the highest amount, accounting for 0.02 percent of the total salaried workers. About 4,000 households earning over 940 million won in annual income will pay 21 percent more in premiums, or 504,000 won.
About 70,000 _ mostly old people _ will begin paying 188,000 won in newly charged monthly premiums as they are set to be disqualified as dependents of their adult, salaried children. The premium is set for those who have an annual income over 10 million won among whom own property value over 1.1 billion won. The 188,000 won premium is also charged to people whose annual pension- and labor-based income surpasses 34 million won _ 340 million won in the case of 90 percent deductibles are recognized. Around 230,000 households set to be disqualified as dependents of their salaried siblings will have to pay 29,000 won in monthly premium.
The ministry said it would gradually revise the law that disqualifies people whose immediate family members have a stable income or property from receiving the welfare subsidy. The law has long been criticized for impoverishing people over 65, most of whom must depend heavily on their adult children who are often reluctant to provide support. The ministry also plans to help the vulnerable with daily expenses, housing and medical expenses.
No more poverty-driven suicides
The revision to expand the state welfare subsidy program for people in the lowest income bracket was prompted by poverty-driven suicides over the past few years. The most recent involved a woman and her daughter that were found dead more than two months after the mother's murder-suicide due to financial difficulties following her husband's suicide five months earlier. The woman, 41, first killed her daughter, 4, whose body was close to her own in Jeungpyeong, North Chungcheong Province. Police had received a report from the apartment manager, who noticed the woman had failed to pay her monthly management fees over the past few months and had been out of contact with her neighbors. Police said a note near the bodies read, “I can't go on living all by myself. I will take my daughter with me.” Police believe her financial woes worsened after the husband committed suicide last September amid an ongoing struggle to pay tens of millions of won of debt. The woman, police said, had no way of paying the debt left by her husband who had barely made ends meet from looking for ginseng, a plant used for some herbal remedies. Police said the woman had failed to pay about 60,000 won rent for months as well as other bills for electricity, water and liquefied natural gas.
This incident is similar to the deaths of a mother and her two daughters who all three committed suicide four years ago in Songpa, Seoul. The three were found dead in February 2014, leaving behind an envelope that contained 700,000 won and a suicide note that read, “We are so sorry. The 700,000 won is for the unpaid rent and utility bills.” The mother in her 60s continued to struggle to support her two daughters, who had diabetes and high blood pressure, long after her husband died in 2002 of bladder cancer, the treatment for which nearly bankrupted the family. The household was denied state welfare support because the two adult daughters were deemed “able to work.”