Two pillars should be high coverage and stable finance
One of the things Korea can boast about to the world is its healthcare system, which is relatively cheap and easily accessible. And the state-run, nearly universal medical insurance system constitutes its backbone.
One problem is its low coverage.
So, the former Moon Jae-in administration in 2017 launched a five-year program, nicknamed "Mooncare," to raise the coverage ratio.
The plan was aimed at expanding the health insurance coverage rate to 70 percent and subsidize at least part of the 3,800 medical services paid 100 percent by patients. It attained only partial success, lifting the coverage rate from 62.7 percent in 2017 to 65.3 percent in 2021, way below the average of 80 percent among OECD member nations.
However, at a cabinet meeting two weeks ago, President Yoon Suk-yeol called for a quick "normalization" of the national health insurance system. "The previous government's expanded coverage has led to a waste of financial resources," Yoon said.
The president criticized his predecessor for failing to lift the coverage rate sharply despite pouring in over 20 trillion won ($15.6 billion). He then pointed to the insurance system's financial collapse due to moral hazards by some patients at the expense of many bona fide subscribers, citing rampant "medical shopping" and foreigners' "free-riding." Yoon said, "Health insurance reform is not an option but a necessity."
The criticism was proper, but the reasons were as wrong as the conclusion.
According to the National Health Insurance Service, its current account balance was a surplus of 700 billion won in 2017. It recorded a deficit in the following three years but turned around to a 2.8 trillion won surplus in 2021. The accumulated reserves also fell from 20.7 trillion won in 2017 to 17.4 trillion won in 2020 but rebounded to 20.2 trillion won in 2021. The main reason for the improved figures was the drop in hospital use amid COVID-19. Still, the insurance service did not collapse financially.
According to the Board of Audit and Inspection, 200 billion won of insurance money was wasted due to Mooncare. But that accounted for a mere 0.2 percent of the annual legal fees of 100 trillion won. Foreign subscribers contributed to the surplus by paying more and using services less than Koreans on average. Of course, some Koreans visit hospitals hundreds of times a year. A foreign resident's dependent received an operation worth several billion won and left the country. However, there can be loopholes in every system.
Why should one throw away the whole basket instead of picking a few bad apples?
Yoon says little about increasing coverage, stressing only financial health and vowing to help people with diseases requiring prohibitive costs for treatment. His health officials say they will continue to provide essential care.
In a worst-case scenario, Koreans will likely get insurance benefits only for primary care or severe chronic or terminal diseases. They will have to pay from their pockets for most other services. "Only people with money will be able to use medical services," an opposition lawmaker said. "In the longer run, the government will encourage for-profit hospitals and private medical insurance, like in America."
The critic might be exaggerating but not entirely wrong.
Recently, the government reluctantly agreed to keep subsidizing 20 percent of insurance funds from the state coffer for another five years. The opposition party had called for making the "sunset law" permanent, but the government wanted to prolong it only one year.
The conservative government seems set to erase all traces of its liberal predecessor. That may be what elections are for. However, it must not make a good thing terrible ― especially health insurance.
Instead, the government should rectify the current insurance fee system based on the number of services to a comprehensive payment system, curb overtreatment, reduce excessive beds and increase doctors.
Or Yoon can inherit his predecessor's policy to raise the coverage ratio ― and rename it "Yooncare." Most people wouldn't care less.
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